Indonesia’s non-oil and gas exports are expected to plunge as much as 30 percent over the next three months, including rubber, palm oil and mining products, as fewer overseas buyers sign long-term contracts, said Toto Dirgantoro, secretary of the Indonesian Exporters Association, or GPEI.
“In the second quarter there will be no significant changes in export performance - a continuation of the poor performance from January to March,” Toto said. “Only a few long-term export contracts have been signed, and commodity prices have yet to recover.”
Aggressive efforts to boost exports by finding additional overseas buyers have made little headway against the significant global slowdown in volume and value, he said.
January non-oil and gas exports fell 17.2 percent to $6.2 billion from a month earlier, according to a recent report by the Central Bureau of Statistics. Shipments then fell another 2.4 percent to $6 billion in February.
Indonesian exporters of crude palm oil have had to deal with price fluctuations, as overseas demand fell from about one million tons per month in early 2008 to between 500,000 and 700,000 tons per month last August.
Palm oil producers attributed the fall in exports to lower demand amid the global economic downturn.
Crude palm oil exporters have encountered environmental setbacks as well. For example, most have found it particularly difficult to obtain certification from the Roundtable on Sustainable Palm Oil, Toto said.
So far, only one local palm oil producer - PT Musim Mas - has received RSPO certification in Indonesia. Some palm oil firms are still awaiting certification, including PT Hindoli, PT Sime Indo Agro and PT Perkebunan Nusantara III.
Rubber producers are also finding it difficult to increase exports, as global demand for synthetic and natural rubber is expected to fall for the rest of the year, due to low auto sales.
The Indonesian Rubber Association, or Gapkindo, said that the government cut rubber exports by 116,000 tons, or 5.8 percent, in the first three months of 2009, as part of an agreement between the world’s three biggest rubber-producing nations to rein in exports.
The International Rubber Study Group has said that global demand for synthetic and natural rubber could fall as much as 9 percent this year, more than double last year’s 4.1 percent fall.