PALMOILMAGAZINE, MEDAN – Indonesia has experienced a surge in the prices of various commodities, particularly palm oil, which has had a positive impact on the country’s economy. This upward trend in commodity prices began in late 2021 and reached its peak in April 2022.
According to Dendi Ramdani, from the Industry and Regional Research Office of the Chief Economist at PT Bank Mandiri, Tbk., the soaring palm oil prices may be seen as an abnormal phenomenon. One contributing factor to this increase in commodity prices is the high inflation observed in many developed countries.
These nations had to implement substantial fiscal measures to support their citizens during the Covid-19 pandemic, whereas Indonesia adopted more modest fiscal interventions.
For instance, the United States of America allocated up to $3,000 per family, with a total expenditure reaching a staggering $22 trillion, in response to the pandemic.
Besides, the war between Ukraine and Russia delivered impacts to sunflower oil supply and this also influenced commodity price. The others were increasing demands from China during Covid-19 and close monetary policy with interest rate, and money withdrawal.
Though many commodities got cheaper by the late of 2022, some thought that it happened for the natural correction after the abnormal leap in the previous ear. Dendi also predicted that palm oil could be cheaper in 2024.
“Though it would not be drastic but it could be about US$ 700 to US$ 800 per ton. The numbers are profitable still,” he said in palm oil focus group discussion (FGD) that Palm Oil Plantation Fund Management Agency (PFMA) conducted that Palmoilmagazine.com attended on 14 September 2023 in Medan.
The implication of this situation is that the stakeholders, planters should be efficient to maintain their margin profits. (T2)