THE WHAT? Indonesia plans to centralise exports of key commodities including palm oil, thermal coal and nickel through a new state-owned enterprise that would act as the country’s sole exporter.
THE DETAILS President Prabowo Subianto announced that producers would be required to sell commodities such as palm oil, coal and selected ferroalloys to a government-appointed export agency, which would then negotiate directly with overseas buyers. The phased rollout is set to begin from June 1. The government said the move is intended to reduce export fraud and under-invoicing, which it claims cost the country US$900 billion between 1991 and 2024. The announcement immediately impacted commodity markets, with palm oil and nickel prices rising on supply concerns, while shares in some commodity producers declined. Industry groups warned the changes could disrupt smaller trading businesses and affect export volumes if not implemented effectively.
THE WHY? The policy reflects Indonesia’s broader strategy to strengthen state control over natural resources, increase domestic value capture and boost government revenue amid fiscal pressures, while reshaping global supply chains dependent on Indonesian commodities.
Source: The Financial Times
