Centralized Management of Domestic Market Obligation Proposed Through the Plantation Fund Management Agency

The President Director of PT Perkebunan Nusantara IV ("PalmCo"), Jatmiko Krisna Santosa, has proposed that the Government re-evaluate the Domestic Market Obligation ("DMO") framework applicable to the palm oil industry. According to him, the current DMO mechanism continues to create administrative challenges due to the lack of certainty regarding the pricing benchmark used to assess compliance with domestic market obligations.

Jatmiko explained that companies have frequently encountered difficulties arising from the use of different price references during the DMO evaluation process. "Why not use the BPN price, the Ministry of Trade's price, or the Indonesia Exchange price? That uncertainty has consistently become a burden for business actors," he said.

According to Jatmiko, the absence of a clear and uniform pricing benchmark creates uncertainty for exporters while increasing the administrative burden associated with fulfilling DMO requirements. He therefore suggested that the Government reassess whether the DMO scheme should continue to be implemented through the physical distribution of goods.

As an alternative, Jatmiko proposed that DMO should be managed centrally through the Plantation Fund Management Agency (Badan Pengelola Dana Perkebunan – "BPDP"), thereby relieving business actors of the obligation to undertake physical distribution. "We may need to reconsider the export levy arrangement under the DMO concept—whether physical DMO is still necessary, or whether it would be sufficient for BPDP to administer it. This is something we should re-evaluate," he stated.