JFX CEO: Strengthening Price Discovery is Important to Build Domestic Commodity Reference Prices

President Director of PT Bursa Berjangka Jakarta (JFX), Yazid Kanca Surya. (Photo: Doc. JFX)

JAKARTA - In the midst of efforts to strengthen the transparency of national commodity trade, Indonesia needs to strengthen the price discovery mechanism in the country so that the reference price can better reflect the conditions of the national market.

As the world's largest palm oil producer, Indonesia has a strategic position to establish a more credible domestic reference price through transparent, liquid, and sustainable trading activities.

The President Director of PT Bursa Berjangka Jakarta (JFX), Yazid Kanca Surya, said that strong reference prices were not born from unilateral determination, but from transactions that truly reflect the interaction between supply and demand in the market.

"The reference price is built through the price discovery process. When transactions take place openly, involve many market participants, and are carried out continuously, the price formed will increasingly reflect the actual market conditions. From this process, a credible reference price is born," said Yazid, in his statement, Tuesday, August 4.

According to him, strengthening price discovery is becoming increasingly relevant for Indonesia which has an important role in trading strategic commodities, including palm oil. So far, business actors still rely heavily on international benchmarks as price references.

In fact, as a major producer, Indonesia has the opportunity to strengthen the formation of prices in the country so that it can present references that increasingly reflect the characteristics of the national market.

The process, continued Yazid, cannot be separated from active trading activities. The more transactions are carried out through exchange mechanisms with standardized contracts and transparent recording, the more representative the price formed as a reflection of market conditions.

As an illustration, palm oil trading in recent weeks has been dynamic. In the last week of July 2026, the global benchmark price of Olein referring to the FPOL Bursa Malaysia Derivatives (BMD) increased by 3.52 percent, from 1,135 US dollars per ton to 1,175 US dollars per ton compared to the previous week.

The increase was driven by the strengthening of Brent crude oil prices by 4.23%, an increase in demand from China, and expectations of tighter Indonesian palm oil supplies.

Amid this dynamic, trading activity for Olein at JFX continues to show maintained liquidity. Throughout the period from June 28 to July 25, 2026, the volume of olein transactions reached 67,564 lots with a transaction value of around IDR 6.85 trillion. According to Yazid, this activity is part of the process of forming prices that are increasingly active through transparent trading mechanisms.

"The more active the transaction takes place, the more market information is reflected in the price. For business actors, the price formed through this process not only serves as a reference in making transactions, but also serves as a basis for managing risk when the market moves very dynamically," he explained.

He added that the volatility of global commodity prices currently makes business actors face increasing uncertainty. Price changes are no longer influenced by one factor, but a combination of supply conditions, global demand, energy prices, and policies in various countries.

"In a situation like this, business actors need reliable price references. These prices become the basis for formulating sales strategies, maintaining business margins, to hedging against price fluctuations. The better the price discovery process, the stronger the decision-making basis for the business world," continued Yazid.

Apart from Olein, other commodity trading activities on JFX also continued to show consistent development. Throughout July 2026, export tin transactions reached 2,855 lots with a transaction value of around IDR 2.66 trillion, amid the relatively stable movement of tin reference prices on the London Metal Exchange (LME) with a slight correction of 0.19% in the period 19-25 July 2026.

Meanwhile, Foreign Access Trading (PALN) activity recorded a transaction value of around IDR 54.45 trillion with a volume of more than 3.92 million lots in the same period. Overall, the transaction value of trading throughout July at JFX reached around IDR 3.268 trillion, consisting of multilateral, bilateral, and PALN transactions.

Yazid assessed that the increased trading activity showed that the exchange mechanism was increasingly used as a means of transaction as well as the formation of transparent prices.

"The ultimate goal is not just to have a domestic reference price. More importantly, is to build a price formation process that is trusted by market participants because it is born from real and transparent transactions. When the process is stronger, the benefits are not only felt by business actors through better risk management, but also support the overall transparency of national commodity trading," concluded Yazid.