Foreign Media Suddenly Spotlight Indonesia's Strategy to Control Nickel and Palm Oil Prices
Foreign media have once again highlighted Indonesia’s move to establish a national commodity exchange, targeted to begin operations on 1 January 2027. The exchange is expected to strengthen Indonesia’s influence over price formation for strategic commodities such as nickel, palm oil, and coal.
Channel News Asia (CNA), in an article titled ‘Indonesia wants more sway over commodity prices—here’s how its new exchange can win over market’, assessed that the success of the Indonesia Commodity Exchange (Icomex) will depend heavily on its ability to build a credible price benchmark while convincing producers and traders to transact on it.
“Prices formed on the exchange will become a reference for many institutions such as customs and tax offices,” the outlet reported, quoting local economist from Paramadina University, Wijayanto Samirin, published on Monday (31/8/2026).
The plan was announced by President Prabowo Subianto in his 2027 State Budget speech to parliament on 14 August. Prabowo argued that for decades Indonesia has been one of the world’s largest producers of various important commodities, yet the prices of commodities derived from Indonesia’s natural wealth are still often determined on commodity exchanges in other countries.
Indonesia currently holds the world’s largest nickel reserves and is one of the largest exporters of thermal coal and palm oil. However, CNA noted that the average nickel price fell sharply from US$21,474 (around Rp380 million) per tonne in 2023 to US$15,349 (Rp272 million) per tonne in 2025.
The government subsequently cut its nickel ore production target from 379 million tonnes in 2025 to around 250 million tonnes this year. The policy briefly pushed nickel prices to US$19,350 (around Rp343 million) per tonne in April, before falling back to around US$17,000 (Rp301 million) in August.
The outlet also provided analysis from Institute for Development of Economics and Finance (INDEF) researcher Tauhid Ahmad, who said the commodity exchange must be able to build liquidity and market confidence.
“To gain market confidence, the exchange must prove that the prices it forms are credible and supported by reliable, transparent processes with good governance,” he said.
CNA assessed that another challenge comes from commodity exchanges that have already become global references. The London Metal Exchange (LME), for example, has long been the main benchmark for industrial metals such as aluminium, copper, and nickel, while Bursa Malaysia Derivatives is an important reference for the global palm oil industry.
Meanwhile, citing Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono, Indonesia also needs to make Icomex attractive to businesses. He said most palm oil companies still prefer to transact directly with buyers because of membership, trading, and clearing costs on exchanges.
“Prices are actually already quite transparent,” Eddy said, referring to direct transactions that generally reference Bursa Malaysia Derivatives spot prices.
Meanwhile, another economist cited by the outlet said that mandatory use of the exchange could potentially create legal problems. Bhima Yudhistira, for example, warned that long-term contracts with foreign buyers might need to be amended if transactions through Icomex were made compulsory.
“There are many legal risks because contracts would have to be amended due to the obligation to use the exchange,” he said.
For this reason, several analysts suggested that Icomex should not immediately pursue a large scale. Wijayanto assessed that the exchange should start with a few commodities to test the trading, clearing, settlement, cost systems, and their impact on existing contracts.
“This needs to be implemented gradually. There must be a trial,” he said.