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Indonesia is moving to restructure its export strategy for crude palm oil (CPO), aiming to ship directly to end consumers instead of utilizing neighboring countries as intermediaries. Food Coordinating Minister Zulkifli Hasan emphasized that this shift is essential for maximizing financial returns from the nation's primary commodities, including palm oil, nickel, and tin.
Speaking in Batam, Riau Islands, Hasan expressed frustration that Indonesia, despite being the world's leading producer of these resources, continues to route significant volumes through third-party nations. He highlighted a substantial price disparity, noting that while CPO can fetch Rp27,000 ('$1.49') in end markets, it has been sold to neighboring transit points for as little as Rp15,000 ('83 cents').
The minister stated that the initiative is about more than just trade volume; it is a matter of national sovereignty and controlling the entire distribution chain to capture the full value of natural resources. He referenced Article 33 of the 1945 Constitution, which mandates that natural wealth must be managed for the prosperity of the Indonesian people, reflecting the state philosophy of Pancasila.
Beyond the palm oil sector, Hasan addressed broader economic pressures, including scrutiny from Morgan Stanley Capital International (MSCI) and the need for domestic financial market stability. He also linked commodity management to food security, calling for reduced reliance on imports for staples such as rice, wheat, sugar, soybeans, and salt.
To achieve these goals, the minister urged for a transition toward higher productivity in agriculture and fisheries. He advocated for the adoption of modern technology, mechanization, and improved production management to ensure the population becomes more productive and less dependent on government social aid and cash transfers.
Source: ANTARA