The Head of the Trade Policy Agency (BKPerdag) of the Ministry of Trade, Kasan, said that policy reform was needed to maintain domestic cooking oil supplies after the momentum of the fasting month and Eid 2023. The policy will be enforced as of May 1, 2023.
"Regarding the large export rights owned by business actors to date and to maintain domestic supply of cooking oil with the DMO scheme so that it remains stable, there needs to be a change in policy regarding control of cooking oil," Kasan said at the Media Briefing on Changes in Post-Cooking Oil Control Policy. Eid 2023, at the Office of the Ministry of Trade, Jakarta, Thursday, 27 April 2023.
Also present at the media briefing were the Director General of Domestic Trade of the Ministry of Trade Isy Karim, Director General of Foreign Trade of the Ministry of Trade Budi Santoso, Plt. Director General of Consumer Protection and Commerce of the Ministry of Trade Moga Simatupang, Deputy I for Food Availability and Stabilization of the National Food Agency I Gusti Ketut Astawa, National Police Food Task Force representative Kombes Eka Mulyana, and Plt. Deputy for Maritime Resources Coordination at the Coordinating Ministry for Maritime Affairs and Investment M. Firman Hidayat who attended online.
There are four policy points that are being re-regulated, namely the amount of the DMO liability which is reduced, the basic multiplier ratio for DMO bulk cooking oil which is also reduced, the multiplier incentive for packaged cooking oil which is increased, and the deposit of cooking oil export rights which will be disbursed in stages.
"First, the DMO obligation amount of 450 thousand tons per month is returned to 300 thousand tons per month based on the installed capacity in accordance with the Decree of the Director General of Domestic Trade Number 82 of 2022, which will take effect in May 2023," said Kasan.
Kasan continued, the second point is to reduce the basic multiplier ratio for export activities from 1:6 to 1:4. The third point is to increase the multiplier incentives for packaged cooking oil so as to increase the proportion of MINYAKITA packaged cooking oil compared to bulk cooking oil.
"The multiplier incentive for packaged cooking oil has been increased to 2 for pillow packages and 2.25 for packages other than pillows, for example standing pouches and bottles," said Kasan.
The Director General of Domestic Trade of the Ministry of Trade, Isy Karim, added that the lowering of the base multiplier ratio and increasing the multiplier incentives for packaged cooking oil are intended to increase the attractiveness of packaged cooking oil as DMO.
“Although the multiplier ratio decreased from 1:6 to 1:4, the incentive multiplier for packaged cooking oil was increased from 1.5 to 2 for pillow packages and from 1.75 to 2.25 for packaging other than pillows. With this, cumulatively it will still be big. We hope that by increasing the packaging multiplier incentives, packaged cooking oil will be more attractive to DMOs," said Isy.
Meanwhile, for the fourth point related to export rights, the government will disburse export rights deposits in stages over nine months. Responding to the disbursement of export rights deposits, the Director General of Foreign Trade of the Ministry of Trade Budi Santoso said, the deposited export rights would begin to be disbursed in May 2023.
"About 3.03 million tons of deposited export rights will be disbursed as of May 1 for the next nine months until January 2024, so the average disbursed is 336 thousand tons per month," said Budi.
Budi added, currently around 6.9 million tonnes of unrealized export rights, excluding deposited export rights. The average export per month is currently 1.86 million tons in the January-March 2023 period. "I don't think this will interfere with our export performance," said Budi.
Kasan continued, the policy update was in accordance with the results of the Evaluation Coordination Meeting on Cooking Oil Policy on April 18, 2023 with the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan. Previous policies have succeeded in maintaining the stability of domestic cooking oil prices amid high demand during the fasting month and Eid 2023. However, policy evaluation and updates are carried out to adjust to conditions after the fasting month and Eid.
"All of these policies take effect from May 1, 2023. We hope that people's cooking oil, both bulk and packaged, will remain stable, affordable, and its supply can continue to be maintained together with all ministries, institutions and business actors which also include distributors and retailers," Kasan said.
Prices are Stable
Kasan said the cooking oil control policy had succeeded in maintaining domestic price stability, especially during the fasting month and Eid 2023. In addition, currently the price of fresh fruit bunches is relatively stable at around IDR 2,000/kg."The policy of controlling cooking oil has succeeded in maintaining the stability of domestic cooking oil prices amid high demand during Ramadan and Idul Fitri 2023. The price for both packaged and premium cooking oil is currently stable, both during Ramadan and after Eid, until today, Kasan said.
Kasan also thanked the business actors which include producers, distributors and retailers who have distributed cooking oil both in packaged and bulk form. "Thank you for your good cooperation during fasting and Eid. Thank you also to the ministries and institutions that became the team for formulating the cooking oil policy," said Kasan. (Kevin Schreiber)
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