Heaptalk, Jakarta — Indonesia’s government, through the Ministry of Trade, officially launched a Crude Palm Oil (CPO) exchange on Friday (10/13).
Inaugurated directly by Indonesia’s Minister of Trade, Zulkifli ‘Zulhas’ Hasan, at Mulia Hotel, Jakarta, he delivered that Indonesia’s CPO exports have reached almost 47 million tonnes, or around US$29.62 billion in 2022. However, he conveyed that the archipelago still needs to work hard to possess its own Crude Palm Oil prices and reducing or even omiting its dependency from other countries (Malaysia and Rotterdam, Belanda). By launching this CPO exchange, he looks forward to making Indonesia a worldwide benchmark for palm oil prices.
“The launch of this exchange is expected to strengthen the performance of palm oil trading in establishing transparent, fair, accountable, and real-time prices. For this reason, the government will participate as a facilitator in the CPO exchange. We also expect that industry entrepreneurs can participate in the futures exchange to realize Indonesia’s goal of becoming the world’s barometer. Their awareness is essential to bolster the country to be a leader in producing crude palm oil worldwide,” Zulhas said.
Simultaneously, the Head of Indonesia’s CoFTRA, Didid Noordiatmoko, voiced that the archipelago contributed 50% to the world’s CPO necessities. However, he also recognized that the country led by Jokowi still needs to arrange the reference price independently. For this reason, he affirmed that CoFTRA had issued several regulations to re-regulate the governance of CPO trading on the futures exchange.
Regarding the CPO exchange organizer, Indonesia’s CoFTRA has appointed Indonesia Commodity Derivatives Exchange (ICDX) Group as stipulated in the Decree of the Head of CoFTRA No.1/CoFTRA/SC-SCPO/10/2023, issued on October 9th, 2023. In his statement, Didid admitted that around 18 CPO companies are set to trade in the ICDX.
To optimize CPO trading on the futures exchange, ICDX will also conduct outreach and training regarding trading mechanisms on the CPO exchange devoted to the large, medium, and small-scale palm oil plantation owners on October 16, 2023.
“ICDX has confirmed that it has received approval as the Physical Organizer of Crude Palm Oil exchange from CoFTRA. We expect the CPO exchange will fully operate by October 23, 2023, to carry out price discovery and be able to realize price reference in the initial quarter (Q1) of 2024.” Didid conveyed.
