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Indonesia’s record trade surplus ‘unsustainable’ as CPO prices plummet
Indonesia achieved its biggest-ever trade surplus in the first half of 2022, but experts warn the domestic economy’s heavy reliance on raw materials like crude palm oil (CPO) and coal makes the strong export-performance unsustainable.
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Oil palm farmers bring palm fruit to a protest against the government's export ban in Jakarta on May 17, 2022. The ban has since been revoked. (AFP/Mariana )
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ndonesia achieved its biggest-ever trade surplus in the first half of 2022, but experts warn that relying on raw materials like crude palm oil (CPO) and coal as the bulwark of productivity is unsustainable in the long run.
They agree that a wide range of factors will narrow the trade surplus, or even turn it into a deficit, if fundamental aspects of the domestic economy are not changed.
The archipelagic nation’s exports to the rest of the world exceeded its imports by US$24.89 billion. That is more than twice the surplus the country achieved in the equivalent period of 2021.
“[Last] semester's surplus is the highest [...]; this is very good news for us,” Statistics Indonesia (BPS) head Margo Yuwono said on July 15 during a press conference to present the latest trade data.
In the month of June, Indonesia’s surplus amounted to $5.09 billion, which is almost four times as high as a year earlier and up around 75 percent from the preceding month. It also handily exceeded an estimate by Bank Mandiri economists for a surplus of $3.34 billion.
The details of the trade report show that raw materials continue to be of prime importance.
Coal and CPO were the largest contributors to exports in the first half of the year with shipments amounting to $24.11 billion (17.09 percent of the total) and $15.14 billion (10.73 percent of the total), respectively.
