Structure Market Of Crude Palm Oil Industry In Indonesia

Abstract

The Indonesian Competition Commission (ICC) in 2022 has compiled a study on Alleged Control of Business Use Rights in the Palm Oil Plantation Sub-Sector that Can Result in Monopolistic Practices or Unfair Business Competition with the conclusion that the results of the analysis conducted on secondary data regarding companies engaged in the palm oil and cooking oil agribusiness system, the conclusion is obtained that leads to the alleged potential violation of Article 17 of Law Number 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition. The palm oil agribusiness system is closely related to the palm-based cooking oil industry system. However, the two systems each have a structural pattern that has a very high level of complexity. The Palm Oil industry has a market structure of oligopoly in the downstream, and oligopsony in the upstream. This condition allows the dominant company to become a price maker at all stages of the palm oil industry supply chain. Oligopoly and oligopsony conditions can cause deadweight loss for smallholder oil palm farmers (pressure on FFB prices), consumers (palm oil prices), and even the government