Palm oil stocks slide after Singapore begins looking into which firms responsible for haze

Shares of palm oil producers experienced a decline on Friday, October 16, following Singapore Prime Minister Lawrence Wong's announcement on Facebook regarding the country's investigation into potential companies responsible for haze-causing fires. Wong stated that Singapore may take action under its Transboundary Haze Pollution Act and consider joint action with other nations.

First Resources shares plummeted by 9.1% to S$3.71, while Bumitama Agri dropped 7.5% to an intraday low of S$1.73. Golden Agri-Resources saw a 6.9% decrease to S$0.27.

A recent Greenpeace investigation revealed that First Resources and Bumitama Agri are among the entities with concession areas linked to haze source points. First Resources defended itself, claiming that the fires within its Indonesian palm oil concessions were primarily caused by external blazes spreading across its boundaries. The company attributed the heightened fire risk in West Kalimantan to a severe El Nino-induced drought.

Indonesia attributed its worst wildfire season in 11 years to peatland degradation by former food estates and stated its commitment to restoring the country's peat ecosystem. Singapore's air quality deteriorated overnight, with the 24-hour Pollutant Standards Index reading in the central region reaching the "very unhealthy" level at midnight on Friday, marking a new high for the year. At 9 am, readings in the rest of the country were classified as "unhealthy."

Minister for Sustainability and the Environment Grace Fu mentioned on Wednesday that Singapore is "keeping its options open" on whether to take action against errant companies under the Transboundary Haze Pollution Act. The move followed a statement from a National Environment Agency spokesperson, who said that the agency has been closely monitoring the haze situation, collecting data on fire hotspots, their sources, and the impact on Singapore's air quality.