Indonesia aims to launch palm oil benchmark price by June - trade minister

Trucks with palm oil fresh fruit bunches are parked in a queue at a palm oil factory in Siak regency, Riau province, Indonesia, April 26, 2022. Picture taken with a drone April 26, 2022. REUTERS/Willy Kurniawan

JAKARTA (Reuters) - Indonesia plans to launch a crude palm oil benchmark price by June, the country’s trade minister said on Thursday.

“If possible, before June we will have the palm oil (benchmark price), and no longer have to rely on Kuala Lumpur. We have more palm oil than them, why are we following Malaysia?” Trade Minister Zulkifli Hasan said at a meeting held by the Commodity Futures Trading Authority, a unit under the Trade Ministry.

Most Indonesian palm oil exporters currently conduct sales directly with buyers without going through an exchange, while auctions held by state trading company KPB Nusantara only offer physical palm oil and not futures contracts.

Zulkifli did not elaborate on how the government plans to get traders to use the new price as a benchmark. But he pointed out that Indonesia has been successful in setting reference prices for tin, which it also mandates to be traded on the country’s tin bourses.

Indonesia has two commodity exchanges, the Indonesia Commodity and Derivatives Exchange and Jakarta Futures Exchange.

Zulkifli also hopes Indonesia can launch a crypto asset bourse this year.

Reporting by Bernadette Christina; Editing by Fransiska Nangoy and Kanupriya Kapoor