22/11/2012 (Jakarta Post) - Oil palm growers in Gunung Megang district, Muara Enim regency, South Sumatra have complained about lower palm oil prices following a glut in the market.

“This time around we’re selling palm oil to companies at around Rp 470 [5 US cents] per kilogram, while we produce around 6 tons from two hectares of oil palm plantations in a month,” said Iskandar, a farmer.

If they sell their crops to middlemen, the price might even drop to between Rp 200 and Rp 400 per kilogram (kg).

Head of production and marketing division at the South Sumatra Agriculture Agency, Benyamin, said the prices fell following the harvest across the province. “Farmers, who collaborate with certain companies, are in a much better situation since the companies have set a price of Rp 1,202 per kg Benyamin said, adding that the low quality of the palm oil also contributed to the drop in prices.

An economic expert at the Sriwijaya University, Didik Susetyo, said the low prices were caused by the decline in demand for palm oil on the international market. Some countries, he said, had shifted to other more environmentally friendly fuel sources