The Indonesian government has postponed plans to introduce a requirement stipulating that commodities sellers must use letters of credit (L/Cs) for transactions worth more than US$1 million.

The world's top exporter of palm oil and rubber now reckons it will introduce the L/C requirement in July 2010.

Recessionary pressures

The L/C requirement had been scheduled to take effect on 1 November 2009, but its implementation has been stalled once again because the measure is considered too draconian in today's economic climate.

A statement from Indonesia's Department of Trade said the L/C requirement should only be implemented "without causing excessive burden to exporters amid a global recession that has not recovered."

Delays

This is the third time the implementation of the L/C requirement has been delayed.

It was first due to be implemented in March but was postponed until April. Indonesia subsequently postponed its launch to November.

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