This study employs the price relationship equation statistical test and the Error Correction Model (ECM) regression to analyse the transmission of crude palm oil (CPO) prices at the exporter level and its effects on the selling price of fresh fruit bunches (FFB) at the smallholder’s level in Dharmasraya Regency, Indonesia. Data were collected through both quantitative and qualitative surveys, involving 150 respondents, including independent smallholders (117), small collectors (25), large collectors (10) and palm oil mills (3). Results revealed a price transmission elasticity of less than 1 (ET<1), indicating asymmetric price transmission where small and large collectors, as well as palm oil exporters, significantly influence the FFB selling prices for independent smallholders. Furthermore, the extended supply chain contributes to narrow profit margins for farmers. To enhance sustainability in palm oil production, it is essential to establish cooperative-based mini- CPO and red palm oil (RPO) factories and implement an integrated information technology system within farmers’ institutions to provide real-time data on selling and buying prices, as well as FFB quantities. This study contributes to sustainable practices in the palm oil sector by addressing price asymmetry, ultimately aiming to improve the economic well-being of smallholders and strengthen the overall sustainability of the palm oil supply chain.