Indonesia is preparing a major overhaul of its commodity export system after announcing plans to centralise shipments of coal, palm oil and ferroalloys through a state-controlled trading entity.
The move, unveiled by Indonesian President Prabowo Subianto during a speech to parliament on Wednesday, marks one of the country’s most significant interventions in commodity trade in recent years.
Under the proposed framework, all exports of strategic natural resources would be routed through a government-selected state enterprise acting as the sole official exporter.
Prabowo said the policy is aimed at stopping long standing financial losses linked to under-invoicing and transfer pricing practices that, according to the government, have significantly reduced Indonesia’s export revenues for decades.
“We have lost enormous value from our own resources,” Prabowo told lawmakers, claiming the country may have forfeited as much as $908 billion over the last 34 years because commodities were allegedly sold below their real market value.
Indonesia currently ranks as the world’s largest exporter of both thermal coal and palm oil, giving the decision major implications for global commodity flows and international buyers.
The future state-controlled trading structure is expected to operate under the supervision of Danantara, Indonesia’s sovereign wealth fund.
Authorities confirmed there will initially be a three month transition period during which exporters can continue operating under existing contracts while the government gradually introduces the new system.
Senior economic minister Airlangga Hartarto said the transition could potentially be extended until the end of the year depending on implementation progress.
He also revealed that Jakarta plans to review additional commodities every three months to determine whether they should eventually be included in the centralised export programme.
Alongside the export reforms, Indonesia will introduce another major financial measure from June 1 requiring all exporters of natural resources to keep 100% of their export earnings inside Indonesian state-owned banks.
The government argues that the new rules are designed to strengthen national financial stability, improve foreign currency reserves and ensure greater control over strategic industries.
Prabowo defended the policy by insisting that many countries already adopt similar measures to protect their economic interests and manage sensitive commodities more directly.
Still, the announcement has already sparked concern across commodity markets, with traders and exporters closely watching how the new framework could affect pricing, trade flows and Indonesia’s role within global supply chains.
