Bappebti: Establishment of Commodity Reference Price as Mandated by Law 32/1997

Bappebti: Establishment of Commodity Reference Price as Mandated by Law 32/1997

Head in duty of Bappebti, Didid Noordiatmoko. Credit: Ministry of Trade

Palmoilmagazine.com, JAKARTA – Minister of Trade, Zulkifli Hasan did appreciate the initiative of Badan Pengawas Perdagangan Berjangka Komoditi (Bappebti) to establish mainstay commodity reference price and escalate the operational of sistem resi gudang (SRG). "It is hoped that the both would be parts to stabilize commodity price, deliver advantages for the people in persons, namely the farmers, smallholders, micro, small, and medium businesses (MSMB),” he said when in his opening speech of the work meeting of Bappebti, Thursday (19/1/2023) at the auditorium of Minister of Trade, Jakarta.

Meanwhile Head in duty of Bappebti, Didid Noordiatmoko mentioned, his side planned to establish commodity price reference based on the mandate of Laws Number 32 / 1997 about Commodity Exchange in 2023.

It is because Indonesia has no certain commodity price reference whereas it is the biggest producer of some commodities. The exchange would manage a transparent and fair - trade governance. By joining exchange, the price established would not be determined by between foreign buyers and commodity producers.  

He said, crude palm oil (CPO) and rubber, for instance, Indonesia is the biggest producer of the two but still refers to the price in foreign exchange, such as, Malaysia and Rotterdam.

“To get the price reference, the commodities should be taking part in the exchange. The country would get profits by fair price and would deliver profits for many parties, such as, farmers (smallholders), traders, businessmen, and even the country in the form of tax revenue,” Didid said, as in the official statement to Palmoilmagazine.com, Thursday (19/1/2023).

He also told, Bappebti would encourage to develop SRG. It is one tool in the world trade to provide the cheap financing with commodity collateral. But it would be running well if the offtaker (supplier) supports. Those who produce commodity would take advantages by SRG mechanism if the commodities would be bought or indented. It means, SRG mechanism would be used to fund smallholders who just harvested and hope that the commodity would not be cheaper. Besides, SRG could be used by MSMB that wants to do export before their numbers products or commodities are the same with the expected quota.

“What we studied is that they who took advantage on SRG scheme, would get 1,6 times of income better than those who did not advantage it. The main issue that we found about SRP was that the people have little literation of SRG and the regional governments did not optimally understand its mechanism,” Didid said. (T2)

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