Evaluation of Domestic Market Obligation (DMO) Implementation on Cooking Oil Export Performance

International Journal of Economics and Management Studies

© 2025 by SSRG - IJEMS Journal

Volume 12 Issue 3

Year of Publication : 2025

Authors : Muhammad Syaripuddin, Novi Shintia, ⁠Heppy Mutammimah, Rini Amelia, Nia Aziati Faradisa

10.14445/23939125/IJEMS-V12I3P101

How to Cite?

Muhammad Syaripuddin, Novi Shintia, ⁠Heppy Mutammimah, Rini Amelia, Nia Aziati Faradisa, "Evaluation of Domestic Market Obligation (DMO) Implementation on Cooking Oil Export Performance," SSRG International Journal of Economics and Management Studies, vol. 12,  no. 3, pp. 1-8, 2025. Crossref, https://doi.org/10.14445/23939125/IJEMS-V12I3P101

Abstract:

The Domestic Market Obligation (DMO) policy, implemented to stabilize Indonesia's domestic cooking oil supply and prices, has significantly impacted the export performance of refined, bleached, and deodorized palm oil (RBDP Olein). This study evaluates the effects of DMO on the export performance of PT. Citra Borneo Utama Tbk, a major player in Indonesia's palm oil industry, proposes optimisation strategies. The results indicate a mixed impact of DMO, with positive effects such as market stability and production efficiency, alongside challenges like reduced export flexibility, dependency on domestic markets, and compliance inefficiencies. Export volume steadily recovered post-implementation, supported by strategic compliance with DMO regulations. Three primary strategies were identified to enhance export performance under DMO: market diversification to emerging regions like Africa and the Middle East, strengthening stakeholder collaboration to improve regulatory compliance, and technological innovation to boost production efficiency. The study aligns with global insights, highlighting the delicate balance required between domestic market obligations and export growth. These findings underscore the importance of policy refinements to ensure domestic market regulations contribute to economic growth while maintaining competitiveness in global markets. Future research should explore the long-term impacts of DMO and potential synergies between domestic and export markets for sustainable industry growth.

Keywords:

Domestic Market Obligation, RBDP Olein, Palm oil export, Market diversification, Production efficiency.

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