Indonesia Establishes State-Owned Enterprise to Take Over Core Commodity Exports, Potentially Impacting Global Supply Chains

According to foreign media reports, Indonesian President Prabowo Subianto recently announced new trade regulations to parliament, stating that by September 2026, the country's export operations for coal, palm oil, and ferroalloys will be entirely handled by the newly established state-owned enterprise, PT Danantara Sumberdaya Indonesia. This SOE was registered one day before the policy announcement, with 99% of its shares held by Danantara, the sovereign wealth fund Indonesia established last year, aiming to strengthen the government's pricing power over commodities.

President Prabowo disclosed to parliament that prior underreporting of sales by exporters to evade fees and taxes has caused Indonesia losses of approximately $90.8 billion. The core objective of this policy is to strengthen oversight, combat practices such as under-invoicing, transfer pricing, and the diversion of export revenue, while increasing tax revenue to replenish government reserves depleted by the impact of the energy crisis triggered by the war.

A transition period from June to August will allow private enterprises to gradually transfer import and export transactions to the aforementioned SOE, with all foreign transactions to be managed by it starting in September. Indonesia's Coordinating Minister for Economic Affairs mentioned that detailed rules will be communicated to all stakeholders before June 1, with the initial focus being on improving declaration transparency. Personnel from Indonesia's Ministry of Foreign Affairs stated that this measure is part of governance reform, intended to manage strategic commodity trade in an orderly and responsible manner, thereby enhancing industry credibility.

It is reported that Indonesia is the world's largest exporter of thermal coal and palm oil, possessing the world's largest proven nickel reserves. These commodities are widely used in energy supply, consumer goods production, power batteries, stainless steel manufacturing, and other sectors, with exports reaching many major global economies.

As Indonesia's largest trading partner and a primary source of foreign investment, China is the most directly affected by this policy adjustment. Chinese enterprises are major investors in several Indonesian industries, including critical minerals, and the bulk commodities exported by Indonesia support the stability of supply chains for China's electric vehicles, batteries, and industrial manufacturing. Researchers in related fields have mentioned that the rapid implementation pace of this policy may affect China's access to resources for its clean energy industry. Previously, the Indonesian Chinese Chamber of Commerce submitted a five-page letter of protest, citing issues such as overly strict regulation, excessive enforcement, and even departmental corruption and extortion locally, which have severely disrupted normal business operations and undermined long-term investment confidence.

The United States and the European Union are also major importers of Indonesian palm oil, coal, and nickel, while countries like India, Japan, South Korea, and Southeast Asian nations such as Malaysia, Vietnam, and the Philippines will also be impacted by the policy. Personnel from a local Indonesian research institution mentioned that this policy adjustment may create space for investments from other countries, such as the United States, to enter Indonesia. Existing industry contracts dominated by Chinese capital may face revisions, potentially further intensifying global resource competition. Other researchers have noted that whether the policy can attract new foreign investment depends on the transparency of its implementation process.

Some trade analysts are skeptical about the government's ability to smoothly take over the entire industry's trade within less than four months. Personnel from the Indonesian Palm Oil Association mentioned that the policy's impact on small-scale trade, special product exports, and downstream industries is not yet clear. Most exporters already have established market partnerships, and mismanagement must be avoided to prevent customer loss.