Overview
- President Prabowo announced that future sales of palm oil, thermal coal and certain ferroalloys must be routed through a government-selected state enterprise to be overseen by the Danantara sovereign fund.
- The new exporter, reported as Danantara Sumberdaya Indonesia (DSI), will act as the sole state-appointed channel for overseas sales while the government says it verifies pricing and export proceeds.
- Officials set a short transition period and related measures, and Senior Economic Minister Airlangga said exporters must hold 100% of export earnings in state banks starting June 1 as part of the change.
- Markets reacted sharply to the announcement with Indonesia’s main index and commodity-linked stocks falling and analysts and industry groups warning of squeezed trader margins, contract disruption and risks of monopolistic rent-seeking.
- Indonesia is the world’s top exporter of palm oil and a leading coal and nickel producer so this shift could reshape global supply chains and will test whether the policy increases state revenue without creating new governance or trade distortions.