By Stefanno Sulaiman and Gayatri Suroyo
JAKARTA (Reuters) -Indonesia’s trade surplus was bigger than expected in February as a surge in palm oil shipments bolstered exports, data showed on Monday, extending a strong start to the year even as the spectre of tariff wars dimmed the outlook for global trade.
On top of the uncertainty created by U.S. tariffs, changes to Indonesia’s domestic policy settings could also hurt mining shipments in the months ahead, some economists warned.The February surplus of $3.12 billion was larger than the $2.45 billion forecast by analysts in a Reuters poll, and followed an upwardly revised $3.49 billion surplus in January, the statistics department said.
Exports rose 14.05% in February from a year earlier to $21.98 billion, quicker than the 9.10% rise expected by analysts in the poll.
The value of crude and refined palm oil exports jumped nearly 90% in February from a year earlier to $2.27 billion. Prices of the edible oil have risen in recent months on expectations of tight supply. In volume terms, shipments rose by an annual 45% to 2.06 million metric tons.
Exports of precious metals, jewellery and nickel metals also rose, helping offset a drop of nearly 20% in coal exports, which the statistics bureau said was due to both lower prices and volumes, as well as a 6% decline in oil and gas shipments.
By value, February coal exports were worth $2.08 billion, the lowest in three years.
Imports by Southeast Asia’s largest economy were $18.86 billion in February, up 2.30% on a yearly basis, compared with a 0.6% increase expected in the poll, supported by a 24% surge in vehicles and spare parts imports.
Hosianna Situmorang, an economist with Bank Danamon, said the trade data outlook would be coloured by Jakarta’s proposal to hike royalty rates across commodities like coal, nickel, copper, gold and tin, which came as some commodity prices were declining.
“These measures add financial strain to the mining sector … potentially weakening Indonesia’s trade surplus and deterring investment,” she said.
Exports of coal and nickel metals made up nearly 20% of total shipments last month.
Bank Permata’s economist Josua Pardede said imports would likely rise further due to the government’s pro-growth policy, while exports would struggle amid escalating trade war tensions.
The trade data will be among a host of economic indicators the central bank considers in its monthly review of monetary policy later this week. Bank Indonesia is likely to keep rates unchanged to focus on currency stability, a separate Reuters poll showed.
(Reporting by Jakarta bureau; Editing by John Mair and Stephen Coates)
