The Commodity Futures Trading Regulatory Agency (Bappebti) has revealed plans for collaboration with Malaysia in the launch of a crude palm oil (CPO) exchange.
Didid Noordiatmoko, the head of Bappebti, stated that they have met with Malaysia’s CPO exchange, MDEX.
“We cannot compete with MDEX. We would not stand a chance, and we would surely lose. So, we will collaborate,” said Didit during a meeting at the Ministry of Trade in Central Jakarta on Sunday, July 30, 2023.
In May 2023, Didit had a meeting with MDEX to discuss the possible forms of collaboration to facilitate the launch of a CPO exchange in Indonesia. He mentioned that MDEX responded positively to this proposal.
Despite being the world’s largest CPO producer, Didit emphasized that Indonesia’s palm oil exchange cannot compete with Malaysia’s MDEX due to its 20-year experience in this field.
Focus on different target market
However, Didit admitted that they are still seeking the appropriate form of collaboration between Indonesia’s CPO exchange and MDEX.
For instance, they may focus on different target markets; while MDEX concentrates on the domestic market, Indonesia’s CPO exchange could target the export market.
These arrangements will be governed by the Minister of Trade Regulation (Permendag) and will be further assessed and detailed through Bappebti Regulation (Perba).
Currently, the harmonization of rules concerning the CPO exchange is being processed by the Ministry of Law and Human Rights.
Indonesian CPO traded in the Netherlands
Previously, Trade Minister Zulkifli Hasan announced that the CPO exchange would be launched soon, following the earlier launch of a cryptocurrency exchange on July 28.
The Ministry of Trade had targeted to establish a CPO exchange for the export of palm oil by June 2023.
However, as of now, Indonesia’s CPO is traded in exchanges in the Netherlands and Malaysia since Indonesia does not have its own exchange.
President Joko Widodo, also known as Jokowi, had recently brushes on this issue. Zulkifli mentioned that Jokowi had sarcastically remarked on Indonesia being the “king of palm oil” but lacking its own CPO exchange. Hence, Zulkifli hopes that the plan for the launch of Indonesia’s CPO exchange can be finalized soon.
