Indonesia Reassures Markets After Move to Control Palm Oil and Coal Exports

Indonesia is moving to reassure traders and producers after a surprise plan to tighten control over exports of key commodities such as palm oil and coal. Pandu Sjahrir, chief investment officer of the country’s sovereign wealth fund Danantara, said on Friday that the government is “listening very closely to the market” as it sets up the new export body, in comments reported by Bloomberg.

The remarks come after President Prabowo Subianto stunned commodity markets this week with an announcement that future sales of selected natural resources would be routed through a state-appointed enterprise. The proposal initially covered crude palm oil, coal and ferrous alloys, and traders said it raised immediate questions about how existing contracts would be handled, whether exporters would face delays, and how much control the state would have over pricing and sales.

According to earlier reporting by ICIS, the government plans to create a state-owned entity called PT Danantara Sumber Daya Indonesia, or DSI, to regulate exports of selected commodities, with all transactions to be reported to it from June through December 2026. From January 2027, Danantara said export transactions would move onto a digital platform designed to improve efficiency and strengthen oversight of commodity trade. The plan is intended to crack down on under-invoicing, transfer pricing and the outflow of foreign exchange, which Prabowo said have long reduced state revenues.

The policy has drawn close attention because Indonesia is a major global supplier of commodities, especially palm oil and coal. Market participants told Argus Media that the announcement could disrupt supply chains and create uncertainty around the role of traders and the terms of existing sales agreements. The sharp reaction in regional commodity stocks also reflected concern that stronger state intervention could pressure producers’ margins.

Prabowo has framed the move as a way to protect national income. In his parliamentary speech, he said the government wants to stop exporters from declaring artificially low values and to ensure more of the revenue stays in Indonesia. He said the country had lost large sums over decades through under-invoicing, though the exact figures and methods behind that estimate were not immediately clear from the reports.

For now, the government appears to be trying to calm concerns while it works out the details. Sjahrir’s comments suggest officials are aware of the need to avoid disruption in a sector that is central to Indonesia’s economy and export earnings. What happens next will depend on how the new export system is designed, how quickly it is implemented, and whether companies and buyers accept the new rules without major interruptions to trade.