Indonesia wealth fund Danantara's export unit will not take over existing commodity contracts, meeting minutes show

Indonesian sovereign wealth fund Danantara has confirmed it will honor existing commodity export contracts but will review pricing terms to ensure they align with global market benchmarks, according to statements from its chief executive. The fund is preparing to assume control of the country’s top commodity shipments, including palm oil, coal, and ferroalloys, as early as September 1.

Under the new framework, Danantara will assess contracts where pricing is set below world market levels and may renegotiate terms if under-invoicing is detected. A three-month transition period, beginning June 1 and potentially extending to six months, has been established for exporters to report shipment details to Danantara Sumber Daya Indonesia.

The move, announced by President Prabowo Subianto, aims to strengthen government oversight of tax revenues and foreign exchange earnings from commodity exports. However, the policy has raised concerns among industry groups, who have questioned how specifications, long-term contracts, and financing obligations will be managed under the new system.

Indonesia’s commodity exports—primarily palm oil, thermal coal, and nickel—generated $65 billion in revenue last year. While the government seeks to address issues of under-invoicing and transfer pricing, the policy has triggered market volatility, with the Jakarta Composite Index hitting a multi-year low and the rupiah nearing record lows.