BUSINESS

Indonesia to Put Palm Oil, Coal Exports Under State Control

Published: May. 21, 2026 12:25 a.m. GMT+8

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President Prabowo delivers an economic speech during a plenary session at the parliament building in Jakarta, Indonesia, on May 20, 2026. Photo: VCG

Indonesian President Prabowo Subianto announced Wednesday that the government will centralize the export of key commodities, including palm oil and coal, through a single state-owned enterprise to seize global pricing power and boost state revenues.

The sweeping trade overhaul highlights Jakarta’s increasingly aggressive resource nationalism as it battles a historic currency slump and mounting fiscal pressures, a strategy that is already triggering intense backlash from major foreign investors.

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Indonesia will centralize exports of palm oil, coal, and ferroalloys via a state agency to control pricing, citing $908 billion in lost tax revenue from under-invoicing.
The move aims to counter a record rupiah slump and fiscal pressures, mandating 100% of export earnings be kept domestically for a year.
The China Chamber of Commerce warns the policy, along with nickel ore price hikes and aggressive audits, undermines investor confidence.

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Who’s Who

Danantara: Danantara is Indonesia’s sovereign wealth fund, mentioned in Bloomberg reports as likely overseeing the new state export management agency centralizing key commodity exports like palm oil and coal under President Prabowo Subianto’s plan.

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What Happened When

October 2024：: Prabowo Subianto takes office as president of Indonesia.

By December 2025：: Prabowo's government collects roughly $380 million in fines and recovered assets from a crackdown on illegal mining and tax evasion.

Early 2026：: The rupiah plunges to a record low of 17,705 against the U.S. dollar; major infrastructure projects are paralyzed due to stringent forestry enforcement; China Chamber of Commerce in Indonesia sends an open letter to the president detailing operational disruptions.

Before Feb 4, 2026：: Indonesia has long been a top global producer of palm oil and nickel but at the mercy of foreign pricing; under-invoicing by exporters over the past 34 years cost the government $908 billion in lost tax revenue (as claimed by Prabowo on Feb 4, 2026).

Feb 4, 2026：: Indonesian President Prabowo Subianto announces centralization of export of key commodities (including palm oil and coal) through a single state-owned enterprise, outlining creation of a state export management agency.

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