Recent volatility in global commodity market manifests the important role of commodity exchanges for developing countries. For commodity exporting countries, development commodity exchange can facilitate the process of price discovery and improve the functioning of markets for food and agriculture commodities. At the same time, volatility in international market and relatively under-developed domestic commodity markets pose potentially high risk for market participants. Hence, enhancing capacity for institutions which serve commodity markets will increase welfare of market participants. This is especially important to commodity exporting countries including Indonesia that have interests in sustaining export revenues from commodities.

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