CPO Exchange Establishment: Strengthening the National Strategic Commodity Position

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CPO Exchange Establishment: Strengthening the National Strategic Commodity Position. Photo by: Special

PALMOILMAGAZINE, JAKARTA – In a move to fortify the strategic standing of a key commodity in Indonesia, Kasan Muhri, the Head of Commodity Futures Trading Supervisory Agency at the Ministry of Trade, emphasized the significance of establishing the Indonesia Crude Palm Oil (CPO) Exchange on October 13, 2023.

This initiative, designed for the local market, is voluntary and aims to create a transparent, credible, and real-time reference price for CPO. The primary objective is to provide substantial control for Indonesia over the CPO reference price, reducing dependence on the Malaysia Derivatives Exchange and Rotterdam.

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The establishment of a CPO reference price holds economic importance, impacting not only export reference prices but also contributing to increased tax revenue. This development is poised to yield positive outcomes for the fresh fruit bunch (FFB) prices regulated by the Ministry of Agriculture and the biodiesel reference prices regulated by the Ministry of Energy and Mineral Resources, ensuring greater accuracy in the process.

Also Read: Apkasindo Urgently Needs to Establish a CPO Exchange in Indonesia

Since Indonesia CPO Exchange was established, many have been done to support it. Commodity Futures Trading Supervisory Agency, Indonesian Chambers and related association did socialization, approach to every stakeholder, and delivered technical training. In 2023, 34 CPO companies registered as the members of the agency and the transaction reached 1.822 lots (equal to 9.110 metric tons).

Not only that Commodity Futures Trading Supervisory Agency did strategic things by expanding ports to handover physical CPO to be 19 ports by publishing peraturan tata tertib (PTT) about the exchange. The ports are in strategic regions, such as Meulaboh, Teluk Bayur, Pulau Bali, Jayapura and Merauke. The port expansion would be about to escalate flexibility and fastness in physical CPO transaction.

“As the concrete thing in 2024, Commodity Futures Trading Supervisory Agency encouraged to escalate CPO transaction liquidity in the exchange. I also ask for the CPO ecosystem to implement physical exchange and future better by delivering more optimal services,” Kasan said, as in the official statement to  Palmoilmagazine.com, Saturday (13/1/2024).

The other strategic things are about to escalate trainings and socialization for stakeholders, encourage CPO transaction in export orientation, reinforce collaboration among the exchange, unit, related ministries, and association, and encourage to deliver incentive for local CPO stakeholders. (T2)

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