Indonesia’s Icomex faces liquidity test in bid to shape global commodity prices

Indonesia seeks stronger pricing influence

Indonesia plans to establish the Mineral and Strategic Commodities Exchange, known as BMKS or Indonesia Commodity Exchange (Icomex), with operations targeted to begin on 1 January. The initiative forms part of President Prabowo Subianto’s effort to strengthen oversight of strategic commodity trading, alongside the consolidation of exports through PT Danantara Sumber Daya Indonesia.

The government wants the exchange to support an Indonesian Reference Price for commodities including nickel, palm oil and coal. Although Indonesia is one of the world’s largest producers of these materials, several domestic commodity prices continue to follow benchmarks formed on foreign exchanges. A domestic reference could also provide a valuation basis for tax and customs authorities.

Infrastructure alone will not make that reference internationally relevant. Sardjito, the selected head of the Financial Services Authority’s BMKS supervisory division, told a parliamentary fit-and-proper hearing on 24 August that the exchange must be trusted from its first transaction, even if it is not large on its opening day.

Palm oil illustrates the participation problem

Indonesia’s existing palm oil market shows the difficulty of moving established bilateral trade onto an exchange. CNA reported that only about 50 of the country’s roughly 2,000 palm oil companies were registered with the Indonesia Commodity and Derivatives Exchange. CPO transactions through the exchange reached only around Rp 2.69 trillion in 2025, compared with total exports valued at Rp 511 trillion.

Some companies regard bilateral transactions as cheaper and more practical because exchange trading adds membership, transaction and clearing costs. GAPKI chairman Eddy Martono said not every CPO producer is an exporter, while some production lots are too small to export economically. Direct business-to-business deals can also provide advance payment, including payment of up to 100% before delivery for spot transactions.

Eddy argued that Indonesia already influences global palm oil prices through its position as both the largest producer and the largest consumer. The biodiesel mandate increases domestic palm oil demand and affects global supply. Prices nevertheless remain linked to worldwide supply and demand across competing vegetable oils. He warned that forcing every CPO transaction through an exchange could depress domestic CPO prices and ultimately the price of fresh fruit bunches received by farmers.

Liquidity will determine international acceptance

INDEF economist Eko Listiyanto told Katadata that having a national reference price does not make a country a global benchmark provider. International traders must use that price in actual transactions. Icomex therefore needs a broad participant base, including companies from outside Indonesia, as well as credible institutions, transparent trading and practices aligned with international standards.

Eko said transaction mandates could help generate initial activity, but institutional safeguards should come first and the exchange must consider the needs of buyers and sellers. Progress during Icomex’s first five years should be judged by transaction targets, liquidity and the diversity of participating countries. Mirae Asset Sekuritas senior analyst Nafan Aji Gusta similarly described the Indonesian Reference Price as a possible first step, rather than an automatic route to global price-setting power. For producers, processors and traders, the decisive test will be whether Icomex offers enough volume and confidence to support contracts, hedging and commodity valuations.