Indonesia, the world’s largest exporter of palm oil, halted shipments of crude palm oil and some of its derivatives on April 28 to control the surge in domestic cooking oil prices, which has rocked global vegetable oil markets.
However, government efforts to make cooking oil, a staple of many Indonesian dishes, more affordable have failed, undermining President Joko Widodo’s popularity and causing backlash from farmers.
“Malaysian farmers are smiling, Indonesian farmers are suffering”, reads one of the placards carried by the demonstrators, who marched alongside a truck full of palm fruits.
Malaysia, a rival producer, aims to fill the market gap opened by Indonesia’s export ban.
In a statement, small farmers group APKASINDO said that after the export ban, the price of palm fruits fell 70% below the minimum price set by regional authorities.
Independent farmers are not protected by the minimum price, set by mutual agreement between the mills and the large cooperatives.
APKASINDO estimates that at least 25% of palm mills have stopped buying palm fruits from independent farmers since the ban began, indicating that the oil mills’ storage tanks are filling up.
Similar protests by farmers are also expected in 22 other provinces, APKASINDO said.
Yuslan Thamrin, a farmer who attended the Jakarta demonstration, said celebrations in his area of Aceh Sumatra province for the end of Ramadan this month were more discreet due to the loss of income due to the food export ban. .
“With prices so low, farmers are reluctant to harvest evenly,” he said, adding that factories weren’t harvesting more fruit because port storage was full.
APPROVAL OF JOKOWI FALLS
Another farmer highlighted the dilemma faced by small palm oil producers.
“Harvesting the fruit is unprofitable, but letting it rot will damage the trees,” Bambang Gianto, a farmer in southern Sumatra, told the phone on the phone.
Representatives of the protesters met with the president’s chief of staff, Mr. Moeldoko, who pledged to convey their demands regarding the ban to the president and said the government will improve governance of palm fruit pricing rules to to ensure that farmers get fair prices.
In a statement, he said the export ban was implemented in response to demand for cooking oil “but that doesn’t mean the president isn’t protecting the interests of palm oil growers.”
Jokowi, as the president is popularly known, imposed a ban on exports of palm oil after previous policies failed to control domestic cooking oil prices, saying the need for affordable food exceeded the income concerns and that the ban would only be lifted when internal needs were met.
A poll this week showed that its approval rates plunged to 58.1% in May, the lowest since December 2015, largely linked to the rising cost of cooking oil.
Yose Rizal Damuri, executive director of the Center for Strategic and International Studies, said the kind of price control policies Indonesia is trying to implement are flawed.
“It is a policy adopted only to show that the president is doing something,” he said, urging the authorities to let the price follow the market and compensate consumers in other ways.
Line Minister Airlangga Hartarto said the ban will remain in effect until prices of bulk cooking oil drop to 14,000 rupees ($ 0.9563) per liter across Indonesia.
Data from the Ministry of Commerce shows that as of Friday the average price of bulk cooking oil was 17,300 rupees per liter.