(May 28): Wilmar International Ltd fell the most in almost six years after the Indonesian government named the palm oil titan as one of the companies being probed for suspected export abuses.
Shares traded in Singapore slid as much as 11% on Thursday, the biggest intraday drop since 2020, before paring losses to trade at $3.38 a piece by 12.36pm local time.
Wilmar, the world’s biggest palm oil refiner with plantations in Indonesia, and Musim Mas Group, are among 10 palm producers being investigated for suspected under-invoicing and transfer pricing of exports, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on Tuesday. Those practices were among the reasons President Prabowo Subianto gave last week when he said the government would take greater control of the country’s key commodity exports.
The fresh probe spells more challenges for Wilmar in Indonesia. The company last year had to relinquish a 12 trillion rupiah deposit — valued at the time at US$729 million — to the Attorney General’s Office as part of a separate probe related to palm oil exports.
Wilmar said in a statement it has not received official notification regarding the investigation, but is “working with the relevant authorities to understand their concerns” and will update the market if it receives the official notice.
Prabowo’s announcement has rattled investors and whipsawed the palm market, with industry participants desperate for more clarity on how the new export framework would work. Indonesian state-linked crude palm oil tenders, which serve as a benchmark for domestic prices and export offers, have ground to a halt since the announcement, while several processors have avoided buying fruit from small farmers while they wait for more clarity.
See also: Oil palm fruit left to rot as Indonesia export revamp hits farmers
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