Esther Samboh, Jakarta – Indonesia's monthly exports reached a new record in May, easing four months of pressure on the nation's trade surplus amid an import boom, the national statistics agency said.
The Central Statistics Agency (BPS) announced on Friday that the value of May exports reached an all-time high of US$18.33 billion, a 45.29 percent increase compared to the same month last year, largely due to the surging value of Indonesia's oil and gas commodities, as well an increase in overseas demand for fats and animal fats.
Imports increased by 48.5 percent on a year-on-year basis in May, reaching $14.83 billion on the back of the increase of electronic goods and mechanical tools shipments from other countries, BPS chairman Rusman Heriawan told a news conference at his office in Jakarta.
The surge in the exports resulted in a trade surplus of $3.5 billion during the month, the first increase after a three-month slide due the rise in imports, which showed a steady increase in recent months, as the rupiah appreciation prompted manufacturers to increase imports of raw materials.
"[The widening trade surplus] is a clear plus for the growth outlook, although commodity exports may tend to soften as we step into the second half," OCBC Bank Singapore economist Gundy Cahyadi said in a statement.
Surging investment, strong domestic consumption and increasing net exports – total exports minus total imports – have pushed up the country's economic growth to 6.1 last year and 6.5 percent in the first quarter of this year.
"The surge in exports is still mainly due to soaring oil prices, as we export crude palm oil," Rusman said. Indonesia, a widely known hard and soft commodity exporter of coal, crude palm oil and tin, has benefited from the surge in global commodity prices.
In response to the recent Australian government's six-month ban on live cattle exports to Indonesia, Rusman said Indonesia's "deficit with Australia will slide as we always suffer a deficit with them". From January to May, Indonesia's export of non-oil and gas goods reached $802.5 million to Australia, while Indonesia imported $1.54 billion worth of non-oil and gas products from Australia.
China, Japan and the United States remained the top three export destinations of Indonesia's non-oil and gas goods with respective values of $1.8 billion, $1.5 billion and $1.3 billion, accounting for a cumulative contribution of 32.75 percent of the nation's overall exports.
In the first five months of this year, the share of industrial goods in the country's export basket increased to 61.74 percent of the overall exports compared to the same period last year, signaling a contradiction to the widespread assumption of a de-industrialization phenomenon in the country, Rusman said.
Meanwhile, shares of agricultural and mining products decreased to 2.68 percent and 15.61 percent from 2.94 percent and 17.92 percent, respectively.
The top three export destinations are also among Indonesia's 12 major importers – which account for 77 percent of overall imports – other than Thailand, Singapore, South Korea, Malaysia, Australia, Taiwan, Germany, France and England.
"So despite the tsunami and earthquake, Japan remains one of our largest markets," Rusman said, in reference to the worst ever earthquake and tsunami that struck on March 11 and the subsequent nuclear crisis that followed. The BPS chief previously saw a decline in Indonesian exports to Japan.
In January-May imports, the share of capital goods – which is considered the most productive indicator of the nation's imports that could create multiplier effects for the country's economy – continued to slide to 16.98 percent of overall imports, compared with 19.38 percent last year.
Raw materials' share in the five-month period soared to 75.34 percent versus 73.23 percent during the same period last year, while the share of consumer goods increased only slightly to 7.68 percent from the previous 7.39 percent.