7 Economic Risks in Looking at Commodity Price Movements

Palm Oil Magazine
Doc. Palmoilmagazine.com / Andrial Saputra, the Head of Exchange and Business Development at PT Kharisma Pemasaran Bersama (KPBN), emphasized the significance of understanding economic risks when forecasting commodity price movements in 2023.

PALMOILMAGAZINE, JAKARTA – During a Planters #2 talk show, Andrial Saputra, the Head of Exchange and Business Development at PT Kharisma Pemasaran Bersama (KPBN), emphasized the significance of understanding economic risks when forecasting commodity price movements in 2023.

Andrial Saputra outlined at least seven economic risks that should be taken into account. Firstly, he pointed out the instability in geopolitics, emphasizing that shifts in the geopolitical relations among various countries could have a substantial impact on commodity prices. Factors such as trade tensions, armed conflicts, or policy changes abroad can influence the supply and demand dynamics of commodities.

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The second, inflation and interest rate which means, inflation level which is high could minimize the people’s interest to by and this would lead to escalate production costs. High interest rate would influence the investment and loan by the company.

The third, United States (US) interest rate which means, what US has decided would deliver domino effect in many countries. The increasing interest rate in US would lead cashflow from developing countries, including from Indonesia.

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The fourth, recession prediction in the globe. Andrial said, if the recession in the globe really happens, the commodity would decrease in demands and could make commodity cheaper.

The fifth, trade balance in Indonesia which means, imbalance between export and import in Indonesia would have something to do with rupiah currency and commodity price. The constringency of trade balance would minimize revenue from export.

The sixth, inflation and Indonesian Bank rate. Andrial thought, inflation in Indonesia and policy about interest rate published by Indonesian Bank (IB Rate) would influence the economy the most. “Higher inflation could minimize the people’s purchase capability while IB Rate would influence the loan cost and investment,” he said as a speaker in Talkshow Planters#2 in Riau where Palmoilmagazine.com attended.

The seventh, slow economic progress which means, if the economy in Indonesia gets slower, the demands on commodity in this country would be decreasing. “This could influence the commodity price in a whole,” he said. (T2)

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