Futures exchange will be open to all commodities: Official

Futures exchange will be open to all commodities: Official

JAKARTA (JP): Trading activities in the planned futures
commodity exchange will not only be limited to coffee and palm
oil, a senior official said yesterday.

Arifin Lumban Gaol, the chairman of the country's commodity
exchange, said that the futures exchange, which is expected to
start operating next year, would be open to all commodities.

"There will be no restrictions. Indeed the futures exchange
will be more active if the trading is not limited to certain
commodities," he said.

However he said that to date only the Indonesian Coffee
Exporters Association (AICE) and the Indonesian Edible Oil
Association Federation (FAMNI) had pledged full support for the
futures trading plan.

Arifin said the two associations were the pioneers of the
bourse as other commodities producers were not yet ready to sell
their produce there.

But many observers fear that the market will be dominated by
members of the two associations which produce coffee and palm
oil.

Arifin said the Commodity Trading Board (Bapebti) had started
to set up a legal structure for the implementation of the futures
exchange act, which was passed by the House of Representative in
December 1996.

The legal structure is expected to be completed within a year
or two, he said.

The establishment of the regulations and the legal structure
of the institution would be followed by the establishment of the
futures commodity exchange, which would be managed by a private
company.

Bapebti, which at present operates a conventional commodity
exchange, is likely to act as the futures exchange supervisory
board when the exchange is fully operational.

The supervisory board will be under the auspices of the
Ministry of Industry and Trade.

Daily trading will be operated by bourse management and
commodities clearing house PT Kliring and PT Jaminan Bursa
Komoditi, and commodity traders and brokers will work under the
two institutions with commodity buyers.

FAMNI's vice chairman, Tarmidzi Rangkuti, said that at least
40 members of FAMNI and AICE had agreed to join the bourse.

"We are expecting other commodities producers to sell their
produce there. But we realize it will take time because a lot of
commodities traders do not understand the benefits they can gain
from the bourse," he said.

He added that the bourse would not attract a market if it only
traded two commodities. (gis)