Businesses and economists are warning that the government’s planned one-gate export system could disrupt trade flows for the country’s major commodity sectors, despite official assurances that the policy will improve transparency and oversight.
President Prabowo Subianto has decided to centralize exports of strategic commodities under a single state-controlled entity, the newly established Danantara Sumberdaya Indonesia (DSI). The policy will initially cover palm oil, coal, and ferroalloys.
Under the transition phase scheduled to begin next week, exporters will only be required to report sales to DSI. By early 2027, the agency — led by Australian businessman Luke Thomas Mahony — is expected to gradually assume control over the entire export chain, including payments and shipping arrangements.
The announcement has surprised industry players, particularly in the palm oil sector, where Indonesia accounts for roughly 60% of global supply. Palm oil farmers’ association POPSI said the existing supply chain was already excessively long, with smallholders bearing the brunt of declining prices for fresh fruit bunches (FFBs), the raw material used in palm oil production.
“DSI’s presence will only lengthen the supply chain and increase pressure on FFB prices,” POPSI chairman Mansuetus Darto said.
Darto argued that DSI should focus on regulation and oversight rather than becoming the sole controller of exports. He instead proposed a digital monitoring platform that would allow the government to combat under-invoicing without adding layers of bureaucracy.
Farmers are also concerned about the government’s proposal to release payments only after international transactions are completed, while simultaneously requiring exporters to keep their foreign-exchange earnings onshore for at least one year. Industry groups warn that the policy could squeeze working capital and delay payments to farmers.
Rumor-Based Policy?
The Indonesian Coal Suppliers Association (Aspebindo) said the private sector had received little information about the policy’s technical details. Aspebindo chairman Anggawira criticized the government’s justification for the initiative, particularly claims that under-invoicing practices had cost the country $908 billion over the past three decades.
“If such practices exist, they should first be proven. These figures sound excessively bombastic,” Anggawira said.
“Companies that have operated properly should be invited to discuss the best possible format. Until now, we still have no clear information about the technical implementation.”
University of Indonesia economist Rizki Nauli Siregar said policymakers risked targeting the wrong problem.
“If the issue is under-invoicing, then address under-invoicing directly. If the issue is transfer pricing, then we should understand why companies resort to transfer pricing,” she said. “We are asking exporters to run, but then shooting them in the leg.”
Rizki questioned whether DSI could realistically replace the international trade networks that exporters had spent years building. She noted that Indonesian exporters face significantly higher overseas selling costs than competitors in neighboring Malaysia.
According to Rizki, the cost of exporting Indonesian palm oil can reach 36% of export value, compared with around 6% in Malaysia.
“The key question now is whether the current DSI model can continue supporting business dynamism,” she said.
Inevitable Cost
Senior economist Aviliani urged the government to focus enforcement efforts only on companies proven to have engaged in under-invoicing, rather than imposing sweeping measures across entire industries.
Disruptions to major export commodities could weaken Indonesia’s foreign-exchange earnings, she warned, particularly as the country lacks alternative sectors capable of generating export revenues on a similar scale.
“If everything has to go through a single channel, additional costs will inevitably emerge,” Aviliani said.
Coal and palm oil have been among the main drivers of Indonesia’s exports, helping the country maintain a trade surplus for 71 consecutive months since May 2020.
Official data showed coal exports fell nearly 12% year-on-year to $5.5 billion in the first quarter of 2026, while palm oil exports reached $9.6 billion during the same period, according to industry association Gapki.
Despite the approaching trial period, key details of the policy remain unresolved.
Deputy Agriculture Minister Sudaryono said DSI would not charge transaction fees or seek profits from export activities. However, Danantara chief investment officer Pandu Sjahrir later said discussions were still ongoing regarding how the agency would generate revenue, while noting that investment funds “typically pursue profit.”
Danantara has pledged to honor existing long-term contracts.
“At the beginning, DSI will act as a business agent. Its role will gradually expand as we strengthen the capabilities of its human capital,” Pandu said, adding that the agency planned to recruit expatriate professionals for the export body.
“The idea of centralizing exports into a single function is not unique. It has worked elsewhere. The challenge lies in the execution, not the concept itself.”
