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.