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Commodities price decline to continue in 2024, experts say
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Dockworkers walk on Jan. 4, 2022 past a barge loaded with coal at a coal loading port in Palembang, South Sumatra. (Reuters)
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ndustry insiders and experts believe commodity prices will continue their downward trend this year from the multiyear highs recorded in 2022 but settle at a higher level than where they were before COVID-19 disrupted markets.
In 2022, Indonesia benefited from a global price boom for coal and crude palm oil (CPO), its main export commodities.
Data from state-owned lender Bank Mandiri show that the CPO benchmark price more than doubled from an average of 524.5 Malaysian ringgit (US$113) per tonne in 2019 to 1,075.5 ringgit per tonne in 2021, and then rose further to average 1,176 ringgit per tonne in 2022.
Coal gained even more over the same period, with the same dataset showing the Newcastle Coal Index increasing from an average price of $78.1 per tonne in 2019 to $357.8 per tonne in 2022.
Speaking to reporters on Dec. 12, Wael Mansour, the World Bank’s senior economist for Indonesia and Timor-Leste, noted that the archipelago had never been in control of its commodities prices, which were determined by global developments.
“The problem with commodities is, they’re less dependent on what the domestic economy does. [They’re] more dependent on what the global demand is and what the global prices [are],” said Mansour.
The 2022 multiyear highs in coal, crude oil and natural gas prices were attributable to global uncertainty and supply disruptions after Russia launched its war on Ukraine. The upward trend included CPO prices, as the war and trade restrictions disrupted vegetable oil supplies that year.
