Indonesia Will Have A CPO Exchange, Here Are A Series Of Benefits

JAKARTA - The Commodity Futures Trading Supervisory Agency (CoFTRA) of the Ministry of Trade is currently preparing a policy for the export of palm oil (CPO) through the futures exchange. Currently, the formation of the CPO exchange is still in process.

Head of the Commodity Futures Trading Supervisory Agency (CoFTRA) Didodiatmoko explained, CoFTRA prioritized caution in preparing CPO futures exchanges.

"We are keeping the policies and conditions that are being prepared not to collide," he said in an official statement, written on Sunday, August 6.

In this regard, the government has compiled three draft policies and technical provisions related to the CPO futures exchange. First, the Draft Amendment to the Regulation of the Minister of Trade Number 50 of 2022.

Second, continued Didid, the Draft of the CoFTRA Regulation concerning Technical Guidelines for the Implementation of Trade in the Crude Palm Oil Physical Market. Third, the Draft of the CPO Physical Market Order (PTT).

Benefits of CPO Exchange

Didid said the CPO trade in Indonesia currently still refers to the reference prices of the Malaysian and Rotterdam exchanges.

In fact, Indonesia is the largest CPO producer and exporter in the world with a CPO export volume of 3.462 million tons in 2022.

Furthermore, Didid said, this condition became opaque, not real time, and often caused under pricing.

Therefore, Didid assessed that with the CPO exchange, Indonesia will have its own reference price.

"The benefits of CPO export policies through the futures exchange are first, the reference reference price (CPO) is formed which is transparent, accountable, and real time," he said.

Furthermore, Didid said, the second benefit is that the Export Patokan Price (HPE) can be clearly determined and state revenues from taxes will increase.

The third benefit, continued Didid, can encourage the improvement in the price of Fresh Fruit Marks (FFB) by the Ministry of Agriculture and make the benchmark price of biodiesel by the Ministry of Energy and Mineral Resources more accurate.

"In the future, it is hoped that the CPO exchange can facilitate local CPO trading so that transactions on the stock exchange will be more liquid," said Didid.

Regarding the implementation of the Anti-Deforestation Law from the European Union, Didid said, Indonesia and Malaysia must work together and fight for CPO together.

Indonesia and Malaysia are in the same position as the largest producer of CPO so they must fight for CPO together. Regarding the formation of the stock exchange, CoFTRA will learn from commodity exchanges in the world, including exchanges in Malaysia," said Didid.