Expansion of Commodity Exchange for Plantation Products

The government plans to expand the national commodity exchange for a number of plantation products, one of which is cocoa. This policy is considered to be able to improve the price structure at the farmer level while strengthening the bargaining position of Indonesian plantation commodities in the global market.

“Through the exchange, prices are established transparently and refer to national reference prices. This way, farmers are no longer disadvantaged by bilateral pricing mechanisms that often push prices below market value,” said Gunawan, Assistant Deputy for the Improvement of the Competitiveness of Plantation and Horticultural Products at the Coordinating Ministry for Food (Kemenko Pangan), to Hukumonline.

In addition to expanding the commodity exchange, the government is also preparing a price recovery policy. This policy aims to standardize plantation commodity prices so that farmers can obtain better selling prices. This step is considered important given that transactions for commodities such as cocoa and coffee have been conducted through long distribution chains involving many intermediaries, resulting in very small profit margins for farmers.

Gunawan explained that the integration of plantation commodities into the exchange will also be strengthened by the development of the Warehouse Receipt System (“SRG”) and commodity auction markets as part of a more organized trading ecosystem. “Farmers will receive higher added value,” he added.