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)