Editor’s Note
- The domino effect of commodity trading and Indonesia’s new ambitions
- Coal price rises due to global energy panic
- One-stop shop policy for exports and efforts to tackle fraudulent practices
- The shock effect of Indonesia on the global CPO market
- Long-standing systemic problems
- Indonesia’s ambition to become a global price setter
The domino effect of commodity trading and Indonesia’s new ambitions
The world is currently facing significant tensions in the energy sector and global trade.
Amidst the international panic over the energy crisis, Indonesia has taken bold steps by drastically reforming its commodity trading system.
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This combination of the global crisis and national policy changes has caused shockwaves in the international market.
This phenomenon is clearly visible in the movements of two of Indonesia’s key commodities in the third week of May 2026: coal and crude palm oil (CPO).
Notably, the two moved in very different directions. Coal prices rose and stabilized around 137.55 dollars per ton, while prices for palm oil (CPO) fluctuated significantly around 4,486 ringgit per ton.
Coal prices rise due to global energy panic
The rise in coal prices was caused by growing global concern regarding the energy crisis. Several key factors contributed to this.
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First, the disruption of LNG supplies from Iran due to geopolitical tensions in the region caused many East Asian countries to seek alternative energy sources.
South Korea even increased coal imports by 40 percent, while Japan also increased its purchases.
Second, a major mining accident in Shanxi, China, threatened the country’s domestic coal supply. This situation caused further tightness in the global market, while demand was high.
Due to this combination of factors, the price of Australian Newcastle coal remained high. This situation indicates that the world is grappling with an “energy hunger” and that coal, despite the ongoing challenges of the energy transition, is once again becoming a strategic commodity.
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One-stop shop system for exports and efforts to eliminate fraudulent practices
Amidst tense global market conditions, the Indonesian government has introduced a surprising policy in the form of a one-stop shop system for exports through the state-owned company PT Danantara.
Although the government stated that old contracts would be honored, the entire trading system would be reviewed. This measure was taken in response to the practice of under-invoicing, which is harmful to the country.
Under-invoicing is the practice of manipulating export prices by declaring goods at a lower value than the actual price in order to reduce tax obligations. The government discovered indications of significant losses due to this practice.
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An example of this was a ship that departed from Indonesia with goods valued at $2.6 million, but upon arrival at the destination, the value was altered to $4.2 million. This major difference highlights the potential loss of state revenue that is occurring.
Therefore, the government has begun taking more aggressive measures to tighten surveillance and control of export routes for strategic goods.
Indonesia’s shock effect on the global CPO market
This policy change immediately caused unrest in the global palm oil market. Initially, the market reacted positively, due to fears that Indonesian CPO deliveries would be disrupted, leading to a price increase.
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However, this situation was short-lived. International buyers panicked due to the uncertainty surrounding the new mechanism. They worried about the fate of ongoing contracts and feared becoming bogged down in a more complex export bureaucracy.
Some buyers attempted to shift their deliveries to Malaysia. However, this also encountered problems. Malaysian palm oil exports fell significantly in May, while the strengthening of the ringgit made Malaysian palm oil more expensive on the global market.
As a result, international buyers found themselves in a difficult position. Indonesia, as the largest producer, changed the rules of the game, while other alternatives could not optimally meet market demand.
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Long-standing systemic problems
According to observers in the palm oil industry, the core of the problem lies not only in the behavior of unscrupulous exporters, but also in the weakness of the customs surveillance system, which has persisted for years.
The government’s new policy is seen as an attempt to address these systemic weaknesses. With more centralized oversight, the government hopes to reduce leaks in state revenues and make the commodity trade system more transparent.
Indonesia’s ambition to become a global price setter
Behind this controversial policy lies Indonesia’s great ambition: to become a global price setter for palm oil.
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Until now, global palm oil prices have been largely influenced by Malaysia and international exchanges such as Rotterdam, despite the fact that Indonesia is the world’s largest palm oil producer.
By centralizing export controls, Indonesia hopes to gain a stronger bargaining position and directly influence global prices.
If successful, this step will transform Indonesia from a mere market follower into a major player that determines the direction of world trade.
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Conclusion
The transformation of the Indonesian commodity trade is currently attracting global attention. On the one hand, the government’s steps to improve trade systems and strengthen Indonesia’s position on the global market are considered bold. On the other hand, there is concern that the new bureaucracy could actually undermine the confidence of international buyers.
The global market is now waiting for one crucial question: can Indonesia actually achieve this ambitious goal, or does it risk losing market share due to the uncertainty surrounding new regulations? ***tok
