(Adds comment from industry groups, detail)
By Fransiska Nangoy
JAKARTA, March 2 (Reuters) - Indonesia, the world's
biggest palm oil exporter, plans to require crude palm oil
exports to go through a futures exchange in order to create the
country's own benchmark price, the head of its commodity futures
regulator said on Thursday.
Authorities are developing a trading scheme for crude palm
oil which aims to launch in June, said Didid Noordiatmoko, head
of the regulator, BAPPEBTI.
"The big strategy is how to require CPO exports to be done
through a futures exchange," he told an industry forum.
Most Indonesian palm oil exporters currently conduct sales
directly with buyers without going through an exchange, while
auctions held by state trading company KPB Nusantara only offer
physical palm oil and not futures contracts.
Refined palm products would be allowed to be exported
directly, Didid said, but CPO must be procured via an exchange.
Authorities hoped that price discoveries could be
reached within a few months after exporters started trading
through an exchange.
Industry groups said they backed policies to help
Indonesia become a price setter for palm oil, but warned that
thorough preparation was needed.
"The rules must be clear and also there should not be
additional costs which could reduce competitiveness of our palm
oil," said Eddy Martono of the Indonesia Palm Oil Association.
Details of the policy were still being discussed, Didid
said, including the possibility of providing fiscal incentives.
Sahat Sinaga, chairman of the Indonesia Palm Oil Board,
said it was important for Indonesia to build trust for an
exchange to be successful, while authorities must also prepare
the infrastructure for the physical trade of the vegetable oil.
(Reporting by Fransiska Nangoy
Editing by Ed Davies, Kanupriya Kapoor)
