Indonesia lines up per-ton service fee for new export agency

What was announced

Luke Mahony, chief executive officer of Danantara Sumberdaya Indonesia, said in Bali at the Indonesian Palm Oil Conference that Indonesia will impose a single digit dollar per ton service charge on shipments covered by the new export agency. He said the precise amount will be unveiled next month and noted the agency is still consulting with industry. He did not specify which commodities the fee would apply to.

Scope and who is in charge

At the start, the agency will oversee roughly $60 billion in exports across coal, palm oil and ferroalloy products. The body is operated by the country's sovereign wealth fund Danantara.

Why it matters

Announced earlier this year, the new agency has added uncertainty to Indonesia's broad natural resources sector. It aims to rein in practices like under invoicing, while also prompting concerns about a bigger state role in exports. After President Prabowo Subianto unveiled it unexpectedly in May, Danantara executives have tried to minimize concerns about the new setup's impact on export flows.

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Timing and next steps

The agency comes into full effect in January. An announcement disclosing how large the service fee is will come next month. For portfolios tied to Indonesian commodities, watch how the final fee and rollout shape shipping costs, pricing power and trade flows across coal, palm oil and ferroalloys.

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