Saturday, 25 January 2020

Commodity Prices Down; Indonesia Plans Negotiation with India



Petir Garda Bhwana

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  • TEMPO.CO, Jakarta - The government is anticipating the impact of falling commodity prices in the global market, which would affect trade balance. One way is by accelerating the transformation of biodiesel from B20 to B30 in order to absorb excess production of crude palm oil (CPO) and its derivatives that have not been absorbed by the world market.

    India's plan to divert its CPO import from Malaysia to Indonesia can also be used as a momentum to boost export performance. For this reason, the government will soon conduct trade negotiations with India; the biggest buyer of palm oil.

    "That way, Indonesia's production can be supplied to India's palm oil export market," Moegiarso, secretary of the Coordinating Ministry for Economic Affairs, told Tempo on Wednesday, October 16.

    Susiwijono said the government is also seeking to fast-track the downstreaming of the domestic industry as an import substitution. This is expected to increase the added value of commodities, and reduce dependence on imports of basic and pre-processed raw materials, as well as raise the added value of final goods.

    Bank Indonesia executive director of communication Onny Widjanarko said that the decline in the CPO and coal exports value was caused by falling prices. In terms of volume, both CPO and coal still showed positive growths of 2.1 percent and 8.2 percent respectively (January-September 2019).