"We want the domestic futures exchanges to stand on an equal footing with foreign futures exchanges and serve as a benchmark for business agents to set their commodity prices," Chief of the Market Development Bureau of the Commodity Futures Trade Supervisory Board (Bappebti) of the Trade Ministry, Sahudi, said here on Monday.
Indonesia is the largest producer of tin, gold, palm oil, spices, coffee, rubber and other potential export commodities. However, the country does not have a source of price information that can serve as a reference for its commodities, he said.
"Almost all commodity prices in Indonesia come from foreign (commodity) exchange. Hence, to make Indonesia a reference for global commodity prices, it must have an exchange that may serve as a reference for global commodity prices. The presence of the domestic futures exchange will economically benefit commodity businessmen engaged in commodity futures trade," he said.
In an effort to create better futures trade transactions, particularly to improve quality, added value and prices, the futures exchange should develop products traded at the futures exchanges and one of them is the tin physical market, he said.
In 2013, the Trade Ministry launched export-oriented pure tin ingot trade at the futures exchange in accordance with the Trade Minister's Regulation No. 32/M-DAG/PER/2013.
"Right now, pure tin ingot trade is only conducted at one futures exchange, namely the Indonesian Derivative Commodity Exchange (BKD). In 2019, the Jakarta Futures Exchange (BBJ) filed an application to Bappebti and met qualifications to operate a physical market for pure tin ingots with the Indonesia Futures Clearing as a clearing institution," he said.
As such, tin businessmen have many options to conduct transactions at the exchange they want. Consequently, there will be sound competition for conducting pure tin ingot trade in the tin physical market at the futures exchange, he said.