Indonesia swings to trade surplus on palm oil prices

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Indonesia swung to a higher-than-expected trade surplus in February as a jump in palm oil prices and slowdown in imports boosted Southeast Asia’s top economy, official data showed Tuesday.

The surplus of $785.3 million came after a $431 million deficit in January caused by a controversial ban on mineral ore shipments that hit exports.

Economists had expected a surplus of around $420 million.

Inflation also eased in March, and both indicators add to signs in recent months that the economy has stabilised after being hard hit by emerging market turmoil last summer.

The price of crude palm oil rose about four per cent in February, according to data from the national statistics agency.

Indonesia is the world’s biggest producer of the commodity, which is used in numerous everyday goods from biscuits to shampoo.

Imports fell nearly 10 per cent on year to $13.78 billion, the data showed.

“The trade surplus was beyond our expectation and we believe it was helped by the high (palm oil) prices and a decline in imports,” said Bank Central Asia economist David Sumual.

Inflation eased to 7.32 per cent in March from 7.75 per cent in February due to cheaper food costs, the data showed, continuing a recent downward trend after a surge last year sparked by a fuel price hike.

However, the figure is still above the central bank’s target of 3.5-5.5 per cent.

The data is positive news for the economy after speculation the US Federal Reserve would start to wind down its economic stimulus programme prompted huge falls in the Jakarta stock market and rupiah last year.

Both the currency and stocks have also recently regained strength but the central bank warned last month economic growth was still at risk of further tapering and a slowdown in China.

Analysts have said the bank may face pressure to cut rates from the present 7.5 per cent in coming months, as the country holds nationwide legislative and presidential elections.

Slightly offsetting the news, HSBC’s manufacturing purchasing managers index — a gauge of manufacturing activity — narrowed further in March to 50.1, from 50.5 in February, with the bank blaming a slowdown in domestic demand. A figure above 50 points to growth while anything below indicates contraction.

 

 

 

 

Source : Channel News Asia | April 1, 2014

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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