SAFCo issues Singapore's first SAF tender

Indonesia to route key commodity exports via state firm

Indonesia to route key commodity exports via state firm

Singapore, 20 May (Argus) — Indonesian president Prabowo Subianto today announced that the government will require exports of key commodities to be routed through a state-appointed company, in a move that could tighten state control over flows as authorities grapple with fiscal pressures and a weakening currency. The policy will initially target palm oil, coal and ferrous alloys, Prabowo said in a parliament session on 20 May. The market awaits details of the policy, but under the broad plan, export sales would be channelled through a state-owned enterprise (BUMN), which would act as the sole counterparty to overseas buyers. Prabowo said a state-owned enterprise will act as a "marketing facility" which helps the state strengthen monitoring of export transactions and fight against under-reporting the value of exports in the country. The move is also to ensure that exporters do not "run away" from requirements to keep export proceeds in the country for at least one year, he said. Exporters of national resources, except for oil and gas, are required to place 100pc of the foreign currency proceeds into a special deposit account of a national bank for at least 12 months, according to a government regulation imposed in March 2025. Indonesia has lost about $908bn over 1991-2024 because of export under-invoicing, Prabowo said. "This will optimise our tax revenues and government proceeds from sales of key commodities and our natural resources," said Prabowo. "We don't want our exports to be the cheapest because we don't dare to control our own resources." The shift signals a move towards centralised trade management that could help the state capture more foreign exchange earnings and improve revenue collection. But it also risks disrupting established supply chains and complicating trade flows with international buyers. The benchmark Jakarta Composite Index, representing 913 companies spanning from sectors including commodities and energy, extended losses because of the announcement, dropping by as much as 2.4pc before trimming some intra-day losses. The index is down by 27pc from the start of the year. The phased roll-out of the scheme will begin in June and last through August, when exporters will have to gradually shift contracts, transactions and payment flows to BUMN or state-owned enterprises (SOEs), while still handling parts of the export process. The aim of the phased roll-out is to ensure that SOEs gradually take over the international sales of the commodities. The system is set to move to full implementation from September, with the SOEs assuming end-to-end control of transactions. This could include contract negotiation, documentation, shipping co-ordination and receipt of export proceeds, effectively positioning state firms as the primary interface between Indonesian producers and global markets. The Indonesian coal mining association (APBI) did not immediately respond to a request for comment. By Saurabh Chaturvedi and Nadhir Mokhtar Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.