Indonesia Don't Have A Palm Oil Commodity Exchange Yet, What's The Problem?

Acting Head of CoFTRA Didid Noordiatmoko. (Mery Handayani/VOI)

JAKARTA - Indonesia is one of the largest palm oil producing countries in the world. But unfortunately, so far Indonesia does not have its own commodity market and still follows the reference price of the neighboring Malaysian exchange.

Therefore, the Ministry of Trade through the Commodity Futures Trading Supervisory Agency (CoFTRA) is targeting the special commodity market for palm oil this year.

Acting Head of CoFTRA Didid Noordiatmoko explained that with the commodity futures exchange, the recording and establishment of crude palm oil (CPO) prices can be more transparent.

Not only that, Didid said that by making transactions on futures exchanges, it is hoped that there will be facilities for price formation and price reference or price referral.

"By entering the price market that is formed, it cannot be regulated alone between comodity owners and buyers abroad. The state will benefit from a reasonable market price and can provide benefits to all parties, starting from farmers, traders, businessmen and even the state in terms of tax revenues," he said at the opening of the virtual Bappebti work meeting, Thursday, January 19.

However, Didid admitted that the establishment of a commodity futures exchange encountered various obstacles. One of them, commodity transaction data in Indonesia cannot be relied on.

"The commodity transaction data in Indonesia at this time is still not reliable," he explained.

As a result of the lack of reliable data, said Didid, the process of setting reference prices on the futures exchange is not optimal.

Therefore, continued Didid, the establishment of a special commodity futures exchange for palm oil is one of the priorities of CoFTRA this year.

"In 2023, we are also planning to establish a commodity reference price or we call it price reference in accordance with the mandate of Law 32/1997 concerning commodity futures trading," he said.