Exports up but key products down

Tony Hotland, The Jakarta Post/Jakarta

Indonesia's export performance remained positive in August thanks to the rising prices of oil and commodities, the Central Statistics Agency (BPS) reported on Friday.

But a closer look at the BPS data suggests the current surge in oil prices has begun to take a toll on some of the country's main non-oil and gas export products, particularly to the key U.S. market.

Analysts have said the U.S. economy could be hurt by rising oil prices, which in turn would reduce its imports from developing countries like Indonesia.

The BPS said that exports in August reached US$5.91 billion, a 4.15 percent increase from the previous month and a 17.66 percent rise from the same month last year.

Non-oil and gas exports rose by 3.42 percent to $4.60 billion month-on-month, with ores, slags, and metal ashes recording the largest jump, reaching a combined value of $209.2 million from $92.1 million in July.

Oil and gas exports were up by 6.79 percent to $1.31 billion. The increase in oil and gas exports was attributed to soaring global oil prices, which rose to $42.61 per barrel from $37.1 per barrel in July. However, export volume declined by 10.26 percent.

Exports in the January-August period totaled $43.09 billion, a 5.75 percent increase from the same period last year.

But the agency's data also revealed that some non-oil and gas export products like wood and wood-based products, rubber and rubber-based products, non-knitted clothing, and machinery/mechanical appliances suffered a drop in export value, by 77.7 percent, 69.7 percent, 46.1 percent and 35 percent, respectively.

The BPS also reported that exports to the U.S. market dropped by 63.1 percent in August to $710 million, although it remained Indonesia's second largest export market after Japan. The other major destinations were Singapore and China.

Oil prices have surged by about 55 percent this year. There are fears that the high oil prices, recently reaching a record level of more than $50 per barrel, will undermine exports from Asia's manufacturers to developed nations, as companies cut back on their investments and consumers stop impulse purchases amid threats of an economic slowdown.

Boosting export performance is crucial for Indonesia to push economic growth higher than the average 4 percent posted during the past few years. This year, the government expects the economy to expand by 4.8 percent, and by about 5.5 percent next year on improvements in exports and robust domestic consumption.

Meanwhile, imports jumped by 49 percent in August to $4.02 billion from $2.70 billion in the same month last year, but were down 2.2 percent from $4.11 billion in July.

The country's trade surplus increased slightly to $1.89 billion during the month from $1.57 billion in July, but dropped sharply from $2.66 billion in August last year.