Palm Oil Entrepreneurs Do Not Feel Export Windfall from Rupiah Weakening

The theory that a weakening Rupiah benefits exporters and provides a profit windfall is not always experienced by entrepreneurs, as seen in the current palm oil industry. Eddy Martono, Chairman of the Indonesian Palm Oil Association (Gapki), revealed that although prices have risen, costs have increased accordingly.

“For example, transport and insurance costs have risen by up to 50% due to war. Domestically, production costs have also increased, such as industrial diesel prices rising by 100% and fertiliser prices rising by up to 30%,” Eddy stated on Tuesday (2/6).

He explained that the benefits of a weaker Rupiah are negated because several components, such as fertiliser, transport, and export insurance, are still priced in USD.

Meanwhile, Indonesia’s trade surplus in April 2026 recorded its lowest level in 72 months. The Indonesian Central Statistics Agency (BPS) noted that the goods trade surplus for that period was only US$89.1 million, or approximately Rp1.59 trillion (at an exchange rate of Rp17,860 per US dollar), significantly lower than previous months.

“Therefore, the April 2026 surplus is the smallest surplus since May 2020, marking the end of a 72-month consecutive surplus streak,” said BPS Deputy for Methodology and Statistics, Pudji Ismartini, in an online release on Tuesday.

The April surplus also dropped sharply compared to March 2026, which reached US$3.32 billion, and was lower than the April 2025 surplus of US$160 million.

In other developments, the Rupiah exchange rate opened weaker by 54.50 points to the level of Rp17,859 per US dollar in Tuesday morning trading, 2 June 2026. Experts are closely monitoring the Rupiah as it continues to face pressure, breaching the Rp17,800 per US dollar level.