RI futures exchange legally well prepared
JAKARTA (JP): Preparations to put the country's long-awaited commodities futures exchange into operation are nearing completion as the necessary legal infrastructure has been put in place.
Arifin Lumban Gaol, chairman of the Indonesian Commodities Exchange Agency (Bapebti), said here on Wednesday that President B.J. Habibie had issued Government Regulation No. 9/1999, which sets the operational guidelines for the exchange, as mandated by law No. 32/1997.
"All the hard work has been completed. One more small step is needed to make the commodities futures exchange operational," he said at a seminar on the futures exchange, held by the Faculty of Law at the University of Indonesia.
Arifin said Habibie would issue a presidential decree to legalize the transition of Bapebti's role from an operating body to a supervisory body.
Bapebti is to act as the futures exchange supervisory board when the exchange is fully operational. The supervisory board will be under the management of the Ministry of Industry and Trade.
Arifin said the commodities futures exchange would begin to operate, at the latest, in the first quarter of 2000.
He said the exchange will be operated by a private management company, PT Bursa Perdagangan Berjangka Komoditi, to be established by about 40 companies mainly within the Association of Indonesian Coffee Exporters and the Federation of Indonesian Vegetable Oil and Fat Associations.
"Each of the participating companies in PT Bursa Perdagangan Berjangka Komoditi has to inject Rp 250 million (US$28,700) cash into the company," Arifin said.
This management company, when established, has responsibilities including the educating of traders and brokers, installment of the exchange's computer system and providing the commodities exchange building.
In its daily operations, the management company is supported by 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 mentioned that the most urgent commodities to be traded in Indonesia would be coffee and palm oil because of the severe price fluctuations of the products.
Presidential decree No. 12/1999 states that palm oil and coffee can be traded in the exchange.
Other commodities that may be traded in the bourse in the future, Arifin said, include plywood, pulp and paper, cacao, coal, pepper, gold, shrimp, fish, corn, peanuts, soybeans, rice, sugar, cement and fertilizer.
When operational, Arifin said, farmers could use the bourse to protect themselves from price fluctuations. They could sign a contract to sell their crop at a certain date in the future at a pre-arranged price, and thus, if the price drops before that date, the loss is assumed by the investor.
"The exchange can also serve as a commodities price reference," he added. (02)