Thai exporters cautious over Indonesia<\/p>\n
BANGKOK (Reuters): Escalating problems in Indonesia, a major
\nimporter of Thai rice and sugar, has unnerved Thai exporters,
\nindustry sources said yesterday.<\/p>\n
Indonesia has so far delayed a relatively small shipment of
\nrice and committed to sugar purchases. But Thai exporters said
\nthey are increasingly worried about Indonesia's political and
\neconomic prospects and the direction of the volatile rupiah
\ncurrency.<\/p>\n
If Jakarta failed to form a currency board to peg the rupiah
\nto a major currency as planned, the Indonesian unit could drop
\nfurther and affect that nation's ability to import, they said.<\/p>\n
The currency has lost up to 76 percent of its value against
\nthe U.S. dollar since last July, the start of the region's
\nfinancial crisis.<\/p>\n
If it introduces a currency board, Indonesia might run into
\ntrouble with the International Monetary Fund (IMF), which has
\nasked Jakarta not to implement the system. The IMF has suggested
\nit might halt the flow of cash agreed under a $43 billion aid
\npackage the fund helped arrange, a move likely to drive the
\ncurrency well below 10,000 to the dollar.<\/p>\n
\"So far, (Indonesia) has committed well to its sugar
\ncontracts. There have been no defaults or cancellations. But we
\njust wonder what would happen if the rupiah continued its
\ndownward trend,\" said one sugar trader.<\/p>\n
Traders said the market was confused by the news that
\nIndonesia was unlikely to import more sugar from Thailand.<\/p>\n
\"We heard a report that they are not going to import more.
\nThat is a bit unclear and worrying,\" said another trader from a
\nmajor European trading house.<\/p>\n
\"Do they mean they are not going to buy more than what they
\nhad made contracts, or they are not going to take any more
\ndeliveries other than what has been executed?\" he said.<\/p>\n
Trade sources believed Indonesia has bought around 700,000
\ntonnes of white sugar from Thailand for this year although a
\nlarge part of the contracts had yet to be executed.<\/p>\n
Thailand delivered about 117,250 tons of white and refined
\nsugar to Indonesia in January. Similar quantities were expected
\nto be shipped in February and March.<\/p>\n
Thai rice traders also complained that recent problems with
\nIndonesia's letters of credit has cut the volume of rice traded
\nbetween the two countries.<\/p>\n
Indonesia recently delayed taking delivery of shipments of
\naround 100,000 tons of rice because of problems with letters of
\ncredit following the country's temporary freeze on foreign debt
\nrepayments.<\/p>\n
\"Indonesia is a big buyer and I hate to say that the situation
\nmade us more cautious,\" said an executive at one major rice
\ntrading firm.<\/p>\n
\"However, I hope the situation will not be too bad as
\nprocuring rice to meet local demand should be on the top of the
\ncountry's priority list,\" he said.<\/p>\n
Industry sources had earlier forecast that Indonesia could
\nimport up to 800,000 tons of Thai rice this year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/thai-exporters-cautious-over-indonesia-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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