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Indonesia Taking Strategic Steps To Implement Commodity Price References For The World

World Trade – Commodities

Open Eyes Opinion {source: IDgov}


Indonesia Can Shape World Commodity Price Reference

The Ministry of Trade’s Commodity Futures Trading Regulatory Agency (CoFTRA) is currently devising a big plan to prepare a strategy so that Indonesia can shape the price discovery and become the world commodity price reference.

As the world’s main export commodity producer, CoFTRA believes that these strategic steps can be implemented through the futures market.

“As the world’s main producer for export commodities such as rubber, cocoa, CPO, tea, coffee, gold, copper, tin, nickel, and coal; we should be able to determine commodity prices as a reference for the world,” asserted the Head of CoFTRA, Sutriono Edi, at the Ministry of Trade Office today on Wednesday 08 April.

CoFTRA invited the representatives from various stakeholders and commodity associations in Indonesia to a Commodity Associations Technical Meeting at the Ministry of Trade Building Jakarta, today 08 April. Through this event, it is hoped that CoFTRA would be able to obtain a lot of feedback and suggestions from representatives of commodity associations in order to shape the world commodity price reference and develop the futures exchange in Indonesia.

Sutriono and practitioner of the futures exchange, Hasan Zein Mahmud, were present as keynote speakers. Both presented a paper on strategic steps of the Indonesian Exchange to become the world price determiner through physical commodity trade.

Meanwhile, the main topic was presented by Expert Assistant to the Minister of Trade for the National Strengthening of Trade, Ardiansyah Parman. The event was moderated by Professor of Universitas Lampung Prof Dr Bustanul Arifin. Sutriono asserted that Indonesia’s aspiration, to be a country that is independent in the trade of the world’s main export commodities that determines the price discovery of commodities and become the world price reference, can be achieved.

“Though we still face obstacles, we are adamant that these aspirations can be achieved,” said Sutriono. A number of challenges were also presented by Sutriono Edi. Currently, Indonesia has yet to be a market that is appealing for investors to conduct world export commodity transactions because of the lack of liquidity provider that has the potential to increase the liquidity of the commodity market. Besides that, practitioners of the physical commodity market have yet to be consolidated well. The other challenge is the lack of organized, reasonable, orderly, transparent, and accountable physical commodity trade.

“To get around that problem, we need strategic steps to make Indonesia become the place for price discovery and world commodity reference price through the utilization of the futures exchange,” Sutriono added. Sutriono asked all parties in all commodity associations to support this government effort, particularly in developing a futures market as a means of risk management, price discovery, and investment.

“We need a strategy that’s focused on the creation of an organized physical market, consolidation of the commodity market, implementation of commodity quality standards, access to funding, and regulation packages,” said Sutriono Next, CoFTRA will formulate regulations on the trade system for Indonesia’s main commodities.

Also present at this technical meeting were representatives from the Ministry of Trade’s Directorate General of Domestic Trade, Directorate General of Foreign Trade, the Directorate General of International Trade Cooperation, the Directorate General of National Export Development, the Directorate General of Standardization and Consumer Protection, Trade Policy Analysis and Development Agency, along with the Board of Directors of Future Exchanges and BOD of Futures Clearing Institutions, and also representatives of various associations including the Commodity Futures Trading Association (ASPEBTINDO), the Indonesian Palm Oil Association (GAPKI), the Rubber Association of Indonesia (GAPKINDO), the Indonesian Cocoa Association (ASKINDO), the Indonesian Cocoa Industry Association (AIKI), the Indonesian Coffee Exporters Association (ICEA), the Indonesian Tea Traders Association (ASPEGTINDO), the Indonesian Tin Exporters Association (AETI), the Indonesian Seaweed Association (ARLI), the Indonesian Association of Coal Entrepreneurs (APBI), and the Indonesian Nutmeg Exporters Association (AEPA).



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