Indonesia Tries to Break Malaysia's Grip on Palm Oil Pricing

Indonesia's President Prabowo Subianto has announced plans to create a new exchange for commodities, including palm oil, nickel, and coal. The Strategic Mineral and Commodity Exchange (BMKS) is set to begin operations on January 1.

The move is part of the government's effort to increase its control over export prices and volumes. Prabowo wants Indonesia to be not just a producer of global commodities but also a setter of their prices.

However, analysts say that dominance in physical supply does not automatically translate into pricing power. The industry currently uses Bursa Malaysia's crude palm oil futures contract (FCPO) as its primary reference for pricing and hedging.