Exports up on higher commodity prices

Exports up on higher commodity prices

Adianto P. Simamora, The Jakarta Post, Jakarta

Stronger prices for the country's main agricultural export
commodities helped strengthen Indonesia's export performance
during the first four months of this year, a senior official at
the Ministry of Industry and Trade said.

"The prices of agricultural commodities, particularly crude
palm oil (CPO), rubber, coffee and cocoa, in the international
market have been on the rise," director general for foreign
affairs at the ministry, Sudar SA, told The Jakarta Post on
Wednesday.

Sudar said export value during the first four months of the
year jumped by 49 percent for CPO, coffee 16 percent and cocoa 12
percent.

The Central Statistics Agency (BPS) reported earlier this week
that the country's exports during the January-April period rose
by more than 13 percent to US$19.95 billion from the same period
last year.

BPS said export value from the agricultural sector grew by
9.72 percent, while exports from the industrial sector increased
by 6.41 percent and mining (including oil and gas) by 31.42
percent. The agricultural sector, however, accounts for only a
small fraction (4.04 percent) of the country's export value
structure, which is still largely dominated by the industrial
sector (65.29 percent).

The government is hoping that exports can help push the
economy to grow at a higher rate of 4 percent this year, from 3.7
percent last year, amid signs that domestic consumption, which
has been the main engine for growth during the past couple of
years, has begun to weaken.

There has been concern that exports would remain weak this
year amid the global economic slowdown and uncertainties at home,
which have prompted foreign buyers to shift attention to other
countries in the region.

Others, however, believe that Indonesia's exports will be
largely unaffected by the global slowdown because they are mainly
agricultural commodities, low-end manufacturing goods and oil and
gas products.

There also have been fears that the rapid appreciation of the
rupiah, which strengthened to a 31-month high against the U.S.
dollar last week, would affect exports.

But Sudar said that so far the strength of the rupiah had not
affected exports.

He maintained the government's earlier forecast that non-oil
and gas exports this year would rise by 5 percent to about $47
billion from last year's level.

Meanwhile, industry newsletter Oil World, as quoted by
Bloomberg newswire on Monday, reported that world palm oil prices
might rise in the coming months due to an increase in demand from
India, the world's largest importer of the edible oil, and a drop
in stockpiles.

Indonesia, the world's second largest producer of CPO after
Malaysia, sold some 710,000 tons of the commodity to India
between January and April this year.

The Indonesian Palm Oil Producers Association predicted that
the country's export of CPO and derivative products would reach
some six million tons this year.

The association is also optimistic that this year's CPO output
will reach 9.6 million tons, from last year's figure of nine
million tons.

Data from related associations showed that the country's
annual export volume of rubber, cocoa and coffee were 1.23
million tons, 344,000 tons and 400,000 tons, respectively.