Pepper Commodity to Enter Physical Market at Jakarta Futures Exchange
2/16/2024
The Indonesian Futures Clearing and Guarantee Agency (PT Kliring Berjangka Indonesia, KBI) is advancing the trade of pepper commodities through a strategic collaboration with the Jakarta Futures Exchange and PT Wahana Inspirindo Sejahtera. This partnership aims to address several critical issues in the pepper market, including price stability and maximizing the commodity’s value.
Fajar Wibhiyadi, President Director of PT Kliring Berjangka Indonesia, highlighted the importance of this move for Indonesia, which is the world’s second-largest pepper producer. “As a major pepper producer, Indonesia requires strategic measures from stakeholders to not only stabilize prices but also to enhance the value of our pepper commodities,” Wibhiyadi stated.
According to data from Statistics Indonesia (BPS), pepper production in Indonesia has shown steady growth from 2015 to 2019. In 2015, production was 81,501 tons, increasing by 5.93% to 86,334 tons in 2016. Production continued to rise to 87,991 tons in 2017, a 1.92% increase. In 2018, the growth rate slowed to 0.82%, reaching 88,719 tons. Projections for 2019 estimate production at 89,617 tons, reflecting a 1.07% increase from the previous year.
Despite this growth in production, pepper prices have been on a downward trend. Data from the Directorate General of Estates reveals that the average monthly price for white pepper in 2016 was IDR 143,867 per kilogram, while black pepper was IDR 121,000 per kilogram. By 2017, these prices had sharply declined, with white pepper averaging IDR 85,349 and black pepper at IDR 59,500 per kilogram.
The collaboration with the Jakarta Futures Exchange and PT Wahana Inspirindo Sejahtera is expected to provide a strategic solution to these classic issues faced by farmers and pepper commodity owners, particularly concerning price and value. This agreement, formalized on November 22, 2019, in Pangkal Pinang, was witnessed by Donny Raymond, Director of the Jakarta Futures Exchange, and Dede Iswanto, Director of PT Wahana Inspirindo Sejahtera, alongside Himawan Purwadi, Head of the Commodity Auction Market Strengthening and Supervision Division at Bappebti.
Under this partnership, pepper will be traded in the form of physical commodities on the Jakarta Futures Exchange. PT KBI will act as the clearing and transaction guaranteeing institution. This means that the trade of pepper will shift from a direct farmer-to-collector model to a structured physical market at the Exchange.
PT Wahana Inspirindo Sejahtera will provide facilities and infrastructure for the pepper commodity, specifically for Muntok White Pepper (WMP). Additionally, PT KBI will encourage farmers and pepper owners to utilize the Warehouse Receipt System (WRS).
Data from PT KBI indicates that from 2017 to October 2019, the total value of warehouse receipts issued for pepper was IDR 566 million, out of a total of IDR 114.6 billion in receipts issued. “The current volume of warehouse receipts is relatively small, especially considering the significant production capacity of Muntok White Pepper,” Wibhiyadi noted.
He expressed optimism that the introduction of Muntok White Pepper into the physical market at the Jakarta Futures Exchange would add value not only for farmers but also for the national economy.
