Below is a list with tagged columns and company profiles.

Today's Headlines Commodities

  • GDP Growth Indonesia Update: What about Economic Growth in Q3-2014?

    Economic growth in Indonesia is expected to continue to slow in the third quarter of 2014 according to the country’s central bank. Bank Indonesia Deputy Governor Perry Warjiyo said on Thursday (30/10) that the institution believes gross domestic product (GDP) growth of Southeast Asia’s largest economy to reach 5.1 percent year-on-year (y/y) in Q3-2014, similar to the GDP growth result in the previous quarter (5.12 percent, y/y). Main reason for this slowing pace is the sluggish global economy and particularly the case of China.

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  • Cocoa Update: Global Price, Harvests in Ivory Coast & Ghana, and Ebola

    Contrary to most other (agricultural) commodities, the global price of cocoa has increased in the second half of 2014. While prices of commodities such as oil, soybeans, corn and wheat have eased due to robust global supply, and others - such as cotton - have eased amid lower global demand, the price of cocoa has been rising steadily. Despite a weak start in 2014, the cocoa price has grown over 10 percent (after having rallied around 25 percent in 2013). Main reason for this performance is the world’s rising cocoa demand.

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  • Amid Sluggish Global Economy Value of Indonesian Exports Revised Down

    With China’s economic growth slowing to 7.3 percent year-on-year (y/y) in the third quarter of 2014, Indonesian exports will be affected as China is one of Indonesia’s most important trading partners. Prior to the release of China’s Q3-2014 GDP growth result, the outgoing government of Indonesia had already trimmed its export target for 2014 as global commodity prices have still not picked up. In fact prices of palm oil, coal, rubber, copper and iron ore have fallen in the first three quarters of 2014 according to Indonesian government data.

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  • Crude Palm Oil (CPO) Exports from Indonesia Sluggish on Weak Demand

    Exports of crude palm oil (CPO) and CPO derived products from Indonesia in the first nine months of 2014 only reached 15 million tons, down 1.75 percent from the same period last year. The main cause for this disappointing performance is slowing economic growth in China and India resulting in reduced palm oil demand from these two giant economies. As a result of weak global demand, the CPO price has fallen to an average price of USD $712 per ton in September 2014, down 5.4 percent from the previous month.

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  • Malaysia Extends Zero Palm Oil Export Tariff, Indonesia May Follow Suit

    Malaysia announced that it has extended its zero export tariff for crude palm oil (CPO) until the end of the year in an attempt to boost sales. Malaysian Plantation Industries and Commodities Minister Douglas Uggah Embas said that this decision is aimed at preventing a further drastic fall in CPO prices. Palm oil futures declined by about 18 percent in 2014 amid an oversupply in combination with weak global demand. Indonesia and Malaysia are the world’s top palm oil producers and exporters.

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  • Rice in Indonesia: Irrigation, Sawah Size & Seeds Need Improvement

    Often the lack of quality and quantity of infrastructure in Indonesia has been cited as a reason for limited economic growth. Lack of adequate infrastructure causes the country's logistics costs to rise steeply, thus reducing competitiveness and attractiveness of the investment climate. Also in the country’s natural resources sector Indonesia’s infrastructure problems hamper development. For instance, the lack of quality irrigation to supply ample quantities of water to rice basins causes rice production to be far from optimal.

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  • Similar to Malaysia, Indonesia May Cut Export Tax for Crude Palm Oil

    Speculation emerged that Indonesia will scrap its export tariff for crude palm oil (CPO) in an attempt to boost sales. Three weeks ago, Malaysia had already scrapped the export tax for CPO for a period of two months to support exports and reverse a decline in CPO prices. Malaysian palm oil exports then immediately surged over 30 percent (month-to-month) in the first half of September, indicating the success of the export tax policy. Thus, the two countries - the world’s two largest producers and exporters of CPO - may become involved in a ‘tax war’.

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  • Crude Palm Oil (CPO) Update Indonesia: Production Up, Price Down

    Indonesian stockpiles of crude palm oil (CPO) in August 2014 may have reached the highest level in 15 months on increased production and reduced global demand. According to data compiled by Bloomberg, CPO stockpiles in Indonesia surged 24 percent to 2.5 million metric tons in August (from 2.02 million metric tons in the previous month). Meanwhile, Indonesian CPO production grew 19 percent to 2.55 million metric tons, while CPO exports declined 2.2 percent to 1.8 million metric tons. Bloomberg used data from five planters and one refiner.

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  • Heavy Equipment Market in Indonesia Burdened by Low Commodity Prices

    The production of heavy equipment in Indonesia in the first half of 2014 fell by 25 percent (year-on-year) to 2,292 units. The decline in production is due to the still weak state of the mining and construction sectors in Southeast Asia’s largest economy. Main reasons being the implementation of the mineral ore export ban in January 2014 and low commodity prices, for example coal. Limited construction projects have been undertaken in the first half of 2014 as investors wanted to wait for the results of Indonesia’s legislative and presidential elections first.

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  • World Bank Indonesia Economic Quarterly: Structural Reforms Needed

    The World Bank revised down its forecast for economic growth in Indonesia for the year 2014. In the July 2014 edition of the Indonesia Economic Quarterly, the institution projects economic growth in Southeast Asia’s largest economy at 5.2 percent, slightly down from its previous forecast of 5.3 percent. The downgrade is the result of a weaker outlook for commodity prices and tighter credit conditions. Moreover, the growing fiscal deficit contributes to the challenges that will be faced by the new government (which will be inaugurated in October 2014).

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Latest Columns Commodities

  • Mining in Indonesia: Concern about High Non-Performing Loan Ratio

    The non-performing loan (NPL) ratio in Indonesia's mining and excavation sector has risen drastically over the past year. Moreover, there seems few room for an improvement of the NPL ratio in this sector on the short term because mining and excavation companies are expected to remain amid tough conditions in the remainder of the year. The NPL ratio is a key indicator for measuring bad loans.

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  • Protectionism in Indonesia: Falling Role of Commodities in the Economy

    An interesting story was released on Bloomberg Markets Asia on Wednesday (29/03) about the sliding role of commodities in the Indonesian economy and the need for Southeast Asia's largest economy to find a new growth engine (or better: several new growth engines) that will take the country to economic growth levels of +7 percent year-on-year (y/y) as once pledged by Indonesian President Joko Widodo during his presidential campaign in 2014.

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  • 2009 Mining Law: Indonesia to Stick with Mineral Ore Export Ban?

    It remains unclear whether Indonesia will revise the export ban that is stipulated by the 2009 Mining Law (Law No. 4/2009 on Mineral and Coal Mining) and is supposed to come into effect on 12 January 2017. The 2009 Mining Law stipulates a ban on the export of unprocessed and semi-processed ores from Indonesia. The regulation aims to boost development of the nation's smelting capacity, hence becoming an exporter of materials that are positioned higher up in the value chain while curbing Indonesia's current dependence on exports of raw materials.

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  • Vale Indonesia: Tough Times as Long as Nickel Prices Remain Low

    Vale Indonesia, Indonesia's largest nickel producer, is one of those mining companies that has been plagued by low commodity prices. Various securities companies have cut their recommendation for the purchase of Vale Indonesia's shares due to persistently low nickel prices. Net profit of Vale Indonesia is expected to decline by 50 percent (y/y) to USD $26 million in 2016 as the company's average nickel sales price is expected to fall 29.5 percent (y/y) to USD $6,848 per ton this year.

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  • International Monetary Fund (IMF) Sees Indonesia's GDP Growth at 4.9%

    The International Monetary Fund (IMF) expects Indonesia's economy to expand 4.9 percent year-on-year (y/y) in 2016, slightly up from a 4.8 percentage point (y/y) growth of gross domestic product (GDP) in 2015. On Tuesday (15/03) Luis Breuer, IMF Mission Chief for Indonesia, said the Washington-based lender projects limited growth (+0.1 percent) of Indonesia's private consumption this year. Regarding growth of investment and government spending in 2016, the IMF holds a more positive view. On the same day, the World Bank cut its forecast for Indonesia's 2016 GDP growth by 0.2 percent to 5.1 percent.

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  • Investing in Indonesia's Crude Palm Oil Industry - Introduction

    Although the palm oil industry of Indonesia is resented by many for the negative impact it has on mother nature (for example the seasonal forest fires that occur on parts of Sumatra and Kalimantan), it also constitutes a vital industry: across the globe crude palm oil (CPO) is used for the production of a wide variety of products from food, cooking oil to cosmetics or biodiesel. Indonesia is the world's largest producer and exporter of CPO. This column is the first installment in a series, written by Senior Consultant William Yang, that discusses Indonesia's palm oil industry, particularly the different business models, the risks, and how to invest safely in this industry.

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  • Flip-Flop in Indonesian Politics: Reviewing the Mineral Ore Export Ban

    The government of Indonesia is yet to find a middle way between encouraging the development of processing facilities for the country's mining output and the relaxation of mineral ore exports. Based on Law No. 4/2009 on Mineral and Coal Mining (New Mining Law), exports of mineral ore should have been fully banned in 2014. However, due to the lack of domestic smelting capacity a last-minute regulation was signed in early January 2014 by former Indonesian President Susilo Bambang Yudhoyono that softened this ban.

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