PALMOILMAGAZINE, JAKARTA – Indonesia holds a prominent position in the global crude palm oil (CPO) industry, serving as the linchpin of the palm oil sector’s economic backbone. Despite contributing more than 50% of the world’s demand for CPO, Indonesia has traditionally lacked control over its own CPO pricing, with CPO prices typically referencing Forward Rotterdam and the Malaysia Derivatives Exchange.
Faced with these challenges, the Indonesian government took decisive action. The original Commodity Exchange Trade Law, enacted as Law Number 32/1997, was subsequently revised and replaced by Law Number 10/2011. Under this updated legislation, the government was mandated to establish a commodity reference price through commodity futures.
As a result, the Indonesian government must now respond by issuing Regulation Number 7/2023, outlining the procedures for the physical trade implementation of CPO within the commodity futures framework.
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The historical decision was implemented on 9 October. It was the way to get Indonesian Derivatives and Commodity Exchange. The main goal of CPO futures is about to realize the dream of Indonesia to get its own CPO price which is fair, transparent, and real time.
“The making of CPO exchange is about to realize our dream, Indonesia, to get its own CPO reference price which is fair, transparent, and real time. Commodity exchange in Indonesia would be a voluntary which means, there is no force for every stakeholder to participate in realizing CPO dignity in this country,” Head of Commodity Futures Trading Supervisory Agency, Didid Noordiatmoko said when delivering his speech in Indonesian Derivative and Commodity launching that Palmoilmagazine.com saw, Friday (13/10/2023).
It was not easy to realize the goal. To get CPO dignity in Indonesia, the government and many parties should cooperate. That is why Didid continued, one significant thing is about to involve micro, small, and medium businesses (MSMB), stakeholders into Indonesian CPO exchange.
“Education and training about trade mechanism would be for the (big) stakeholders but also for small and medium scale mills,” he said.
By having the right understanding and trade mechanism in the exchange, MSMB and small and medium scale – mills would optimize their potential and compete fairly. The socialization is about to teach how to trade and deliver their rights and obligation, confirm that every planter gets their big advantages from their participation.
“On 16 October 2023, Monday, we would deliver socialization and training for new candidates of Indonesian exchange. There would be trade expo to escalate trade,” Didid said. (T2)