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JOURNAL MONITOR VOL.3 NO.8 :  INDONESIAN PALM OIL GOVERNANCE: FINDING THE BALANCE OF DOMESTIC AND EXPORT INTERESTS

PUBLICATION DATE : May 27, 2022
KEYWORDS : export, Palm Oil
AUTHOR : PASPI Monitor

ABSTRACT

Indonesia has been facing a significant increase in palm cooking oil prices for the last five months. The government continues to implement various policies, but these policies have not been effective in overcoming the high price of palm cooking oil. The government is currently re-implementing the DMO-DPO policy for CPO to stabilize domestic palm cooking oil both its availability and prices. This government policy is part of the governance of the palm oil industry, which has been implemented since the 1970s and continues to change according to the developments and challenges of the times. These palm oil policy regimes create pluses and minuses so that can learn the lessons to build the governance of the palm oil industry in the future. Based on the historical analysis of the national palm oil policy regime, which is also supported by data and empirical studies, it shows that to deal with the increasing world price of palm oil and its derivative products (e.g. palm cooking oil), the combination of export levy policies associated with the downstream of domestic palm oil is carried out through three downstream pathways (oleofood complex, oleochemical complex, and biofuel complex) is the best solution. If the government wants the price of palm oil and palm cooking oil to be cheaper, then the policy that can implement is to temporarily increase the export levy tariff.

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