Jakarta. Indonesia’s upcoming commodity bourse will operate a spot market, according to a senior official, as the country’s financial watchdog irons out the regulatory details.
On Friday’s high-stakes annual budget speech, President Prabowo Subianto announced plans to form a bourse dedicated to minerals and strategic commodities. Prabowo finds the move necessary to be able to set commodity reference prices that favor Indonesia. He wants this exchange to be operational by Jan. 1. Sovereign wealth fund Danantara revealed that the bourse would have its assets traded for immediate payment and delivery; in other words, a “spot market” style.
“Our mineral bourse is more of a spot market in nature,” Danantara chief executive officer Rosan Roeslani told journalists in the evening.
The Prabowo administration has been going all out for greater state influence over the country’s natural resources, starting by centralizing exports through a Danantara unit. Prabowo has named the bourse as the next phase of this one-gate export policy.
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“The exchange will hopefully improve the transparency in the transactions,” Rosan said, amid Jakarta’s concerns over under-invoicing and transfer pricing.
Prabowo has appointed the Financial Services Authority (OJK) to supervise the exchange. OJK boss Friderica Widyasari Dewi revealed that the watchdog was still drafting the bourse’s regulation that is set to be published by Sep. 17. The watchdog plans to consult with lawmakers.
“There will also be a separate presidential regulation on the types of minerals and commodities to be traded in the exchange,” Friderica said.
OJK has also begun identifying the human capital and budget to run the bourse.
Expansion to Indonesia’s one-gate export policy — led by Danantara Sumberdaya Indonesia (DSI) — was also a highlight in Prabowo’s budget speech. Only coal, ferroalloys, and palm oil are currently subject to this trade regime, but Prabowo intends to have DSI’s scope cover “all strategic commodities”. The government has yet to disclose the timeline of the expansion, including the commodities to be introduced in the next stage.
“There will certainly be an expansion [to the one-gate export regime], but we are starting with just three [commodities] because they contribute the largest [to our exports],” Rosan said.
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