Halt to palm oil expansion to expire soon


As palm prices surge almost 50% in the past year due to tight supply, the government has given few signs on whether the moratorium would remain.

JAKARTA: Indonesia’s moratorium on new oil palm plantation permits is set to expire this week as the industry awaits clarity on whether the government will extend the policy.President Joko Widodo ordered a stop to permit issuance for new plantations and expansion of existing ones for three years in a decree signed on Sept 19, 2018.

That order expanded on an earlier ban on permits for plantations on primary forest and peat land. As palm prices surge almost 50% in the past year due to tight supply, the government has given few signs on whether the moratorium would remain.

The breakneck expansion of plantations through South-East Asia has come at the expense of vast swathes of tropical rainforest.

An extension could lead prices to climb higher as there’s been slow replanting of old oil palm trees, said Christopher Andre Benas, an analyst at RHB Sekuritas.

Since the moratorium, the government has found about three million hectares (ha) of palm oil plantation operating without permits in forest areas.

The South-East Asia country has identified about 16.4 million ha of land planted with the crop, of which 6.72 million ha belong to smallholders.

Crude palm oil production is set to rise but land expansion could grow slower as existing plantations take advantage of their land bank, said Sathia Varqa, owner of Palm Oil Analytics in Singapore.

He expects Indonesia’s output to rise by two million tonnes to 48 million tonnes this year as production increases in frontier areas like Kalimantan.

The policy makes a difference in deforestation if it’s well implemented, he added. — Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Indonesia , halt , palm oil , plantation , expansion , expires ,

   

Next In Business News

US to lift restrictions Nov 8 for vaccinated foreign travelers
China aluminium firm Zhongwang flags 'severe difficulties' at subsidiaries
Toyota cuts November output, after supplies slowed from Malaysia and Vietnam
Oil prices rise to three-year high on back of supply deficit forecasts
World stocks notch best day in 5 months
DNB gets Malaysia ready for 5G
Telcos post-5G rollout
Short Position - Listed companies, healthcare valuations, demographic dividend
A perfect storm driving energy prices
CPO prices expected to be lower in 2022, say market analysts

Others Also Read


Vouchers