TEMPO.CO, Jakarta – The Business Competition Supervisory Commission (KPPU) sees a cartel signal from the problem of skyrocketing prices cooking oil. The KPPU’s commissioner, Ukay Karyadi, suspects that large companies that control the domestic cooking oil market share set the price increase at the same time.
“The price of cooking oil in the market is relatively increased together after the increase in the price of CPO (crude palm oil). This behavior can be interpreted as a signal whether this is a cartel because of prices, but this must be legally proven,” said Ukay in a virtual press conference, Thursday, January 20, 2022.
He explained that the cooking oil industry market in Indonesia tends to lead to an oligopoly structure. In the collected consentration ratio (CR) data KPPU in 2019, four major industries seemed to control more than 40 percent of the cooking oil market share in Indonesia.
In addition, in the industrial structure, the big cooking oil players are suspected to be integrated with the palm oil plantation business group and some of its derivative products. This means that each jumbo cooking oil industry generally has palm oil plantations.
From this condition, Ukay sees that the increase in CPO prices should not have too much influence on fluctuations in domestic cooking oil prices. “There is no increase in production costs because the plantation is owned by itself. So even if the CPO for oil production is not increased, the cooking oil factory will still be profitable,” said Ukay.
Ukay said that the KPPU would still explore research on the alleged existence of a cartel in the cooking oil industry. The current data, he said, will be the entrance for KPPU to continue the process towards an investigation.
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