Pricing & purchasingThe FFB price for partner smallholders is set by the head of the provincial estate crops office (Disbun) using the formula in Permentan No. 13 Tahun 2024 (which replaces Permentan 01/2018): FFB price = K index × (CPO price × CPO extraction rate + PK price × PK extraction rate). The K index is the share the smallholder receives, calculated from the mill’s sales and costs in the previous period. Prices at a ramp or collector are not governed by this formula; they are negotiated and usually already net of haulage, shrinkage and margin.
Read the articleCertification & traceabilityThe EUDR (Regulation (EU) 2023/1115) requires palm oil products entering the EU to be deforestation-free since 31 December 2020, produced in line with the laws of the country of origin, and covered by a due diligence statement. As of 18 October 2026, it applies from 30 December 2026 for large and medium operators and from 30 June 2027 for micro and small operators. For mills and estates, the most important preparation is data: the geolocation of every plot that supplies FFB, including external FFB, proof of land legality, and a chain of tickets linking every truck to its plot.
Read the articleMill operationsOil losses are oil thrown away with press fibre, on nut surfaces, in empty fruit bunches, sterilizer condensate, and sludge or effluent. An MPOB bulletin classifies total losses below 1.3% of FFB as good, 1.3–1.8% as average, and above 1.8% as poor. There are three keys: measure every point per shift with the same method, convert the oil content of each sample into losses against FFB, and calculate the daily figure from a weighted total, then record it in the daily mill report (LHP).
Read the articlePricing & purchasingA well-run ramp records every purchase per grower: gross, tare, net, deduction, paid weight, price, and PPh 22 where it applies. Every truck to the mill is reconciled: the total weight loaded is compared with the mill weighbridge net weight to calculate shrinkage, and the mill’s grading deduction, sales value and the PPh 22 collected by the mill are worked through to the margin. PPh 22 on purchases of plantation produce by industrial companies or exporters is 0.25% of the purchase price excluding VAT (PMK 51/2025). Purchases of up to Rp20 million per tax period are not subject to collection.
Read the articleMill operationsA weighted grading deduction multiplies the percentage of each quality criterion in the sample (for example, unripe bunches) by its weight, then adds up the results. That deduction (%) is applied to the ticket’s net weight to give the deduction in kilograms. The key is to agree the weights up front and use the same formula on screen, in the grading minutes and on the ticket.
Read the articleMill operationsOER (oil extraction rate) is the CPO produced divided by the FFB processed, times 100%. KER is the palm kernel (PK) produced divided by the FFB processed, times 100%. For a period, add up the CPO, PK and FFB of every shift first and then divide; do not average the shift percentages.
Read the articleImplementationA one-day go-live is only possible when the heavy lifting is done beforehand: master data and opening balances are clean in the templates, the chart of accounts and parameters are decided, and users are trained. On the day itself you only install, import, check, back up and enter the first transactions.
Read the article
