08.02.2022 (en.antaranews.com) - Jakarta (ANTARA) - Trade Ministry's Director-General of Domestic Trade, Oke Nurwan, confirmed that the government was in the process of stabilizing cooking oil prices by implementing policies, including Domestic Mandatory Obligation (DMO) and Domestic Price Obligation (DPO).

Nurwan stated that the policy will break the price linkage between cooking oil and international Crude Palm Oil (CPO).

"The Indonesian government has decided to cut the link between cooking oil prices and the international CPO prices by implementing DMO and DPO regulations," he stated on Tuesday.

He later noted that domestic cooking oil producers had, so far, purchased CPO as raw material for vegetable oil at global prices.

Nurwan notified that currently, only a few cooking oil producers had their own palm oil plantations.

The increase in the vegetable oil prices worldwide since last year led to a rise in the palm oil price as a raw material for cooking oil.

The government had earlier set the highest retail price (HET) for cooking oil at Rp14,000 per liter. The policy has mandated CPO producers in Indonesia to opt to export their harvest due to the high global CPO price rather than sell it as domestic cooking oil, which has a limited price.

Hence, the government implemented a DMO policy that made it mandatory for CPO producers in Indonesia to allocate 20 percent of their total export volume for meeting domestic needs.

"All CPO exporters must comply with this regulation to facilitate the supply of cooking oil in Indonesia," he noted.