Jakarta, CNBC Indonesia – Indonesia’s surplus is thinning in July 2022 and is expected to be further eroded in the future. The decline in commodity prices, the weakening of the global economy, and the surge in fuel imports were the factors.
The Central Statistics Agency (BPS) noted that Indonesia’s exports in July reached US$ 25.57 billion. This value decreased by 2.20% compared to the previous month (month to month/mtm) still jumped 32.03% compared to July 2021 (year on year/yoy).
Meanwhile, imports in July were recorded at US$ 21.35 billion, up 1.64% (mtm) and soaring 39.86 percent.
Thus, the trade balance in July posted a surplus of US$ 4.23 billion. This value is lower than June which was recorded at US$ 5.15 billion.
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Deputy for Distribution Statistics and Services at BPS Setianto said the decline in exports was caused by sloping commodity prices in the international market. By Monthly, CPO prices have slid 29.61% in July, natural gas has fallen 5.4%, wheat has fallen 16.8%, and nickel has fallen 16.3%.
However, coal is still a lifesaver as its price soared by 7.6%.
“You need to be careful about the existence of windfall commodities that are the mainstay of exports. The decline in commodity prices such as CPO (to be) a sign of the end windfall commodity prices,” said Setianto, in a press conference, Monday (15/8/2022).
Setianto added that this year’s very impressive export was driven more by the increase in export commodity prices. In terms of volume, Indonesia’s exports tend to stagnate. This condition makes Indonesia’s exports prone to plummeting when commodity prices return to normal.
For the record, the export value from January to July was recorded at US$ 166.70 billion, up 36.36% compared to the same period last year.
“Given that commodity prices have shown a decline, it is necessary to watch out for the trade balance going forward. Windfall could end if commodity prices return to normal conditions, because the volume of Indonesia’s main commodity exports tends to stagnate,” Setianto said.
Coal exports, for example, tend to stagnate in the range of 30-33.5 million tons per month. The surge in coal exports was mainly triggered by rising prices which continued to soar due to the Russia-Ucaine war, India’s energy crisis, and the problem of gas supply in Europe.
CPO exports which contribute to 15% of Indonesia’s export value also only move in the range of 1.5-2 million tons. The exception occurred in July 2023 where exports reached 2.2 million tons due to the program flush out.
Ferronickel exports are also stagnant in the range of 0.4-1.5 million tons so far this year, even though prices jumped considerably in March 2022.
In addition to sloping commodity prices. Setianto warned that the economic slowdown of European trading partners from China, Japan to the United States could have a major impact on export performance.