Malaysia has directed palm plantations to continue operations even as the country shuts businesses to prevent the spread of the coronavirus, a producer group said on Wednesday, ensuring steady supplies of the tropical oil to global markets.

The country has closed its borders and restricted internal movement by shutting schools and businesses from Wednesday until March 31, after its tally of infections climbed to the highest in Southeast Asia, at 790 cases and two deaths.

Closure of palm plantations as a part of the measures earlier had caused concerns among top importers, including India.

But the Commodities Minister on Wednesday agreed to exempt palm plantations from the restricted movement order, Nageeb Wahab, chief executive of the Malaysian Palm Oil Association, told Reuters .

“The Minister informed us that the Cabinet has reviewed our appeal and reasoning, and consented to allow the industry to resume operations with immediate effect,” Nageeb said.

Global supply concerns

Malaysian palm oil futures jumped 5 per cent in early trade on supply concerns after plantations were forced to shut operations. Palm futures prices also rose in China and India.

Palm oil analysts had estimated that Malaysia’s crude palm production would drop by 350,000-700,000 tonnes for the month of March due to the harvest pause, potentially cutting March inventories to 1.0-1.3 million tonnes.

India, the world’s top vegetable oil importer, could have taken a hit if the supply was disrupted, said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil broker

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