Regarding car sales in the ASEAN region, Indonesia still trails behind Thailand according to recent data from the ASEAN Automotive Federation (AAF). In the first two months of 2013, Thailand's car sales increased 51.9 percent (YoY) to 255,727 car units, while Indonesia's car sales only increased 22.7 percentage points to 199,974 vehicles. Thailand controls about 43.5 percent of the ASEAN region's sales market. Indonesia comes in on second place with 34.0 percent market share.

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The International Monetary Fund (IMF) has upgraded its forecast for this year's economic growth in the ASEAN-5 countries (which comprises Indonesia, the Philippines, Malaysia, Thailand and Vietnam) from an initial 5.5 percent to 6.0 percent. Next year, however, the IMF revised down its forecast for the region from 5.7 percent to 5.5 percent. In 2012, ASEAN-5 had experienced 6.1 percent of economic growth, up from 4.5 percent the previous year.

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BW Plantation (BWPT), a mid-sized crude palm oil (CPO) and palm kernels (PK) producer, felt the impact of weak global demand for commodities in 2012. The company's net profit in 2012 fell 18.17 percent to IDR 262.18 billion (US $26.89 million). Profit per share fell to IDR 64,83 from IDR 79,35 per share last year. The decline in profit was particularly caused by an increase in operating expenses from IDR 131.05 billion (US $13.44 million) to IDR 153.87 billion (US $15.78 million).

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Exports of Indonesian palm oil may drop to 1.51 million metric tonnes (MT) in February, a 5.6 percent decline from January. Importers prefer to buy the commodity in Malaysia where the government has put in place a duty free tariff on its palm oil exports in order to reduce large stockpiles. Indonesia, on the other hand, has a nine percent export duty as the government tries to gain more revenue out of its natural resources.

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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.

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Earlier this week, the central banks of Indonesia (Bank Indonesia), Malaysia (Bank Negara Malaysia), Thailand (Bank of Thailand) jointly announced the launch of the local currency settlement framework. This framework aims at boosting the use of local currencies in transactions (specifically related to trade and investment) conducted between Indonesia, Malaysia and Thailand in an effort to reduce these countries' dependence on the US dollar.

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Indonesia's Industry Ministry selected the industrial estate in Berau (East Kalimantan) as the center for the downstream palm oil industry in Kalimantan. Furthermore, Panggah Susanto, the Industry Ministry's Director General for Agriculture industry, said the government proposes to select Berau as one of the palm oil centers within the Palm Oil Green Economic Zone (POGEZ) scheme. Berau is chosen to replace Bontang because the former has 3,400 hectares of (clear and clean) industrial land available, while land in Bontang still falls under "protected forest" status.

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The crude palm oil (CPO) price touched its highest level so far this year. On Tuesday (20/09) palm oil futures (December delivery) - traded on the Kuala Lumpur exchange - ended the day at 2,690 ringgit (approx. USD $651 per metric ton). Palm oil prices are rising as CPO production in Indonesia and Malaysia will remain subdued this year due to droughts that were brought by the El Nino weather phenomenon earlier in 2016, while there is expectation of a rather wet season later this year due to the La Nina weather phenomenon.

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The stock exchanges of Indonesia and Malaysia agreed to join hands to develop a World Sharia Stock Market Center. Both sides signed a memorandum of understanding (MoU) on Tuesday (02/08) at the 12th World Islamic Economic Forum (WIEF) in Jakarta. Both exchanges - the Indonesia Stock Exchange (IDX) and the Bursa Malaysia - are eager to establish a global benchmark for Islamic capital markets. This is part of an effort to broaden the usage and availability of Islamic liquidity and products worldwide.

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Crude palm oil (CPO) production in Indonesia and Malaysia is expected to decline due to the impact of the El Nino weather phenomenon (that brought a prolonged dry season to Southeast Asia). CPO production in Malaysia could fall between 1.5 and 2 million tons this year according to Dorab Mistry, Director at Godrej International. Declining output in the world's two leading palm oil producers and exporters implies that palm oil prices should be able to rise further. At the start of this week palm oil futures traded in Kuala Lumpur (June delivery) rose to 2,779 ringgit (approx. USD $695) per ton, the highest level since March 2014.

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Indonesia and Malaysia, the world's leading crude palm oil (CPO) producers and exporters, will cooperate for the development of a special economic zone on Indonesian territory to boost the palm oil industry's downstream industry. Private companies will be given incentives to invest in this zone and develop industries to process CPO into olein, a key ingredient for the production of cosmetics and margarine. Furthermore, both countries plan to establish the Council of Palm Oil Producer Countries.

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Crude palm oil (CPO) output in Indonesia, the world’s largest CPO producer and exporter, may decline by 20 percent to 27.5 million tons in 2016 due to the negative impact of the El Nino weather phenomenon. On a positive note, declining CPO output in Indonesia could provide some support for benchmark Malaysian palm prices that fell to a 6.5-year low of 1,836 ringgit last week.

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The total number of foreign tourist arrivals to Indonesia in 2014 was 9.44 million, up 7.19 percent from the preceding year, meaning that the government target of welcoming 9.3 million foreign tourists last year was achieved. As usual, most foreign tourists entered Indonesia through the Ngurah Rai International Airport in Bali, the most famous tourist destination in the world’s largest archipelago. During the whole year of 2014 a total of 3.71 million foreigners spent some time on Bali.

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Bank Indonesia (the central bank of Indonesia) and the Financial Services Authority (OJK) signed an agreement (the ASEAN Banking Integration Framework, abbreviated ABIF) with Malaysia’s central bank to support banking integration in the ASEAN region. The website of Bank Indonesia states that ABIF “provides an operating framework for ASEAN member states to implement principles and the integration process in the banking sector to support the ASEAN Economic Community (AEC) [which is to be implemented later this year]”.

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