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Indonesia's August exports, trade surplus hit record as resources boom

Published 15/09/2021, 02:48 pm
© Reuters. Workers are seen on a ship carrying containers at Tanjung Priok Port in Jakarta, Indonesia, January 11, 2021. Picture taken January 11, 2021. REUTERS/Willy Kurniawan
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By Gayatri Suroyo and Fransiska Nangoy

JAKARTA (Reuters) -Indonesia's exports hit a record high of $21.42 billion in August, boosted by surging commodity shipments, helping Southeast Asia's biggest economy post its largest ever monthly trade surplus, official data showed.

Robust exports helped Indonesia pull out of recession in the second quarter, but analysts say its recovery may be slowed by COVID-19 infections and supply chain disruptions.

The resource-rich country's August shipments rose 64.1% from a year earlier, according to data released by the statistics bureau on Wednesday, handily beating analysts' forecast in a Reuters poll for a 36.90% rise.

Sales of palm oil, coal and natural gas, its top commodities, surged more than 100%. Shipments of copper, tin and steel also jumped.

The August export value surpassed Indonesia's last record high of $18.65 billion in August 2011, during the previous global commodity boom.

Commodity prices have been rising as more economies reopen from last year's COVID-19 lockdowns.

Coal and palm oil prices have reached record highs as demand outstripped supply, while tin prices also surged due to a supply crunch.

Riding on the trend, Indonesia has posted a trade surplus every month since May 2020.

August's surplus was $4.74 billion, compared with a $2.36 billion surplus expected in the poll. July's surplus was $2.59 billion.

The G20 economy also booked a 55.26% annual rise in imports in August to $16.68 billion, beating the poll's 45.10% growth prediction.

Indonesia's COVID-19 restrictions were eased last month after infection numbers gradually fell.

Wisnu Wardana, an economist with Jakarta-based Bank Danamon, said it may not take long before Indonesia's trade numbers normalise and commodity prices fall, adding that authorities should use this as an opportunity to build local industries.

"Judging from the global financial crisis, when the global real sector recovers and we come closer to quantitative tightening, commodity (prices) will adjust," he said, referring to some central banks' plans to scale back emergency stimulus.

© Reuters. Workers are seen on a ship carrying containers at Tanjung Priok Port in Jakarta, Indonesia, January 11, 2021. Picture taken January 11, 2021. REUTERS/Willy Kurniawan

Maybank Indonesia economist Myrdal Gunarto said resource prices will remain high as long as demand from China remains strong. But he said as Indonesia eases anti-virus mobility curbs further, domestic demand for imports also will rise, narrowing the trade surplus.

The large trade surplus could add to onshore supply of U.S. dollars, helping Bank Indonesia maintain monetary policy accommodative without hurting the rupiah. The central bank is scheduled to review monetary policy next week.

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