'Two associations may lead futures exchange'
'Two associations may lead futures exchange'
JAKARTA (JP): Analysts fear the coffee and edible oil
associations could dominate the planned futures commodity
exchange at the expense of farmers' cooperatives.
At yesterday's House of Representatives hearing with a special
team the Golkar faction set up, lawyer Dimyati Hartono and trade
consultant Rudy Lengkong said the commodity exchange bill had
loopholes which could allow the bourse to be dominated.
Dimyati said House members should improve the bill's wording
on information dissemination.
"The bill should clearly state that information should be
disseminated fairly and not controlled by certain groups of
business," Dimyati said.
Lengkong said article 11 of the bill should state who could be
an exchange member and the roles of farmers and small producers'
cooperatives.
He asked if the Indonesian Coffee Exporters Association and
Indonesian Edible Oil Association Federation would let farmers
and small producers' cooperatives be members.
"It is the fact that most associations have not yet satisfied
the aspiration of small farmers and their policies often
contradict farmers' wishes. Members of associations have become
prosperous but farmers remain poor," he said.
Lengkong is a former Commodity Exchange Board chairman. The
board is under the Ministry of Industry and Trade.
When presenting the bill to the House Minister of Industry and
Trade Tunky Ariwibowo said although the bill was meant to protect
farmers and small producers from price fluctuations and risk, it
would be hard for them to have direct access to the futures
market because their businesses were too small and their
knowledge too limited.
He hoped Indonesia's futures market would one day be useful to
farmers and their cooperatives, like those in the U.S and Japan.
"Updated information on prices provided by the futures market
helps them decide when to produce and sell their products at a
desired price," he said.
Commodity exchange board chairman Arifin Lumban Gaol said
coffee, crude palm oil rubber and cocoa had potential to be
traded on the exchange.
Indonesian Agriculture Economists Association chairman H.S.
Dillon agreed farmers' businesses were too small to participate
directly in the exchange.
He commended the government's initiative to present the bill
to the House, saying the bill would be the legal basis to
establish the exchange.
A futures commodity exchange would help create more
transparent commodity pricing than the physical commodity market
did, Dillon said.
In futures markets, offers were made openly while in the
physical trading with future deliveries, only buyers and sellers
knew the prices, he said.
Only the Indonesian Coffee Exporters Association and
Indonesian Edible Oil Association Federation fully support the
plan.
The exchange board manages the physical trading of coffee and
natural rubber with deliveries of up to three months. (rid)