It’s Time For RI To Set Own Benchmark Price of Palm Oil

Jakarta – Trade Minister Zulkifli Hasan (Zulhas) has instructed the Commodity Futures Trading Supervisory Board (Bappebti) to formulate soon Indonesia’s own benchmark price of crude palm oil (CPO). Until now, Indonesia has always referred to the prices in Malaysia despite it is the largest producer of palm oil in the world.

“It’s been several times questioned during cabinet meeting, why we still refer to Malaysia as we’re the world’s largest producer. It’s not good for Bappebti. We have the Bappebti, but why we should refer to Malaysia,” Minister Zulhas said when addressing the work meeting of Bappebti at the office building of the trade ministry in Jakarta on Thursday, 19 January 2023.

Zulhas targeted that the Indonesia’s reference price for CPO can be established in June 2023. That way Indonesia will be able to set the global benchmark price of CPO. “Under the authority of Bappebti, we’re trying to realize it gradually for the palm oil commodity,” he said.

Besides the CPO, Bappebti has been also asked by the minister to set reference prices for coffee and rubber. As of now, Indonesia has only had a benchmark price of tin.

“With its authority, Bappebti should set the benchmark prices of CPO, coffee and rubber. We hope in June this year the CPO’s benchmark price will be realized,” he said.

Indonesia has been known as the largest producer and exporter of palm oil in the world, but it has not yet had its benchmark price of palm oil. Until now, the global palm oil traders and producers, including those in Indonesia, have always referred to the two futures markets in Kuala Lumpur (MDEX), Malaysia and Rotterdam in the Netherlands. (*)