In East Kalimantan, the price of fresh fruit bunches (FFB), which had previously reached Rp3,400 to Rp3,500 per kilogram before the announcement of the formation of the DSI, suddenly dropped after the announcement. On Thursday, May 21, 2026, a downward trend began, with prices dropping to Rp2,800 to Rp3,490 per kilogram. Then, on Friday, May 22, 2026, palm oil prices experienced their deepest crash, reaching Rp1,740 to Rp2,500 per kilogram.
Daru Widiyatmoko, Secretary of the East Kalimantan Regional Leadership Council (DPW) of the Indonesian Palm Oil Farmers Association (APKASINDO), stated that the main factor in the collapse of FFB prices in East Kalimantan was market panic in response to President Prabowo's speech regarding the centralization of CPO exports through state-owned enterprises.
"The main cause is clearly the news and President Prabowo's speech that, starting June 1, 2026, CPO exports must go through a single gateway, namely state-owned enterprises. This immediately triggered a chain reaction that harmed farmers," Daru said on Saturday (May 23, 2026).
The impact on the ground goes beyond price declines. Palm oil mills (PKS) in East Kalimantan have reportedly begun implementing massive restrictions to secure their positions. Based on monitoring by APKASINDO East Kalimantan, the dynamics occurring at the mills include three crucial factors: first, a unilateral and drastic reduction in the purchase price of fresh fruit bunches (FFB).
Second, the implementation of quota restrictions on incoming fresh fruit bunches (FFB). Third, a complete cessation of external supplies (stopping external FFB), so that independent smallholders are no longer allowed to send their fruit to the mills.
Given the increasingly critical situation leading up to the policy's implementation on June 1, Daru urged President Prabowo Subianto to directly intervene in the market and issue firm instructions to business actors and regional bureaucrats.
"We hope President Prabowo will immediately order all palm oil company leaders and regional heads to maintain stability. No one should unilaterally lower prices or buy smallholders' fresh fruit bunches (FFB) at low prices," Daru concluded, concluding his statement.
A similar situation is also occurring in Bengkulu Province. In addition to plummeting FFB prices, farmers are also facing high prices for fertilizers and agrochemicals such as pesticides and herbicides. The announcement of the strategic commodity export policy is also considered a trigger for the plummeting FFB prices in Bengkulu.
The downward price trend began on the first day after the announcement, with FFB prices immediately dropping by an average of IDR 300 per kilogram. This decline did not stop there; entering the second and third days (Thursday and Friday), palm oil prices plummeted even further, reaching IDR 900 per kilogram.
According to monitoring by the Indonesian Palm Oil Farmers Association (Apkasindo), as of Sunday (May 24, 2026), the average price of palm oil FFB at various palm oil mills in Bengkulu had dropped. Palm oil fertilizer prices have risen sharply to around IDR 2,100 per kilogram. Prior to the central government's policy announcement, palm oil prices had remained at a relatively ideal level, averaging IDR 3,200 per kilogram.
"Farmers in Bengkulu Province are now facing additional burdens due to soaring fertilizer prices. "This situation is forcing farmers to think creatively and change their plantation maintenance practices," said Jakfar, Chairman of the Bengkulu Regional Executive Board of Apkasindo.
The decline in FFB prices amidst rising fertilizer and agricultural input prices is placing further pressure on oil palm farmers. M. Syarif Rafinda, Chairman of the Indonesian Palm Oil Professionals Association (HIPKASI), stated that the establishment of the Indonesian Resources Agency (Danantara Sumber Daya Indonesia) could impact CPO and FFB prices in the short term amid rising industry operational costs, such as fertilizer, fuel, transportation, and the regional minimum wage (UMR).
"Therefore, a truly well-thought-out policy is needed to ensure the national palm oil industry remains healthy, productive, and able to maintain the sustainability of the workforce and the welfare of farmers," he said.
Syarif stated that HIPKASI views the government's steps to strengthen trade governance for national strategic commodities as a positive effort. However, he noted that large-scale changes in export governance will naturally elicit a fairly sensitive market response, especially in the initial stages of policy implementation.
HIPKASI believes that if market conditions are not managed properly, pressure on CPO and FFB prices could have a domino effect on the industry. The national palm oil industry. The impact could include extreme operational efficiency, reduced plantation maintenance activities, and potential workforce reductions or layoffs in the plantation sector and other supporting industries.
The Indonesian Palm Oil Producers Association (GAPKI) also expressed concern. GAPKI Chairman Eddy Martono stated that his organization is concerned that the establishment of the DSI will result in business owners losing market share if the DSI is not managed properly.
"We will lose our market share if management is not good. Mining is different from palm oil; palm oil has numerous derivatives, and this is what must be done."
