JAKARTA: Some Indonesian oil palm farmers prefer selling their fresh fruit bunches (FFB) across the border in Malaysia due to the better offers they get for the commodity.
Indonesian Oil Palm Farmers Association (Apkasindo) chairman, Gulat Manurung, said farmers do this since the price of palm oil had drastically fallen of late, according to the Tempo.co portal.
The issue had gone viral on social media recently and Gulat affirmed this on Monday.
"It is true that the prices of FFB are still at the bottom, and continue to dwindle every passing day. This has caused panic among farmers from Aceh to Papua," he said.
Gulat said oil palm processing factories in Indonesia value oil palm FFB not more than 1,000 rupiah (30 sen) per kilogramme whereas in Malaysia farmers can sell their produce between 3,500 rupiah (88 sen) to 4,500 rupiah (RM1.33) per kg.
"Farmers who are based along the border with Malaysia can still salvage their produce by selling it [to Malaysia] that values the commodity up to 4,500 rupiah per kg. Meanwhile in Indonesia, selling for 1,000 rupiah is difficult," he added.
Because of the price disparity, many farmers violate the export regulations and submit to economic pressures, Gulat said adding it was better than farmers continuing to lose money.
Minister of Trade Zulkifli Hasan apparently acknowledged this situation and deemed it understandable, Gulat said. "If the trade minister considers this practice acceptable, I would agree with him. This is the farmers' livelihood we are talking about."