PALMOILMAGAZINE, JAKARTA – Plans to establish the National Strategic Commodities Exchange have now officially entered the discussion phase at the Indonesian House of Representatives’ Legislative Body. This proposal gained momentum shortly after President Prabowo Subianto delivered the 2027 Draft State Budget Financial Statement at the House of Representatives building in mid-August. At that time, the President touched on a long-standing, recurring issue: Indonesia may hold the status of a leading global producer of palm oil, nickel, and coal, but pricing is actually dictated by foreign exchanges.
On paper, the rationale behind this bill is sound. However, in order to ensure the viability and merit of the bill, it is imperative for all of us to get clarity on ultimate purpose, the intended impacts and legal soundness during the legislative process.
The government aims to plug foreign exchange leakage caused by under-invoicing or transfer pricing, shift pricing authority to domestic entities, and simultaneously boost state revenue. Under this legal framework, two new bodies will be established—the National Strategic Commodities Council (DKSN) and the Strategic Commodities Exchange—along with plans to designate PT Danantara Sumber Daya Indonesia (DSI) as the sole gateway for export activities.
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The problem is, when we examine the direction and details of the draft, fundamental doubts arise. There is a big question mark: Is this regulatory overhaul intended to foster the competitiveness of domestic industries, or is it perhaps just a new ploy to increase state intervention in market trade practices, ultimately leading to rent-seeking?
The implications are no small matter, as they concern the lifeblood of the national economy and the fate of millions of workers and farmers on the ground. Therefore, the House of Representatives and the government must not rush to meet the target of a lightning-fast passage of the bill in mid-September.
The establishment of an institution on the scale of the DKSN and a single exchange requires a truly in-depth and objective academic and economic analysis taking into account the interests and aspirations of key players. It must also be augmented with a judicious process engaging all concerned stakeholders, particularly the most affected but least involved such as farmers in a transparent manner.
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The first critical issue lies in the definition and scope of the commodity criteria themselves. As questioned by a number of legislators in the DPR’s Legislative Body (Baleg), the current definition is too broad and risks becoming a “rubber clause.” Without precise boundaries, nearly all agricultural commodities—even staple foods—could be classified as strategic.
Furthermore, the governance of national commodities requires a balanced synergy between the government, business actors, and producer and farmer associations. Regulations should not stifle the industry’s flexibility or restrict farmers’ operational freedom in the field.
Historical experience shows that the monolithic approach and centralized control of the past—as was once the case with the clove trade—actually led to economic disincentives that harmed farmers.
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We must ensure that regulations intended to strengthen exports do not instead become a pile of restrictions that hinder supply chain efficiency and domestic productivity. Export policy should be based on a noble goal: boosting state revenue while raising the people’s standard of living. However, that aspiration will simply vanish if the institutions managing it operate without transparency and accountability. The positions on the DKSN board and at the commodity exchange must be filled by certified individuals with clean track records, high integrity, and free from personal business interests.
Mechanisms for public oversight must be made as accessible as possible. Without a strong and transparent public oversight system, the designation of a single agency or state-owned enterprise to manage exports risks creating new bureaucratic burdens whose efficiency is questionable.
A close examination of recent policy trends indicates that palm oil derivatives and other key commodities will likely be consolidated under a strict regulatory framework, similar to the mandatory special dollar account for natural resource export proceeds scheme.
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Ensuring that export proceeds return to and circulate within the country is certainly an ideal goal. However, imposing control mechanisms without accompanying incentives, flexibility in the industry’s cash flow, and legal certainty will only shift the problem from one point to another.
The Strategic Commodities Bill has good initial intentions to uphold Indonesia’s economic sovereignty in the global market. However, good intentions alone are not enough; the government and the House of Representatives need to open up a broader space for dialogue with all stakeholders, particularly the affected farmers, small business and traders.
We must ensure that this bill is not introduced merely to control the commodity supply chain from upstream to downstream, but rather to foster and develop it. If that were to happen, the dream of generating foreign exchange earnings could actually be derailed by the regulatory complexities we create ourselves. (*)
By Edi Suhardi / Sustainability Analyst
