Plans for commodities futures exchange continue
Plans for commodities futures exchange continue
JAKARTA (JP): The government is going ahead with its plan to
establish a commodities futures exchange next year despite the
deepening economic crisis.
Arifin Lumban Gaol, the chairman of the Indonesian Commodities
Exchange Agency (Bapebti), said the government was currently
preparing a legal infrastructure for the exchange.
"The futures trading is expected to be realized before 2000.
The deliberation (of its legal structure) is currently in process
at the state secretariat," Arifin said.
Arifin said the planned commodities exchange would be managed
by a private entity and operate under the 1997 futures exchange
law.
"Everything will depend on the private sector, which wants to
run the futures trading exchange. The government would only
supervise it," he was quoted by Antara as saying.
Bapebti, which at present operates a conventional commodities
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 exchange management and
commodities clearing houses PT Kliring and PT Jaminan Bursa
Komoditi, and commodities traders and brokers will work under the
two institutions with commodity buyers.
Arifin had said that trading activities in the planned
commodities futures exchange would be open to all commodities.
He said four Indonesian commodities had the potential to be
traded on the futures exchange: coffee, crude palm oil, rubber
and cocoa.
The government has planned to establish a futures exchange for
some time but postponed it several times due to its controversy.
Arifin said it was high time Indonesia had its own commodities
futures market to improve economic efficiency and competitiveness
amid free trade.
He said futures trading was a worldwide trend in finance and
trade which Indonesia should not avoid if it wanted to stay open
to globalization.
He said Indonesia should not worry too much about the risks
involved in futures trading because strict law enforcement and
control of the market could prevent such harmful practices.
Commodities futures contracts are used as marketing tools for
producers and investors to anticipate losses caused by price
fluctuations. (gis)