24/11/2011 (Reuters) - The Indonesia Commodity & Derivative Exchange (ICDX) will launch a physical tin contract and palm olein contract in early 2012, its chief executive officer said on Wednesday.

Material for the physical tin contract will be supplied by members of the Indonesia Tin Association, including the world's largest integrated miner, PT Timah, ICDX's Megain Widjaja told Reuters.

"We will be doing a Bangka Belitung tin market," said Widjaja, adding that there would be an official announcement in mid-December.

"This will be a collaboration together with the association and the exchange. We will give an exact date about when the contract will go live, on December 15," he said, adding that a tin futures contract was likely to follow later in 2012.

Earlier this month, a group of tin smelters on Bangka island, the main tin producing region in Indonesia, agreed to set up pricing contracts in competition with the London Metal Exchange.

At the time, metals analysts were sceptical that an Indonesian tin contract could rival the benchmark London contract or attract liquidity.

Indonesian smelters began a tin ingot export ban on Oct. 1 in an effort to boost prices, which they would like to see above $23,000 a tonne.

There are 39 tin smelters approved by the Indonesian trade ministry to export refined tin. Exports totaled 92,487 tonnes last year and 99,287 tonnes in 2009, trade ministry data showed.

Tin traded at $20,800 a tonne on the London Metal Exchange at 0459 GMT. The metal, mainly used in solders for electronics, touched a record high above $33,000 a tonne in April.

Besides being the world's top refined tin exporter, Indonesia is also the top palm oil producer.

Indonesia has an export tax system that aims to boost downstream industries, secure domestic supplies and reduce volatility in cooking oil prices.

Earlier this year, Southeast Asia's biggest economy changed the structure of its palm export taxes, raising the structure for crude palm oil shipments and cutting refined product (olein) taxes in an attempt to boost its downstream industries.

"We will be launching an olein contract," said Widjaja, adding that an announcement would be made at next week's annual Indonesian palm oil conference in Bali. "It will go live early next year as well."

Earlier this year, the ICDX launched two gold contracts, which followed its launch of Indonesia's second palm oil futures contract in May 2010.