The Indonesia Commodity & Derivative Exchange (ICDX) said on Wednesday it has launched a gold futures contract to create a local benchmark price on the bullion. "We choose to launch a gold contract to meet demand from the market. This will support transactions in the physical market," said Megain Widjaja, ICDX's president director.
"Demand for gold is big in Indonesia because it's a tradition here to have savings in gold. Consumers are familiar with gold prices," Widjaja said. The exchange's gold contract will be traded in rupiah but ICDX will also launch a dollar-based contract, Widjaja said.
The size of the contract will be 100 gram per lot and the point of delivery will be PT Logam Mulia, a precious metal refining unit of state miner PT Aneka Tambang Tbk. Indonesia is one of the main gold consumers in Southeast Asia. The exchange will also launch its crude palm oil futures contract - which is intended to rival the one traded in Malaysia - at the end of April, Widjaja said.
Indonesia wants a local benchmark which it feels would provide a better reflection of local supply and demand, and would eliminate currency risk factors. ICDX, the new commodities and derivatives exchange (ICDX), said it hopes to succeed in creating an Indonesian palm oil futures contract after the rival Jakarta Futures Exchange, known as BBJ, struggled to attract planters to trade CPO.
The industry uses Malaysian palm oil futures and the Europe spot price in Rotterdam as benchmarks. In an interview in February, the exchange said that companies that have already agreed to trade on the new exchange included the local unit of Wilmar International, Sinar Mas Agro Resources Tbk, Sampoerna Agro, Duta Palm, and Palm Mas Asri.
Comments
Comments are closed.