JAKARTA - Indonesia has launched a crude palm oil exchange that aims to make Indonesia the global determinant of palm oil prices, said Trade Minister Zulkifli Hasan, reported ANTARA news agency.
He expressed the hope that Indonesia would become the number one in CPO exports, with this exchange serving as a global benchmark for CPO prices.
In 2022, Indonesia's CPO exports reached nearly 47 million tons with a value of US$29.62 billion. However, Indonesia still relies on prices set by the Rotterdam and Malaysian exchanges as it lacks its reference price.
The CPO exchange's launch is expected to strengthen palm oil trade performance, creating a transparent, fair, accountable, and real-time pricing mechanism.
Zulkifli emphasised that the government's role in the CPO exchange is that of a facilitator. He called on CPO industry players to participate actively in the exchange, enabling Indonesia to realise its vision of becoming a global reference for CPO prices.
The head of the Commodity Futures Trading Regulatory Agency (Bappebti), Didid Noordiatmoko, noted that the Indonesia Commodity & Derivatives Exchange (ICDX) has been designated as the physical CPO market operator on the exchange.
This trading is voluntary, meaning participation is not mandatory, but industry players are expected to willingly participate.
The CPO exchange is designed to place buyers and sellers on an equal footing, allowing for effective price negotiations. Ultimately, it will lead to the establishment of a benchmark price for CPO.
Currently, 18 CPO industry players have joined the exchange, showing strong interest from stakeholders to promote more transparent and equitable CPO trade.
The exchange is expected to be fully operational by October 23, 2023, enabling the development of a price reference for CPO by the first quarter of 2024. -BERNAMA