Indonesia is aiming to exert greater influence over the prices of its top commodities in the early stage of operations at its planned new commodity exchange, the country’s newly appointed chief regulator said on Wednesday, as Jakarta eyes becoming a global price maker.
Part of President Prabowo Subianto’s ambition to expand state control over the country’s vast natural resources, Indonesia’s new minerals and strategic commodity exchange is scheduled to launch on January 1, 2027.
In a fiery speech to parliament last month, Prabowo said the resource-rich country would rather keep its commodities than sell them too cheaply.
Sarjito, who was sworn in as the Financial Services Authority’s chief commodity trading supervisor and regulator on Wednesday, said that in the first stage, the bourse should set a lower target to become more influential on the global stage.
“So in the beginning, we don’t want to become a price taker, but we want to become a price influencer, become an exchange that can be a reference,” he told reporters.
“At the end, of course we must be able to and must be confident to become a price maker,” said Sarjito, who goes by one name.
He did not set a timeline.
Indonesia is the world’s biggest exporter of thermal coal, palm oil and nickel, as well as a major global seller of tin, copper, alumina and coffee beans.
Its palm oil output and export policies are already affecting the benchmark price on Malaysia’s derivatives exchange, while a surge in its nickel production in recent years has also pressured prices on bourses in London and Shanghai.
But industry veterans and analysts have said that Indonesia’s price-setting plan risks backfiring by driving buyers elsewhere should trading through the exchange be made mandatory and if the price differential with other benchmarks becomes too wide.
Nominated to the job by Prabowo, Sarjito secured parliamentary approval last month after vowing to build a trustworthy exchange during a “fit and proper” test.
The new bourse would help tackle tax leakage issues by addressing practices such as under-invoicing and transfer pricing by exporters, Sarjito said.
Sarjito said his short-term priority was to complete commodity trading regulations before the September 17 deadline.
He was not able to share details about which commodities would be traded on the exchange, saying that it would be decided in a presidential regulation.
(Reporting by Fransiska Nangoy; Writing by Gayatri Suroyo; Editing by David Stanway)
