• Coffee Production in Indonesia to Improve in Coming Harvest Season

    Indonesia’s coffee production may hit a record high in the 2015-2016 harvest season according to a Bloomberg survey. The survey suggests that Indonesian coffee output is to rise 18 percent (y/y) to 650,000 metric tons from 550,000 tons in the previous season. Reason for a good coffee harvest is favorable weather (rain) having boosted yields. Indonesia is the world’s third-largest producer and exporter of robusta. Also in other parts of the world coffee production is estimated to increase, hence potentially placing pressure on prices.

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  • Indonesia Opens Room for Bauxite Export, Nickel Ore to Follow?

    Indonesian miners may be allowed to resume bauxite exports after a government official signalled that the Indonesian government is looking at relaxing its (raw) mineral export ban. This ban, implemented in January 2014, was introduced in an effort to boost domestic processing capacity, generate more revenue (by adding value to its mineral products) and enhance employment opportunities in Southeast Asia’s largest economy. However, amid the lack of domestic smelting capacity, the export ban has led to a plunge of exports.

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  • Indonesian Currency Update: Stronger Rupiah, Weaker US Dollar

    Indonesia’s rupiah exchange rate started the week on a firm tone as the US dollar weakened amid uncertainty over the timing of higher US interest rates. Contrary to initial expectation, the latest Federal Reserve meeting (held on 17-18 March) did not indicate that there will be a quick interest rate hike in the world’s largest economy hence boosting appetite for emerging market assets. In addition, the Indonesian government and central bank (Bank Indonesia) pledged to safeguard rupiah stability.

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  • Palm Oil Indonesia: Government to Change CPO Export Policy

    The government of Indonesia plans to adjust its crude palm oil (CPO) export tax policy. Chief Economics Minister Sofyan Djalil said that the government is about to impose a fixed levy of USD $50 per metric ton on CPO exports when CPO prices decline below the government’s threshold of USD $750 per ton, implying that it will become impossible for Indonesian palm oil exporters to ship output without charge. Currently, palm oil exporters can export CPO output duty-free as prices have been below the USD $750 threshold since September 2014.

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