A government plan to centralize key commodity exports through a state-owned enterprise (SOE) in a bid to increase state revenue carries execution risks, businesses warn, raising concerns over trade arrangements and buyer confidence. “For coal, this is not a simple shift. There are existing contracts, permits, documentation, shipping schedules and legal responsibilities already in place,” Indonesian Coal Mining Association (APBI) executive director Gita Mahyarani told The Jakarta Post on Thursday.

Coal exports involve multiple players across the supply chain, from producers, transportation and sales permit holders to traders, overseas buyers, banks, surveyors, shippers, ports and regulators, she said, adding that businesses are seeking clarity on the newly established SOE’s role in the export chain and how transactions would be handled.

President Prabowo Subianto announced on Wednesday that exports of certain commodities would be channeled through a single SOE to tighten oversight and prevent state revenue losses from fraudulent export practices.

The government has established PT Danantara Sumberdaya Indonesia (DSI) under state asset fund Danantara to take over export contracts, shipments and payments as a full-fledged trading entity starting next year.

A trial period beginning on June 1 will initially cover coal, ferro-alloys and crude palm oil (CPO), commodities in which Southeast Asia’s largest economy is a top global exporter.

Indonesian Iron and Steel Industry Association (IISIA) executive director Harry Warganegara told the Post on Thursday that businesses need certainty over the policy’s scope, including the HS codes of affected products and details on how ongoing contracts would transition without adding significant costs or export delays.

Indonesian Palm Oil Association (Gapki) chairman Eddy Martono warned that established trade ​relationships with overseas buyers could ​be at risk if export flows were centralized without careful management. Exporters vary widely in business models; not all operate downstream facilities or serve large-volume markets, he told the Post on Thursday.

Indonesian Employers Association (Apindo) chairwoman Shinta Kamdani said regulatory clarity was key to ensuring the policy did not disrupt exports, add layers of bureaucracy or undermine pricing transparency and trade efficiency.

“In global commodity trade, reliability, timely delivery and operational flexibility are key to maintaining market trust in Indonesia as a global supplier,” she said.

Experts said the new policy signals a deeper shift toward tighter state control over trade and, if mishandled, could undermine the very goals it seeks to achieve, as the government wants to plug tax leakages and stabilize the plunging rupiah.

Center for Indonesian Policy Studies (CIPS) senior researcher Andree Surianta said in a statement on Thursday that the export centralization plan may not address the root causes of under-invoicing, arguing the problem lay in poor customs data, weak transparency and law enforcement.

The policy also risked weakening the private sector and crowding out businesses that underpin the country’s economy, he added, noting that the private sector accounted for around 60 percent of gross domestic product, 90 percent of investment and the lion’s share of employment.

“At a time of monetary and fiscal pressures, the government needs to respond accurately to problems and avoid rash policies,” Andree said, urging the government to use the state budget and SOEs to strengthen private sector competitiveness, preserve purchasing power and attract investment.

University of Indonesia (UI) international trade expert Ruth Elisabeth said the policy could be viewed as form of export control or disguised export restriction if DSI were given exclusive powers, raising the risk of challenges at the World Trade Organization if implementation were deemed inconsistent with WTO rules on export restrictions or state trading enterprises, which require transparency and nondiscrimination.

“If there are disruptions to approvals, pricing, export allocations, documentation or shipments, this could directly disrupt global supply chains and push up international commodity prices,” she told the Post on Thursday.

She added that rushed implementation could trigger legal disputes, arbitration claims and deter investment, urging the government to allow sufficient transition time, protect contracts and clearly communicate pricing mechanisms while preventing monopolistic practices.

S&P Global Ratings warned the plan carried execution risks and could hurt the country’s credit profile if poorly implemented, citing the short three-month transition period and the risk of trade disruptions.

The ratings agency said businesses were already grappling with supply chain disruptions from the Middle East conflict and frequent policy changes, warning the new export regime could weigh on shipments, government revenue and the balance of payments.

“The measure may hurt business confidence and investor sentiment if policymaking is seen as less predictable, potentially slowing investment, triggering capital outflows and potentially affecting economic growth,” S&P wrote on Thursday.

The announcement already rattled markets, with the Indonesia Stock Exchange (IDX) Composite index plunging 3.54 percent to 6,094.94 on Thursday.

In response to the selloff, Danantara chief investment officer Pandu Sjahrir said on Thursday that exporters and buyers were seeking certainty over the new system, pledging the government would honor contracts and avoid disrupting trade flows.

“Existing contracts will continue and be honored. We do not want to disrupt anything with respect to current contracts. We want everything to run smoothly,” he said.

Danantara CEO Rosan Roeslani said pricing would be “evaluated” and “aligned with” global market indices, but contracts would be subject to review if prices fall below market levels.

National Economic Council (DEN) chairman Luhut Pandjaitan flew to Singapore to meet global investors as the government seeks to reassure markets, saying concerns centered on the weak rupiah, market volatility and capital outflows amid geopolitical tensions.

“I’m sorry some of you [are being] negatively impacted by the situation, but we have to watch carefully after July. […] Our state budget is expected to improve next year,” Luhut said in a video posted on his Instagram account on Thursday.