IMPORTS IN JUNE 2014 AT USD 15.72 BILLION

1.           1.     Oil & Gas and Non Oil & Gas Imports

Indonesia’s imports in June 2014 reached USD 15721.21 million, up USD 950.8 million (6.44 percent) compared to May 2014. This is triggered by the increase in the value of non-oil & gas imports by USD 1262.8 million (11.41 percent), although oil & gas imports fell by USD 312.0 million (8.42 percent). Imports of oil & gas imports was triggered by the decline in the value of crude oil imports by USD 135.4 million (10.44 percent), imports of oil products by USD 331.4 million (2.43 percent), and gas imports by USD 32.8 million (14.10 percent).

           

Indonesia’s imports value from January to June 2014 reached USD 89,977.0 million, down USD 4,433.8 million (4.70 percent) over the same period of the previous year. The decline in the oil and gas sector by USD 5122.8 million (5.70 percent) is the cause of the decrease in the value of Indonesia’s imports. In more detail, the decline in oil & gas imports caused by a decline in the value of imports of oil products of oil products by USD 331.4 million (2.43 percent) and USD 331.4 million (2.43 percent). Meanwhile, imports of crude oil and gas increased by USD 15.4 million (0.22 percent) and USD 5.2 million (0.34 percent), respectively.

 

1.           2.    Non Oil & Gas Imports by 2-Digit Hs Groups of Goods

In June 2014, the value of Indonesia’s non-oil & gas imports reached USD 12,326.5 million. of the major categories of goods, three classes of goods experience a decline in imports value compared to May 2014, namely cotton at USD 45.2 million (19.89 percent), cereals at USD 15.3 million (4.45 percent), and electrical machinery and equipment at USD 7.0 million (0.50 percent). Meanwhile, seven other groups which experienced an increase in import value.

Of the seven categories of goods which experienced an increase import value, two classes of goods increased over USD 100.00 million, i.e. machinery and mechanical appliances by USD 373.4 million (18.22 percent) and iron and steel by USD 141.7 million (20.80 percent). The following four classes of goods increased from USD 50.0 million to USD 100.0 million, i.e. articles of iron and steel at USD 93.1 million (28.59 percent), vehicles and parts thereof at USD 78.6 million (16.01 percent), Meanwhile, plastics and articles thereof increased below USD 50.0 million, i.e. USD 48.6 million or 7.68 percent.

3.            3. Non Oil & Gas Import by Main Countries Origin

Total value of Indonesian non-oil & gas imports in May 2014 amounted to USD 11,048.7 million, down USD 1,513.5 million (12.05 percent). From April 2014. Similarly, non-oil & gas imports from thirteen major countries fell by 13.93 percent (USD 1,419.0 million). The decrease was primarily due to the decline in the import value in some major countries, such as Japan by USD 397.8 million (24.06 percent), China USD 346.6 million (12.15 percent), the United Stated USD 156.5 million (18.62 percent), South Korea USD 152.2 million (20.45 percent), and Singapore USD 135.2 million (14.01 percent).

In terms of the role to total non-oil & gas imports in may 2014, ASEAN accounted for the largest part, which is 22.09 percent (USD 2,441.2 million), followed by the European Union at 9.49 percent (USD 1,048.2 million). While, the thirteen major countries provided a role of 79.36 percent, where China and Japan are the largest importers with a contribution of 22.68 percent (USD 2,506.3 million) and 11.36 percent (USD 1,255.3 million), respectively. (E)

Business New - August 6, 2014

EXPORT IN JUNE 2014 REACHED USD 15.42 BILLION

1.            1. Oil & Gas and Non Oil & Gas Exports

Indonesia’s exports in June 2014 increased by 4.00 percent compared to May 2014, from USD 14,823.6 million to USD 15,416.0 million. when compared to June 2013, exports decreased by 4.45 percent.

Increase of exports in June 2014 was due to the increase in non-oil & gas exports by 1.43 per cent from USD 12,447.9 million to USD 12,625.7 million, and oil and gas exports increased by 17.45 percent from USD 2,375.7 million to USD 2,790.3 million. Furthermore, increase in oil & gas exports was caused by the increase of crude oil exports by 28.62 per cent to USD 990.3 million and exports of crude oil by 5.63 percent to USD 319.3 million. Similarly, gas exports increase by 13.59 percent to USD 1,480.7 million. The volume of oil and gas exports in June 2014 to May 2014 for crude oil increased by 13.59 percent, while exports oil and gas products also rose by 0.79 percent and 15.95 percent, respectively. Meanwhile, price of Indonesia crude oil in the world market increased from USD 106.20 per barrel in May 2014 to USD 108.95 per barrel in June 2014.

2.            2. Non Oil & Exports by 2-Digit HS Group of Good

s

The largest increase in non-oil & gas exports in June 2014 to May 2014 occurred in Jewelry/precious stones at USD 338.8 million (109.21 per cent), while largest decline occurred in mineral fuels at USD 138.5 million (7.35 percent).

3.            3. Non Oil & Gas Export by Main Destination Countries

The largest increase in non-oil & gas exports in June 2014 to the United States, China and Japan reached USD 1,408.7 million, USD 1,329.2 million and USD 1,214.4 million, respectively, with the role of the three reaching 31.30 per cent. (E)

Business New - August 6, 2014

HARD FOR INDINESIA NOT TO BE DEPENDENT ON IMPORTED PRODUCTS

Experts of the industry circles agreed that seed nursery business must be developed to step up competitiveness of horticulture products in the market, at home or abroad. Benny Kusbini, Chairman of the Indonesian Council of Horticulture stated in Jakarta on Tuesday [22/7] that low investment in horticulture would cause overseas horticulture products to invade Indonesia to kill the local farmers. For information, today the Constitutional Court was testing Law no 13/2010 on Horticulture, especially Article 100 which restricted foreign investment to 30%.

Benny stated that Indonesia’s horticulture products was still way behind compared to Thailand, unless there were effort to improve, it was feared that Indonesia would be merley market for other countries. According to Benny, the Law of Horticulture had accommodated all farmer’s demand. However there was a crucial point in Article 100 on restriction for foreign investment at only 30%. If this Article was put in effect, he said, seed producers would relocate their business abroad which would disadvantage millions of horticulture farmers who relied on premium variety.

Due to weak competitive edge, Benny saw that is was hard for Indonesia to be independent from imported products especially agricultural and horticulture products. Other problem was low production due to anomalous weather. Besides agriculture system in Indonesia was still inferior which was why production was low. This was because Indonesia had no command over advanced agro-technology. It seemed that the Bogor Institute of Agriculture [IPB] was not doing their role to the maximum while even infra structure and seed were not sufficient.

Benny disclosed that many other countries were flood like Indonesia, but since their system was good they were able to minimize the flood effect. Benny pled the Government to seriously reform agriculture.

About import, Benny reminded the Government that issuing permit for agriculture importing, the Government check up people’s demand first so there would be no distortion and conflicting interest between the product imported and the product produced by local farmers, although the consumers retained their right to buy imported horticulture products.

The way it had been, Indonesia horticulture products was uncompetitive because the Five ‘P’ of Marketing: Product, Packaging, Pricing, and Promotion was not well executed. To illustrate horticulture product produced in Thailand an Japan were also produced at home. The potencial product were : salak palm fruit, mangostene, jackfruit, starfruit, watermelon, mango and guava. Benny said that if demand for horticulture products at home increased, importers. Imports would glance at the product.

Meanwhile the Government estimated the volume of imported horticulture this year was more than 6000,000 tons, an increase of 50% against last year which was only 400,000 tons. However the Director General of Trading of the Ministry of Trade, Bachruil Chairi was pessimistic that import could fulfill all of the indicative demand of 800,000 tons. By end of Semester I/2014, Bachrul mentioned that there were only 23 out of 151 importers who could  realize 80% of the permitted amount. By the rule, importers who did not fulfill threshold would not be given anymore permit to import. He projected that import realization in Semester II/2 would be slightly above 300,000 tons, an increase of 5% - 10% against previous semester.(SS)

Business New - July 25, 2014

BY YEAR END INDONESIA’S TOTAL CPO EXPORT WOULD CAME TO 20 MILLION TONS

By end this year Indonesia’s total CPO export would reach 20 million tons, lower than the volume of 2013 at 21 million tons. As disclosed by the Director of GAPKI Fahdi Hasan on Monday [21/7] this downturn was because of entering semester 1 of 2014, export of CPO and by-products from Indonesia which was not as bright as estimated. Export volume of CPO and by-products in Semester I 2014 which only reached 9.8 tons or down by 7.7% against same period last year at 10.6 million tons.

By year-on-year basis downturn of Indonesia’s CPO export volume was due to less demand from India quite significantly by 37% from 39 million tons in Semester I 2013 to 2,12 million tons in Semester I 2014. Besides soon in Semester II there would by El Nino climate disturbance. There was hope price of palm would improve, and Indonesia’s export of CPO would improve in Semester II against Semester I.

Meanwhile export of CPO and by-products in June 2014 was starting to move up by 5% against previous month from 1.7 million tons in May to 1,79 tons in June. Considering that Ramadhan and Idul Fitri was just coming near, increase of export volume would not be significant and was still below expectation. However there was increase of CPO export to some countries. By predicted, increase of demand would come from Muslim populated countries due to Ramadhan and Lebaran.

Significant demand was from Bangla Desh, Export volume to Bangla Desh was seen to increase by 55% against last month from 116 thousand tons from Pakistan where export volume increased by 10% against previous months from 145 thousand tons to 260 thousand tons.

Significant increase of demand also was from non-Muslim countries in Uni Europe where export increase was booked at 37% compared to June last month from 277,4 thousand tons to 381 thousand tons followed by China where increase was posted at 9%. India only booked increase of demand by 3%. However America posted reduction of CPO and by products from Indonesia by 27% compared to May from 36 thousand to become 26.5 thousand tons.

The dynamic demand above was in the persective of global economy as price of CPO weakened in the past week. Downturn of Indonesia’s raw oil was due to change of demand from buyer countries from CPO by-products to soy oil.

In case of the USA, downturn of demand was due to over supply of soy and lowered price. The US Agricultural Department reported that supply of soy by August 31 2015 would be 415 million bushels. The amount increased compared to stock in June at 325 bushels. Average price of CPO in Roitterdam in June 2014 moved in the range of USD 825 – USD 875 per MT, the average price being USD 856 per MT. The average price dropped by around 4% compared to average price in May at USD 896.6 per MT.

In the past years, toward Ramadhan fasting month demand for soy increased significantly followed by price increase, but this year demand for CPO and by products from Indonesia was low, way below expectations. In July prices was predicted to stagnate, Ramadhan and Idul Fitri had not been able to jack up demand or price. Negative sentiment would still be prevalent because CPO supply from Malaysia was plentiful while demand was low. CPO price in the next week would depend on economic condition in China. China was the world’s second biggest consumer of CPO, so if economic growth in China was positive, there was hope of increasing demand from China.

In the first 2 weeks of July, global price of CPO was in the range of USD 845 – USD 855 per MT. GAPKI predicted that price of CPO by end of July would not move far from USD 840 – USD 880 per MT. Hopefully in the next 2 weeks before Idul Fitri global price could be elevated, the same was with demand. Meanwhile export price in July 2014 was set by the Ministry of Trade at USD 805 and export tax 10.05% with average considered price [Rotterdam, Kuala Lumpur and Jakarta] USD 865.35.

Meanwhile in expanding CPO market to Turkey, by end of May GAPKI collaborated with the Ministry of Agriculture of RI conducted a business forum session between Indonesia CPO producers and businesspeople in Istanbul. The objective was to promote trade between Turkey and Indonesia and promote Indonesia’s CPO to the Middle East especially Turkey because Turkey was business hub in the region.

To make sure that CPO price from Indonesia remained competitive, GAPKI recommended the Government through the Ministry of Agriculture and Ministry of Trade to sign PTA agreement with Turkey. Malaysia had sooner signed PTA with Turkey so import tax for ex Malaysia CPO was lower than that from Indonesia. Ever since signing of the agreement taxes for ex Malaysia CPO was lowered from, 31% to 20%, making Malaysian CPO more competitive than that of Indonesia. GAPKI was expecting the Government to pay more attention to this matter.(SS)

Business New - July 25, 2014