In Indonesia, Indonesia Business Post reported that Indonesian Palm Oil Association (GAPKI) has warned that the government’s revised policy on Natural Resource Export Proceeds (DHE SDA) could place significant financial pressure on the palm oil industry.
Under the new regulation, exporters are required to place 100% of their export proceeds in state-owned banks, known collectively as Himbara, with a maximum of 50 percent allowed to be converted into rupiah. The remaining funds must be retained in the system for up to one year.
GAPKI Chairman Eddy Martono said the policy could strain companies’ cash flow, as a substantial portion of export earnings is needed to support daily operational costs.
He cited that companies may be forced to borrow from banks to cover operating shortfalls. While retained export proceeds can be used as collateral, such borrowing would still generate interest expenses, further increasing production costs.
He warned that rising operational costs could eventually affect market prices. “In the end, this could also put downward pressure on crude palm oil prices,” Eddy said, adding that the impact would likely be passed on to farmers through lower prices for fresh fruit bunches (FFB).
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Category: Food & Agriculture
