The Palm Scribe

Indonesian Palm Oil Fund Gets New Head

Former Custom and Excise Director General and Secretary to the Coordinating Minister for the Economy, Eddy Abdurrahman, has been appointed to head the Palm Oil Plantation Fund Management Agency (BPDPKS) which gathers levies from Crude Palm Oil (CPO) exports to finance activities to develop a sustainable palm oil industry.

Illustration of oil palm plantation to the new head of bpdpks
Oil Palm Plantation. Photo: glennhurowitz from Flickr

Abdurrahman, who was officially appointed by Finance Minister Sri Mulyani on March 2, 2020, replaces Dono Bustami, a press release of the finance ministry uploaded on its official website said.

“I hope that Eddy Abdurrahman, with is previous experience as Director General of Custom and Excise and as Secretary to the Coordinating Minister for the Economy, can make use of the fund managed by the BPDPKS for activities that is in line with the aims of building an sustainable industry,” Sri Mulyani said when appointing the official.

BPDPKS is a public service institution under the finance ministry which is tasked with managing the palm oil plantation funds to safeguard the sustainability of the industry of palm oil which is a national strategic commodity for the country. The fund is built from levies on palm oil exports.

“At present, the price of CPO is above $750 per ton and thus its export incurs an export duty again because the price is now above the lower ceiling,” Sri Mulyani said. The minister also cautioned that “there is a need to keep on guard against a weakening of the global economy as a result of the development for the novel corona virus and its effect on world CPO demand, and in this case China is the second largest importer of our CPO.”

The reference price for CPO used to determine the export duty for the March 2020 period was set at $786.63 per ton, or 6.32 percent down from the February 2020 period. The said reference price has led to the government to set the export duty for CPO at $3 per ton.

Sri Mulyani, in her speech said that one matter that needed to be accorded attention in managing the BPDKS fund, was the crop replanting program.

‘In line with the directive of the President, the replanting program needs to be conducted on 500,000 hectares within three years., I want that this replanting becomes a focus,” Sri Mulyani said, adding that the replanting program could actually be accelerated with the support from various other sides.

“An acceleration of the replanting program would be able to raise the productivity of plantations and increase the welfare of farmers. The success of the replanting program would also assure the availability of raw material for biodiesel (B30) at a cheaper price. Besides that, it could also boost the development of the B30 into energy such as green diesel, green gasoline and green fuel for the national energy self-sufficiency,” she said.

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