JFX to trade coal contracts next year<\/p>\n
Zakki P. Hakim, Jakarta<\/p>\n
The Jakarta Futures Exchange (JFX) plans to start trading coal
\ncontracts sometime in the first half of next year, according to a
\nsenior official of the exchange.<\/p>\n
JFX director J.W. Sudomo told reporters on Monday that the
\nexchange was still discussing the plan with the Indonesian Coal
\nMining Association (APBI), the Indonesian Cement Association
\n(ASI), state power company PT PLN, and other key buyers.<\/p>\n
He said that the realization of the plan required strong
\n"commitment" from both producers and buyers.<\/p>\n
Currently, players in the local coal market use coal prices
\nannounced by the New York Mercantile Exchange (NYMEX) as a
\nreference in pricing the commodity.<\/p>\n
But Sudomo said that coal contracts trade on NYMEX was not
\nrelatively liquid. He said that a liquid trade would be more
\nbeneficial for both producers and buyers of the commodity.<\/p>\n
JFX opened its operation in 1999, trading contracts of olein,
\nrobusta coffee, crude palm oil and gold. However, currently, only
\nolein and gold are traded, while the other two are temporarily
\nsuspended due to weak market response. The exchange is currently
\nimproving the contract specification for robusta coffee and crude
\npalm oil to lure interest.<\/p>\n
Presidential Decree No. 119\/2001 stipulates that commodities
\ndesignated as subjects of futures contracts are coffee, palm oil,
\nrubber, cocoa, soybean, pepper, fish, shrimps, peanut, fuel,
\nnatural gas, sugar, clove, plywood, pulp and paper, yarn, tin,
\ncoal, gold, fertilizer, cement and electricity.<\/p>\n
JFX division head of business development and promotion Andam
\nDewi said, however, it would be difficult for now to trade all of
\nthe commodities stipulated in the decree because of government
\nintervention in the pricing of some of the commodities.<\/p>\n
"How could people trade the contracts if the government has
\nthe final say in deciding commodity prices or if certain state
\ncompanies monopolize some commodities," she said.<\/p>\n
According to Business Monitor International, national coal
\nproduction in 2004 is estimated at around 119.7 million tons, up
\nfrom 109.3 tons in 2003 and 103 million tons in 2002.<\/p>\n
Seventy percent of Indonesia's coal production goes to the
\nexport market.<\/p>\n
Reports said domestic demand for coal has been increasing.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/jfx-to-trade-coal-contracts-next-year-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }