Jakarta commodity bourse will soon trade CPO

Jakarta commodity bourse will soon trade CPO

JAKARTA (JP): The Jakarta Futures Exchange (JFX) will trade
crude palm oil (CPO) beginning next week in a bid to lure more
traders into the newly established futures exchange bourse.

JFX president Hasan Zain Mahmud said the initial trading of
the CPO would be launched on June 20, making it the third
commodity available in the bourse after olein and coffee.

"We're optimistic CPO trade will receive a good response from
the market," he said on the sidelines of a seminar on the
prospect of futures trading in the country.

The former president of the Jakarta Stock Exchange (JSX) said
he was upbeat that the CPO would become a popular commodity in
the exchange given the position of Indonesia as the second
largest CPO producers in the world.

Among its potential traders are CPO plantation companies such
as Sinar Mas Group, Salim Group, Raja Garuda Mas and Astra Argo
Lestari and another 60 smaller companies.

Hasan said that many Indonesian traders carried out CPO
futures trading through the Kuala Lumpur Commodity Exchange
(KLCE) due the lack of facilities at home.

According to him, the transactions made by the Indonesian
traders at the KLCE accounted for more than 30 percent of the
bourse's trading volume.

"Those traders are now facing a limited access to join the
KLCE trading activities due to the country's tight foreign
exchange control," he said.

JFX director Don Rico Menayang said that the bourse expected
CPO trading volume could reach about 300 lots a day or 7,500 tons
next year.

"For this year, we have to be realistic; the people's response
to the JFX is still relatively low," he said.

So far, the bourse total trading volume was still far below
the ideal level of 300 lots a day as many people were still
unfamiliar with the bourse.

However, he said, olein trade showed a promising improvement
lately. The daily trading volume reached as high as 70 lots, far
higher than the average daily trading volume of 20 lots booked
since its operation in December.

Aside from CPO trade, the bourse also plans to trade cocoa and
gold by the end of this year, he said, adding that those two
commodities also have good demands.

He said that the bourse had received the green light to trade
the gold but it still needed a presidential decree to begin the
trading.

The bourse has been licensed to trade olein, coffee, CPO,
cocoa, plywood and pepper. But at present the trading is still
limited to olein and coffee.

Hasan said that the government should also allow the bourse to
trade foreign currencies in order to give additional alternatives
to investors to hedge their financing. (05)