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CPO Export Ban Policy Begins to Show Results

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By: Ismail)*

The government banned the export of CPO (Crude Palm Oil) and this policy is starting to show results. One of these indicators is reflected in the decline in oil prices in several regions in Indonesia.

Rising world oil prices made the government make adjustments to cooking oil prices. But the government is trying hard to stabilize the price again, because oil is a basic material that is needed by the community. One way is to prohibit the export of cooking oil and CPO, and the community clearly supports this policy because domestic needs are increasing.

After the export ban, positive results emerged. The price of premium cooking oil in the market is gradually falling. If in the past the price reached 50,000 per 2 liter package, now it has dropped to 45,000-46,000 per 2 liter package. There are even supermarkets that dare to promote by selling oil at a price of only 41,000 rupiah per 2 liters.

President Jokowi asked the palm oil industry awareness to prioritize and meet domestic needs. He believes that with the existing production capacity, the domestic demand for cooking oil can be easily fulfilled.

In a sense, the strategy taken by President Jokowi is very appropriate. When oil and CPO are prohibited from being sold abroad, distributors distribute them to the domestic market. In accordance with the law of economics, the more inventory of an item, the cheaper the price. Automatically there will be a positive domino effect and eventually the price of cooking oil can go down.

Cooking oil producers and their traders must also understand that the export ban policy is not because the government wants to prohibit them from making a profit. However, this prohibition exists to stabilize domestic cooking oil prices. Moreover, cooking oil stocks can still be sold to the domestic market so that exporters and producers do not lose out.

The decline in the price of cooking oil is certainly welcomed by the public, especially from the lower middle class. They can finally buy premium packaged cooking oil at a more affordable price. When the price of cooking oil goes down, it definitely saves money on shopping. Especially during the pandemic, people’s financial conditions are not too stable.

People who work as food traders are also happy when oil prices fall. They are relieved because they can take profits as usual and do not have to increase the selling price. The reason is because the price of cooking oil has fallen so that it can reduce production costs. They can buy premium packaged oil which is better quality than bulk and produces good food.

When the price of cooking oil falls, this proves that the government is still pro-people. No need to protest until demonstrations and harm others because it causes traffic jams. The government is still working hard and trying to bring down the price of oil, and the way to do that is by banning the export of CPO.

The government actually kept its promise to lower oil prices. It is not impossible that the price will fall again when world oil prices also fall. Even earlier, there had been an increase because the world oil price rose to 130 dollars per barrel. All parties also hope that the situation in Eastern Europe will stabilize so that world oil prices will fall.

The CPO ban policy is believed to be starting to bear fruit in line with the decline in packaged cooking oil prices. The public is also asked to be patient considering that the adjustment of the new equilibrium price requires a long process.

)* The author is a contributor to the Press Circle and Cikini Students

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