Max: Indonesia and the European Union are set to sign their trade agreement by the end of October, and that signature now anchors how palm, steel and nickel exporters price their 2027 European business.
Anita: Signing targets slip all the time. What makes this one firm enough to price against?
Max: Trade Minister Budi Santoso said in Jakarta on 6 October that both sides aim to sign the Comprehensive Economic Partnership Agreement at the end of the month, most likely in Jakarta, with ratification fast-tracked so it applies from January. The last open item sits in Brussels, which is settling the languages the text must carry. That is a procedural step, not a negotiating one.
Anita: And in parallel the European Commission wants Indonesia out of the Generalised Scheme of Preferences on 1 January 2027. Does that cut against the agreement?
Max: Not for palm. That preference is already suspended for Indonesia through 2028, so every tonne shipped today pays the full European duty. The agreement is pure upside for growers and refiners, and the decision is who captures the duty saving on the day it applies.
Anita: So the money is real, but it does not automatically land with the Indonesian producer. The European buyer can just as easily keep it.
Max: Exactly, and capital is already moving on that view. POSCO International relaunched Sampoerna Agro in Jakarta on 17 June as Prime Agri Resources, adding 128,000 hectares across Sumatra and Kalimantan to the Korean group. That is a bet on European margin before the schedule is even published.
Anita: Which puts the question to the chief executive of a mid-market grower or refiner. What does the contract need to say?
Max: The clause to agree shares the duty reduction from the agreement's first day. It is easiest to win before signature, while the benefit is still a negotiating point and the tariff schedule is still unpublished. Once the schedule is public, the buyer knows the number and the leverage shifts.
Anita: Let me move to steel and aluminium, because there the European cost is already running. Walk me through the carbon border charge.
Max: Europe's carbon border charge has applied to every tonne of Indonesian steel and aluminium landed since 1 January 2026. European importers begin buying the certificates that settle it on 1 February 2027. The charge is calculated on verified plant-level emissions where the importer holds them, and on country default values where it does not.
Anita: And the defaults are the expensive route?
Max: Increasingly so. The mark-up on those defaults doubles to 20 percent in 2027, and the Commission corrected the default tables retroactively in a regulation published on 31 July. The European buyer settles the bill, so the cost lands in the 2027 price round that is under way right now.
Anita: So the plant that hands over verified data effectively hands its buyer a discount, and that should show up in the price it can ask.
Max: That is the commercial logic. The head of sales strengthens every 2027 offer by attaching the verified site-level emissions report for each plant, so each European buyer can file actual values before certificate purchases open on 1 February 2027. The question for the head of sales to answer today is which European buyers already hold our verified data on file.
Anita: The pattern in both cases is the same. Indonesian exporters are sitting on a saving they do not own yet, and the contract decides who owns it. Does mining follow the same shape?
Max: Mining has a different driver, because the buyer is domestic and live. The Ministry of Energy and Mineral Resources confirmed on 21 August that the Karawang cell plant built by Contemporary Amperex Technology and Indonesia Battery Corporation has begun staged operation. It is the downstream end of a chain running from Aneka Tambang's nickel in East Halmahera to cells in West Java, so it is a standing domestic buyer for nickel intermediates.
Anita: And the royalty review hanging over that chain?
Max: Energy Minister Bahlil Lahadalia paused the proposed revision of the mineral royalty regulation on 11 May to rework the formula, and it remains under review. The draft would set the nickel ore royalty between 14 and 19 percent. Bank Indonesia held its benchmark rate at 5.75 percent on 23 September, so the cost of carrying a royalty change stays elevated.
Anita: The royalty sits with the smelter operator. How does it reach a mining services contractor who never pays it directly?
Max: Through the rate card. If the smelter's royalty rises and the services contract has no change-in-law clause, the cost comes down the rate card at renewal. The chief financial officer of a mining services company uses the pause well by running the draft band through every smelter contract and confirming each passes a new royalty to the smelter, before 2027 rate cards are signed.
Anita: So the common thread is that the window to write these savings into contracts closes before the public events that confirm them. The palm clause before signature, the emissions data before the price round settles, the change-in-law clause before rate cards. What is the risk of moving before the agreement is actually signed?
Max: There is one, and the contract handles it. The clause should hold current terms if entry into force slips past 1 January 2027, so the producer gives up nothing if Brussels is slow. That protection costs little to ask for today and a great deal to recover later.
Anita: Then give me the position.
Max: The European agreement is this week's capital story, and the end of October decides who keeps its value. The chief executive of a mid-market palm grower or refiner should treat signature as done for pricing purposes and close 2027 European offtake before 31 October, with a clause that shares the duty saving from the agreement's first day and holds current terms if entry into force moves past 1 January 2027. Contracting before signature keeps the margin the agreement creates inside the business. The question for the chief executive: by 31 October, what share of our 2027 European volume is contracted with the duty saving written in, and is that share 100 percent?