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View all search resultsCommodity exporters face rising credit risk under centralized policy, Fitch warns
The government's plan to task newly formed DSI with managing strategic commodity exports could spell increased credit risk for producers, though more robust or diversified companies are likely to better weather the policy shift, says a June 12 report from Fitch Ratings.
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Heavy equipment operate on March 4, 2011, at the Binungan coal mine belonging to PT Berau Coal in Berau regency, East Kalimantan. (JP/Indra Harsaputra)
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ocal commodity exporters are facing heightened credit risk as new regulations mandate single-door export arrangements through state-owned PT Danantara Sumberdaya Indonesia (DSI), a subsidiary of state asset fund Danantara, according to a Fitch Ratings report published on Friday.
The new rules could erode issuers’ pricing flexibility and control over export proceeds, the global credit rating agency stated, though the impact was likely to be more manageable for companies with robust balance sheets or diversified operations.
The policy’s details remain uncertain, however, while its implementation approach and design would affect the credit profiles of mining and plantation businesses.
Read also: Export SOE won’t take over commodity shipments, Danantara says
According to an article dated June 11 in The Straits Times, the government is scaling back centralized exports of strategic commodities coal, crude palm oil (CPO) and ferroalloys, a move that had alarmed buyers and exporters over potential market disruption.
Danantara COO Dony Oskaria indirectly confirmed the policy shift on June 10, framing DSI's role as a monitoring body rather than an export consolidator.
Dony’s remarks marked a sharp pivot from President Prabowo Subianto’s address at the House of Representatives plenary session on May 20. In his speech, the President announced that strategic commodities exports would eventually be conducted through a single state-owned enterprise (SOE) after September.
