Indonesia’s coal export ban nearly wipes out January trade surplus

  • Trade data expected at 04:00 GMT on Tuesday, February 15

JAKARTA, Feb 14 (Reuters) – Indonesia’s monthly trade surplus is expected to fall 80% to $190 million in January after the world’s top coal exporter cut shipments last month and imports took a hit. momentum, according to a Reuters poll released on Monday.

Authorities announced on January 1 an unexpected suspension of all coal exports due to extremely low fuel stocks at national power plants. Shipments were allowed to gradually resume from January 10, but the ban remains in place for minors who do not comply with domestic sales requirements. Read more

The resource-rich country has recorded a trade surplus every month since May 2020, benefiting from an upward trend in commodity prices as countries lift COVID-19 restrictions. Thermal coal is Indonesia’s number one export product.

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Fifteen economists polled in the poll gave a wide range of forecasts for January’s trade balance: from a deficit of $1.14 billion to a surplus of $1.3 billion.

The median was a surplus of $190 million, Indonesia’s lowest in 21 months. It was also a fraction of December’s surplus of $1 billion and the average monthly trade surplus of $3.9 billion over the past six months.

The poll predicted a slowdown in export growth in January to 33.86% on an annual basis, from 35.30% a month earlier. Meanwhile, imports posted a 51.38% increase, compared to an annual increase of 47.93% in December.

Bank Mandiri, whose own expectations roughly matched the poll’s median, wrote in a note that the ban would have reduced export earnings by about $1 billion.

Indonesia’s merchandise trade surplus is expected to decline this year, with domestic demand growing as Southeast Asia’s largest economy recovers from the pandemic, and commodity prices expected to normalize towards the end of the year, added Bank Mandiri.

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Poll by Vivek Mishra and Tushar Goenka; Additional reporting by Fransiska Nangoy; Written by Gayatri Suroyo; Editing by Kanupriya Kapoor

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