Image: Reuters Berita 24 English - To lessen the possibility of unfair competition in the downstream cooking oil industry, Indonesia's a...
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| Image: Reuters |
Berita 24 English - To lessen the possibility of unfair competition in the downstream cooking oil industry, Indonesia's anti-monopoly agency asked for tighter controls on how much palm oil plantation land a company group can manage on Tuesday.
KPPU has been looking into cartel practices in the cooking oil industry, which uses palm oil as a basic material and has seen retail prices skyrocket in recent months.
In an initial investigation, KPPU discovered that just five business groups control a big portion of Indonesia's palm plantation area, and that the area they control is larger than permitted, director Marcellina Nuring said in an online conference on Tuesday.
She wouldn't name the organizations and wouldn't say how big their operations were. Indonesia has 16 million hectares of palm oil plantations, including those run by local farmers, private companies, and state-owned enterprises.
A palm oil company can only run a plantation with a total area of 100,000 hectares (247,105 acres).
The KPPU is currently conducting an investigation into the matter and will report the findings to the government, though no time frame has been set.
"If a business group is found to have exceeded the permissible limit, their planting licences should be redistributed so that they do not have an excessively dominant position in the upstream sector," stated KPPU Chairman Ukay Karyadi.
He stated that firms can now manage greater plantation areas by acquiring holdings in other enterprises.
He applauded the government's effort to audit palm oil corporations and force them to relocate to Indonesia.
Indonesia has implemented a number of policies to try to rein in rising cooking oil costs, the most recent of which was a three-week ban on the export of crude palm oil and its derivatives, which shook global vegetable oil markets.
Although the export prohibition has been abolished, the government has imposed mandatory domestic sales to maintain adequate palm oil supplies at home.
