Limited impact seen from Indonesia moratorium

LOCAL planters with operations in Indonesia are not expected to be severely impacted by the latter’s recent decision to impose a three-year moratorium on new oil palm plantations, according to analysts.

The freeze on the permits for new oil palm developments and a review on existing plantations by Indonesia are seen as an extension of a five-year moratorium on new oil palm plantation concessions proposed in mid-2016 by Indonesia President Joko Widodo in an attempt to safeguard a healthy and sustainable environment.

Back in May 20, 2011, Indonesia put into effect a two-year primary forest moratorium.

This has been extended twice, once during the administration of the then president Susilo Bambang Yudhoyono and twice by Widodo.

This was due to the fierce international criticism on Indonesia’s weak environmental policies particularly during the massive forest fires in Sumatra and Kalimantan between June and October 2015 – touted to be among the worst man-made natural disasters ever recorded, which resulted in toxic haze spread throughout South-East Asia.

One local planter with operation in Kalimantan tells StarBizWeek that most Malaysian planters operating in Indonesia have large tracts of existing land bank there, which can still be cultivated with oil palm or undertake new replanting activities.

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Plantations , Palm Oil , Moratorium