Responding to the 2024 Food Security Challenge, PT KBI Participates in Developing the Commodity Trading Ecosystem

15 Aug 2024

Jakarta, August 15, 2024

PT Kliring Berjangka Indonesia (PT KBI), a member of the Danareksa State-Owned Enterprise Holding, is increasingly active in developing the Commodity Trading Ecosystem through synergy with various business actors and transforming the supporting systems it manages. This synergy and transformation are being carried out to address the food security challenges faced by Indonesia. These challenges arise due to various interrelated factors, such as food production productivity, quality, prices, and the well-being of the farmers themselves.

For example, in mid-2024, several commodity-producing regions included in the 11 (eleven) Food Reserves of the Government of the Republic of Indonesia are experiencing a harvest season. Budi Susanto, President Director of PT KBI, stated, "As we know, commodity prices tend to decline during harvest time. However, if farmers can utilize the Warehouse Receipt System and its surrounding ecosystem, they can delay selling while waiting for price movements and obtain financing to produce the next commodity."

As a company engaged in the business of clearing guarantees and settlement of commodity futures trading transactions (PBK), Warehouse Receipt Systems (SRG), and Commodity Auction Markets (PLK), one of the roles played by PT KBI is to serve as the SRG Registration Center (PusReg). Warehouse Receipts (RG) are an essential instrument in commodity trading and national food security. This allows farmers, businesses, and commodity owners to use the goods stored in warehouses as financial collateral or as tradeable commodities. In this regard, PT KBI is supported by its subsidiary, PT Kliring Perdagangan Berjangka Indonesia (PT KPBI), as a partner for non-bank financial institutions, which are ready to improve the welfare of Indonesian farmers.

To ensure the Commodity Trading Ecosystem reaches all farmers in Indonesia, PT KBI and PT KPBI collaborate with several provincial governments to implement the Farmer Corporation program. In 2024, PT KBI has already collaborated with the East Java Provincial Government, the West Sumatra Provincial Government, and industrial areas as efforts to control inflation, promote farmer independence, and strengthen food sovereignty. The Farmer Corporation aims to shift farmers' mindset from being mere producers to becoming entrepreneurs. They not only focus on on-farm processes (during cultivation) but also pay attention to off-farm aspects (after harvest).

Budi added, "We have big dreams for the development of this Commodity Trading Ecosystem. We want to build integration across the three business lines we have, namely SRG, PLK, and PBK. Commodities already stored in RG warehouses can be traded in the auction market, creating price transparency, which ultimately becomes a price reference for the commodity exchange to be used as a trading price benchmark. We also project that the utilization of RG will continue to increase in the future."

This potential exists on both the producer and consumer sides in Indonesia. This is certainly a task for PT KBI and all business actors to continue socializing and educating about the Warehouse Receipt System and its relationship with the Commodity Auction Market. Currently, to support these activities, PT KBI has the IS-Ware NextGen application, which is based on Smart Contract and Blockchain technology, to facilitate farmers in registering their commodities and Tin Market for PLK activities.

With the registration system managed by PT KBI, every registered RG is guaranteed security, authenticity, and easy access for market participants. Regarding RG utilization, PT KBI data shows that in July 2024, RG issuance reached 688, an increase of 154.8% compared to the previous year, which was 270. Compared to the 2023 data, RG issuance rose by 42%. In terms of financing, there was also a 224% increase from 339 billion to 1.1 trillion compared to July 2023, and overall, it rose by 95%.

About PT KBI

PT Kliring Berjangka Indonesia is a member of the Danareksa State-Owned Enterprise Holding, engaged in the business of clearing guarantees and settlement of commodity futures trading transactions, as well as serving as the Registration Center for the Warehouse Receipt System and the Clearing and Settlement of Commodity Auction Market Transactions.

The four services provided by PT KBI are the Derivatives Clearing System (SKD), which supports Commodity Futures Trading, the Customer Transaction Information System (SITNa) to provide customers with information regarding futures transactions, IS-Ware Next Gen, which supports the Warehouse Receipt System, and Tin Market to enhance pure tin bar trading services.

For further information, contact:

Dina Heristin
Corporate Communication
PT Kliring Berjangka Indonesia
Menara Danareksa, 6th floor
Jl. Medan Merdeka No. 14, Central Jakarta. Tel: 021-35280000
www.ptkbi.com