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Shares of Wilmar International Ltd fell at their sharpest pace in nearly six years after the Indonesian government named the palm oil giant among companies under investigation on suspicion of committing export violations.
The Singapore-listed company's shares fell by as much as 11% on Thursday, the largest intraday decline since 2020, before paring losses to trade at S$3.38 per share by 12:36 PM local time.
Wilmar — the world's largest palm oil refiner with plantations in Indonesia — and Musim Mas Group are among 10 palm oil producing companies under investigation on suspicion of manipulating export invoices and engaging in transfer pricing, Finance Minister Budi Gunadi Sadikin told reporters in Jakarta on Tuesday. These practices were among the reasons cited by President Prabowo Subianto last week when he said the government would take greater control over the country's commodity exports.
This new investigation represents further challenges for Wilmar in Indonesia. The company had to forfeit a 12 trillion rupiah deposit — valued at approximately $729 million US dollars at the time — to the Attorney General's office last year as part of a separate palm oil export investigation.
Wilmar said in a statement it had not received official notification of the investigation but was "working with the relevant authorities to understand their concerns" and would inform the market upon receipt of official notification.
President Prabowo's announcement has alarmed investors and caused sharp volatility in palm oil markets, as industry participants eagerly await more clarity on how the new export framework will operate. Indonesian state-linked CPO tenders — which serve as benchmarks for domestic prices and export offers — have been suspended since the announcement, while many processing companies have avoided purchasing fresh fruit from smallholder farmers pending clarity on the situation.
Source: The Edge Singapore
