Indonesia: Agrofuel from oil palm –the poor pay with higher edible oil prices

 

Despite announcements from the authorities, the cooking oil price in the Indonesian domestic market has not gone down. On the contrary, the first week in June has passed and the price continued soaring.

 

A year ago, the world's top palm-oil producers, Malaysia and Indonesia, decided to set aside nearly 40 percent --six million tonnes-- of their crude palm oil output for biodiesel production. Industry analysts had warned that the move could further boost edible-oil prices, making it expensive for both food and energy users to buy vegetable oils.

 

Increased demand for fuel use as well as high prices of other vegetable oils like soybean oil in the US has also pulled palm oil prices. This has led poor households in Indonesia to consume waste oil --the oil that has been used for cooking and is later reused. Ironically, “biofuel” will feed cars.

 

The agrofuel boom does not prove to trickle down on local people. The cooking oil price jumped up until it reached the highest rate of Rp9.000/kg. And the most serious condition is the case of an Indonesian village of Tebo district, an oil palm plantation center in Jambi Province, where the cooking oil price reached Rp 10,000 (USD 250)/kg in June.

 

Oil palm companies are bound to send a proportion of crude palm oil for it to be processed as cooking oil. However, in Riau Province, around 18 companies never complied with the rule. In the Sumatra region, the company is more interested in selling crude palm oil to the international market than to sell it at the cheaper domestic price.

 

Cooking oil is one of nine staple foods in Indonesia. The soaring price of edible oil has undermined peoples’ livelihood, impacting on family industries like fried chips, fermented soybean cake, and tofu, which have started to go bankrupt.

 

Edible oil high prices have affected not only peoples’ income but also their health. Poor communities which cannot afford to buy palm cooking oil buy oplosan edible oil -- cooking oil already used. In other cases, cooking oil sellers aiming at keeping their income levels mix the oil which has been used for cooking and will be reused with a chemical product to clear up the color of the oil. The result in both cases is far from health standards.

 

Indeed, it’s a high price the poor have to pay for the agrofuel fever.

 

 Article based on: “Biofuel for machine, ‘Jelantah Oil’ for human”, SETARA, sent by Rivani Noor CAPPA, e-mail: rivani@cappa.or.id, www.cappa.or.id