Some palm oil refiners in Indonesia are avoiding buying fruit from small farmers, a sign of how the government’s commodity export overhaul risks squeezing grower incomes and crimping supplies of the crop.
Several processors have stopped purchasing fresh fruit bunches from smallholders while they wait for clarity on the new export framework, according to people familiar with the matter.
Large refiners that already have sufficient supply from their own plantations are, meanwhile, choosing to avoid spot purchases due to the policy uncertainty, the people said, asking not to be named as they’re not authorized to speak to media.
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