Jakarta. The Indonesian government has threatened strict sanctions against companies buying fresh fruit bunches for cheap from palm oil farmers.

According to Agriculture Minister Andi Amran Sulaiman, global palm oil prices had recently hit Rp 27,000 (around $1.49) per kilogram. However, prices among Indonesian farmers were only at Rp 14,000 per kilogram.

“A stronger dollar should have been a boon for palm oil, coffee, cocoa, and coconut farmers. But instead, prices [among farmers] dropped. What's going on?" Amran said.

He said that he has consulted with President Prabowo Subianto on this matter.

“If there are companies that don't raise [the purchase] prices and are hurting farmers, we'll shut them down, if necessary. This deals with the livelihoods of around 15 million palm oil farmers across the country," Amran said.

The government has tightened oversight of palm oil trade. Palm oil is one of Indonesia’s mainstay export commodities. It is also now subject to the country’s single-gate export system. 

“The government will make sure that our farmers receive fair prices,” Amran said.

Indonesia is the world's largest palm oil supplier.

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