Indonesia’s palm oil sector faces a sudden slump as several refiners halt fresh fruit bunch purchases from small farmers. The pause comes amid a government push to overhaul commodity export rules, leaving growers stranded and suppliers scrambling for clarity. The move signals a sharp shift in the supply chain that could dent industry margins.

Processors cite uncertainty over the new export framework, which aims to tighten tracking and payment terms for palm oil. Without definitive guidelines, firms fear costly compliance mismatches and market volatility. Small farmers, who supply most of the country’s fruit, risk losing a vital income stream as buyers defer orders.

The halt risks a ripple effect through Indonesia’s palm oil export chain, potentially tightening global supply and nudging prices up. Investors watching the sector note that any slowdown in fruit availability could squeeze refinery margins and trigger cost adjustments across the value chain.

For small farmers, the pause spells immediate income loss and a scramble to find alternative buyers. Regulators face pressure to finalize the export framework quickly, lest the sector’s supply disruptions erode Indonesia’s standing as the world’s largest palm oil producer.