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 September 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 Southeast 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
3 million hectares of palm oil plantation operating without permits in forest areas.