(Jan 7): Indonesia plans to reclaim millions more hectares of land that it deems are being used illegally, intensifying a campaign to tighten oversight of its vast resources sector.
The nation’s government has already seized some four million hectares of palm oil plantations, mine concessions and processing facilities — an area roughly the size of Switzerland — under a crackdown launched last year by Indonesian President Prabowo Subianto against malfeasance in the commodities sector. That area may soon double, according to comments he made at a rice harvest ceremony in West Java on Wednesday (Jan 7).
“In 2026, we may seize another four or five million hectares,” Prabowo said. “We have taken action against hundreds of illegal mines and saved hundreds of trillions of rupiah, but there is still a lot of leakage.”
Shifting such large swathes of land under state control has sparked concerns about future production from Indonesia, the world’s biggest palm oil grower and nickel miner. It could also dampen investments into the palm sector due to uncertainty over ownership.
The country has around 16 million hectares of palm oil plantations, according to the Indonesian Palm Oil Association, known as Gapki. A large chunk of those taken so far have been handed to PT Agrinas Palma Nusantara, a state-owned firm newly tasked with managing the estates. The additional land seizures could further hurt Indonesia’s palm supply outlook this year and beyond, according to several palm oil traders, who requested anonymity as they were not authorised to speak publicly.
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“It will definitely hurt supply if the seizures materialise,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.
Benchmark palm oil futures in Kuala Lumpur climbed as much as 1.4% after Prabowo’s announcement, the biggest intraday increase in a week.
Gapki warned sweeping enforcement could risk affecting smallholder-owned plantations, chairman Eddy Martono said in a text message. About nine million hectares of the country’s total palm area are controlled by companies, with smallholders accounting for the rest.
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The nation’s palm oil smallholders’ association did not immediately respond to a request for comment. The chairman of the Indonesian Mining Association also did not immediately respond.
Prabowo also called on government officials to unite in fighting corruption, eradicating abuses and upholding the law “without any hesitation”.
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