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Indonesian markets are back open after the week-long Idul Fitri holiday. And, it was not the greatest opening, with Indonesian stocks, bonds, and the rupiah under heavy pressure. Moreover, Indonesian inflation accelerated quite rapidly in April 2022.
A bit later than usual due to the week-long Idul Fitri holiday, our April 2022 report was released on Monday 9 May 2022. In this report Indonesia Investments discusses key economic, political and social developments that occurred in Indonesia in the month of April 2022.
Biodiesel, which is a form of diesel fuel that is derived from plants or animals (in the case of Indonesia it mainly uses fatty acid methyl ether, FAME, which is derived from palm oil), has been on the political agenda of Indonesia since the 1990s when the first (in-depth) research was conducted by a number of state agencies.
Indonesia’s August 2021 trade balance was quite spectacular with the value of the country’s exports totaling USD $21.42 billion, the highest export figure in ten years.
Before we delve into Indonesia’s June 2021 trade statistics, we first take a quick look at Indonesia’s full-year 2020 trade performance as Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS) released its annual ‘Indonesian Foreign Trade Statistics – 2020’ report in the first week of July 2021.
On Wednesday (5.05.2021) Indonesia Investments released the April 2021 edition of its monthly report. In the report we track important developments - from the perspective of politics, the economy and social matters - that were influential (and impacted on the Indonesian economy) last month.
Indonesian President Joko Widodo kept his promise (that he made in April 2016) by signing Presidential Instruction No 8/2018 on the Delay and Evaluation of Permits and Elevated Productivity of Oil Palm Plantations. Through this instruction expansion of oil palm plantations is cut short for the coming three years, while the government also seeks to evaluate and reorganize permits and procedures in this industry.
Andira Agro, an Indonesia-based company that owns, operates, and manages palm oil plantations as well as one crude palm oil mill, is set to make its trading debut on the Indonesia Stock Exchange on Thursday (16/08). The offering price for the company's initial public offering (IPO) is set at IDR 200 per share.
Both Indonesia's Trade Ministry and the Indonesian Coal Mining Association (APBI) confirmed that the mandatory national insurance for coal and crude palm oil (CPO) exports regulation has been postponed by another six months. Thus the regulation is now expected to come into effect per 1 February 2019.
Earlier this week US President Donald Trump announced plans to impose 10 percent import tariffs on USD $200 billion worth of Chinese export products by 30 August 2018, thus further escalating the trade war between the USA and China. While earlier US tariffs focused mostly on industrial goods, the new list of proposed import tariffs includes various commodities (metals, energy and agriculture) as well as consumer products. As a result most commodity prices were in red territory on Wednesday (11/07).
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It is uncertain whether Indonesia can impose the B50 stage of its biodiesel program in 2026 (which would be the next step after launching the B40 stage in Q1-2025). Currently, the B50 stage is still being studied. In fact, government officials are currently discussing whether it is better to opt for a B45 stage first.
This month, our report is completed at a time when Indonesian society is celebrating Idul Fitri, the festivities that mark the end of the holy Ramadan month (the fasting month for Muslims). In fact, the holiday period started on 21 March 2025 for school-children, while society as a whole has an official national holiday from 28 March to 7 April 2025.
Palm oil ranks among the most important agricultural commodities of Indonesia as this country is the world’s biggest producer of palm oil. This implies that Indonesia generates important foreign exchange earnings from palm oil exports and is a source of income for millions of workers on the plantations.
Over the past couple of months we have informed on the shortage of cooking oil on the Indonesian market, the subsequent inflationary pressures this shortage caused, and the policies that were imposed by the government to tackle this shortage. But, we did not devote an entire article to this topic.
Both Indonesia’s export and import performance was quite amazing in March 2022. While we expected imports to rebound ahead of the start of the Ramadan month (on 1 April 2022), a month that typically gives rise to a big increase in consumption, we did underestimate Indonesia’s export performance in last month’s forecast.
Although there is plenty of opposition to – and criticism on – Indonesia for allowing crude palm oil (or CPO) to play a big role in the domestic economy (Indonesia being the world’s largest producer and exporter of CPO), the country is currently feeling the windfall from soaring CPO prices. And, it is contributing to Indonesia’s recovery from the severe – and still ongoing – novel coronavirus (COVID-19) crisis.
Indonesia is the world’s biggest palm oil grower as well as the world’s biggest exporter of crude palm oil (CPO). Traditionally, palm oil exports are ranked among the top three export products of Indonesia (along with coal and natural gas). As such, palm oil is of crucial importance for the Indonesian economy.
It have not been great times for palm oil farmers and traders. Malaysia’s benchmark palm oil price is currently hovering near a three-year low of 1,949 ringgit (approx. USD $464.8) per ton amid high inventories, rising production and sluggish global demand.
Several negative sentiments are putting pressure on the crude palm oil (CPO) price in the first week of March 2018. These sentiments are expected to continue pushing downward pressure on the CPO price in the remainder of this week. On Monday (05/03) the CPO price on the Malaysia Derivatives Exchange (May 2018 shipments) fell 0.28 percent to 2,467 ringgit per metric ton. Compared to one week earlier, the price has now declined 2.91 percent.
In the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia won six out of seven legal challenges. Indonesia had challenged the EU's duties, set in 2013, on biodiesel imports from Indonesia and Argentina. The World Trade Organization (WTO) ruled, largely, in favor of Indonesia.
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