Indonesia to Launch Commodity Exchange, Prabowo Vows to Set Own Prices

Indonesian President Prabowo Subianto has announced plans to establish a new commodity exchange by January 1, 2027, aimed at developing reference prices for the nation's key export commodities. The announcement was made during his speech on the 2027 budget proposal, reinforcing his administration's push to leverage the country's vast natural resources for greater economic benefit.

Prabowo was emphatic about Indonesia's pricing authority, stating that if international buyers are unwilling to accept the prices set by the new exchange, they should not purchase the commodities. He suggested it would be better to keep resources like nickel, tin, and gold in the ground for future generations rather than sell them at prices dictated by others.

The president stressed that Indonesia should not remain a country where commodities are extracted while prices and profits are determined elsewhere. "We do not merely want to be a global producer of commodities; we must become a price-setter," he said.

Rules for the new bourse are expected to be introduced by September 17, according to Friderica Widyasari Dewi, the chief of Indonesia's Financial Services Authority, which will oversee the exchange.

The announcement follows a period of market uncertainty triggered by Prabowo's earlier plan to centralise exports of palm oil, coal, and ferroalloy under a new state export firm, Danantara Sumberdaya Indonesia (DSI). The government has sought to reassure investors that DSI will monitor shipments but will not take control of exports.

Prabowo said DSI has identified a potential $5 billion in export proceeds from discrepancies between reported and actual prices. In its first two months, the firm monitored over 6,500 transactions for the three key commodities, overseeing $14 billion in exports. This monitoring is set to expand to cover 50 ports and eventually all strategic commodity exports.

Analysts have noted the importance of ensuring that tighter oversight does not increase transaction costs for exporters or discourage private investment. A Singapore-based metals trader expressed scepticism, suggesting the market may not use the new bourse unless specific export rules are associated with it.

Indonesia already operates a palm oil bourse launched in 2023, though trading volumes remain light, and global price benchmarks are still dominated by Bursa Malaysia Derivatives. The country also has exchanges for tin products.

In his address, Prabowo acknowledged challenges faced during his term but said these were being addressed. He expressed confidence that investment is still growing and that economic growth could reach 6% by the end of the year.