Premier Insight : President Joko Widodo signed presidential decree that will stop palm oil plantation expansion for the next three years
Friday, September 21, 2018       09:28 WIB

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President Joko Widodo signed presidential decree that will stop palm oil plantation expansion for the next three years. The decree ordered ministers and regional government to ban issuing permits for new plantations. The new regulation also mandates a review on existing permits and concessions while it will also halt any ongoing process on currently assessed permits. (Jakarta Post, Kontan).
 Comment: This is positive for palm oil sector as the new regulation will limit additional plantings by independent farmers which will result in manageable palm oil supply in the long term. We note that palm oil companies within our coverage had not been adding significant planted area in the past several years. Thus, the impact of this regulation is positive for palm oil planters within our coverage as we believe the sentiment will be positive for palm oil price. We maintain our positive view on the sector and reiterate our Buy rating for and . 

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