{"text":[[{"start":8.6,"text":"Resource-rich Indonesia plans to centralise commodities exports through a state-run agency, in a move set to shake up business in the world’s largest exporter of palm oil, thermal coal and nickel."}],[{"start":20.6,"text":"Jakarta would establish a state-owned enterprise that would be the sole exporter of many commodities produced in the country, President Prabowo Subianto said on Wednesday. "}],[{"start":30.3,"text":"“The sales of all our natural resources, starting with palm oil, coal and ferroalloys, must be through a state-owned enterprise appointed by the Indonesian government as the sole exporter,” Prabowo said in parliament. "}],[{"start":43.55,"text":"The president did not identify which ferroalloys, but it could include some varieties of nickel, a key ingredient for manufacturing stainless steel and electric vehicle batteries. "}],[{"start":53.349999999999994,"text":"The creation of an export agency brings more state control and stricter scrutiny over one of the Indonesian economy’s most critical sectors. It is also likely to disrupt global markets that rely heavily on Indonesia’s commodities, and eat into profits of resource companies operating in the country. "}],[{"start":72.89999999999999,"text":"The benchmark palm oil price traded on the Malaysian exchange rose nearly 2 per cent after the announcement over worries that the export controls could affect supplies. Nickel prices also rose on supply concerns."}],[{"start":85.1,"text":"Under the new rule, commodities producers would have to sell their products to the state-run agency which would then negotiate with overseas buyers, Prabowo said, adding that “the prices of all commodities must be determined in our own country”. "}],[{"start":98.85,"text":"The rule will be implemented in phases from June 1. At present, producers in Indonesia can sell directly to buyers."}],[{"start":106.8,"text":"Prabowo said the measure was necessary to clamp down on alleged export fraud through under-invoicing, which he said had cost the country $900bn between 1991 and 2024."}],[{"start":117.7,"text":"“The key questions now are how prices will be set, how existing contracts will be treated, how much margin the entity will capture, and whether exporters will retain enough commercial flexibility,” said Dedi Dinarto, associate director at strategic advisory firm FGS Global. “If investors see this as part of a wider shift toward discretionary state control, it could weigh on future investment appetite.”"}],[{"start":141.4,"text":"This is not the first time Indonesia has imposed sudden export controls. In 2020, Jakarta banned the export of raw nickel ore to force foreign companies to invest in nickel processing facilities and increase the value of exports by adding value in the country. That move made Indonesia the dominant nickel player in the world. "}],[{"start":160.70000000000002,"text":"However, Eddy Martono, chair of the Indonesian Palm Oil Association, said export volumes could be affected if the new agency is not managed properly."}],[{"start":170.55,"text":"“Trading companies handling small volumes are likely to be more severely affected, with some even facing the potential of closure, which could lead to lay-offs,” he said. "}],[{"start":179.75,"text":"The overhaul comes at a time when businesses and investors are already grappling with increased centralisation under Prabowo and his fiscal and economic policies. Global index provider MSCI’s warning early this year over a potential downgrade to frontier market status has also hit confidence. "}],[{"start":198.25,"text":"The central bank on Wednesday raised interest rates by 50 basis points to 5.25 per cent — its first increase in two years — to stabilise the rupiah, which has been hitting new lows in recent weeks."}],[{"start":211.1,"text":"The new agency is part of government efforts to boost state revenue as macroeconomic and fiscal risks increase because of the war in the Middle East. "}],[{"start":219.65,"text":"Since coming to power in late 2024, Prabowo has focused on expensive populist policies, such as a free meals programme for school children, that have strained the finances of south-east Asia’s largest economy. Higher global oil prices have also weighed as Indonesia heavily subsidises fuel. "}],[{"start":238.15,"text":"The resource sector is already reeling from Prabowo’s drive to seize millions of hectares of land from palm oil and mining companies over environmental violations, though businesses have alleged that the government failed to follow due process. "}],[{"start":258.95,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779270400_5549.mp3"}