JAKARTA: Indonesia’s trade surplus narrowed more than expected in May, as exports grew more slowly than predicted due to the country’s ban on palm oil shipments, data from the statistics bureau showed on Wednesday.
The resource-rich country has been enjoying an export boom since last year on the back of a surge in commodity prices.
But high global food prices have also fueled domestic inflation and soaring cooking oil prices prompted the government to ban palm oil exports between April 28 to May 23.
The ban wiped out $2.03 billion of palm oil exports in May, or an 88% slump from April, with the biggest drop seen in shipments to India, Pakistan, the United States and Malaysia, according to the statistics bureau data.
Overall, exports in May were worth $21.51 billion, up 27% from a year earlier, compared with the 38.69% growth expected in a Reuters poll.
Exports of other top commodities such as coal and iron ore also slipped on a monthly basis, and the statistics bureau noted that the Eid al-Fitr holidays in the beginning of the month also contributed to slower exports.
Meanwhile, imports were also weaker than expected at $18.61 billion, up 30.74% on a yearly basis versus the poll’s 32.80% growth forecast.
Indonesia posts largest ever trade surplus of $7.6bn in April
The May trade surplus was $2.9 billion, compared with the poll’s prediction of a $3.83 billion surplus and April’s $7.56 billion surplus, which was the biggest on record.
The government has now lifted the palm oil export ban and authorities have been trying to accelerate exports, including by launching a special shipment acceleration programme and cutting export taxes.
“Relaxation of the ban in subsequent weeks and tweaks like the accelerated export programme as well as issuance of special permits etc are expected to provide comfort to commodity exporters and underpin the trade balance,” DBS economist Radhika Rao said.
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