Prabowo sworn in as Indonesian president

Prabowo Subianto was inaugurated on Sunday as Indonesia’s eighth president, succeeding Joko Widodo, who served for a decade. In his inaugural address, he pledged to be the "leader of all Indonesians."

The inauguration ceremony took place in Jakarta and was attended by various foreign dignitaries.

Having served as defense minister in Jokowi's Cabinet, Prabowo was elected in February after winning a landslide victory.

Following the ceremony, the 73-year-old president proceeded to the presidential palace, where he received a warm welcome from the outgoing president.

In an emotional speech, Prabowo emphasized his commitment to unity among Indonesians, regardless of political affiliations, and vowed to advocate for the protection and welfare of the nation’s most vulnerable groups.

He highlighted national unity and food security as the primary focuses of his administration and promised that Indonesia’s natural resources would be managed for the benefit of all citizens.

He also committed to continuing the policies of his predecessor, including the industrialization of mining commodities and the ban on exporting raw minerals and ores.

"We will carry out this oath to the best of our ability and with accountability, prioritizing all the people, including those who did not vote for us," Prabowo stated.

His running mate, 37-year-old Gibran Rakabuming Raka, the son of Jokowi, was also sworn in as vice president.

Indonesia urges recognition of Palestine State

Indonesia has called on East Asian nations to officially recognize the state of Palestine and urged the international community to uphold international law and principles of humanity.

Speaking at the East Asia Summit in Laos, Indonesian Vice President Ma'ruf Amin warned that failure to adhere to international law could lead to the emergence of new conflicts.

“As leaders, we must take a stance and side with international law and humanity. Do not be selective in implementing international law. If this continues, I am afraid that many new conflicts will emerge,” Amin said, as reported by Antara News.

Amin also urged countries that have yet to recognize Palestine to do so immediately, stressing the importance of universal respect for international law without exceptions.

Currently, 146 countries recognize the state of Palestine, with recent additions including Spain, Norway, Ireland, and several Caribbean nations.

His remarks come amidst ongoing Israeli military actions in Gaza. Despite a UN Security Council resolution calling for an immediate cease-fire, the conflict has claimed the lives of over 42,000 people, mostly women and children.

 

Indonesian ban on copper concentrate export

Indonesia, a major copper producer, has decided to postpone the start of a ban on its copper concentrate exports until the end of the year in a move that could deflate copper prices after they hit a record high in May.

Indonesia wants its local copper miners to build smelters and start processing the raw material locally, to boost the economy and offer higher-value copper products that are crucial for clean energy equipment and grid upgrades.

The top copper miners in Indonesia, Freeport Indonesia, and Amman Mineral, were expected to start copper processing at their respective new smelters in May 2024, and they had export permits for copper concentrate until May 31.

Indonesia’s Trade Ministry has been giving miners export permits to continue exporting copper concentrate until their newly built smelters ramp up production and reach full capacity.  

Indonesia has previously planned to impose a ban on exports of copper concentrate beginning on June 01, 2024. But the start of the ban will now be postponed to December 31, 2024, Bloomberg quoted Budi Santoso, director general for foreign trade at the Trade Ministry.

The delay of the start of export restrictions could weigh on sentiment in the copper market, where prices hit a record high this month, topping the US$11,000 per ton mark for the first time ever.

Despite weak fundamentals, especially in China, copper prices have rallied in recent weeks as many traders bet that a supply shortage could materialize soon on the market.

Copper stocks monitored by the Shanghai Futures Exchange continue to rise counter seasonally, hitting 322,000 tons, well above the 130,000 tons seasonal average, Ole Hansen, Head of Commodity Strategy at Saxo Bank said.

“We have argued for some time that the scale of the move higher in copper had become detached from short-term fundamentals,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note.

“Robust Chinese refined copper output, seasonal higher SHFE copper stocks, and negative refined import premiums for China suggest a less supportive market in the near term.”

 

Indonesian entry in OECD linked to normalizing ties with Israel

According to Reuters, Indonesia is under pressure to normalize ties with Israel to become the 39th member of the Organization of Economic Cooperation and Development.

It’s a move that needs the consent of all OECD countries, including Israel, which has been a member state since 2010.

Israeli Foreign Minister Israel Katz objected to Indonesia’s inclusion unless it made a gesture toward Israel, such as normalization. The OECD made normalization with Israel part of Indonesia’s requirements for OECD membership.

It’s a step that comes as Israel has become increasingly isolated on the international stage due to the Gaza war, and it had been presumed that it was not possible to expand its diplomatic ties until the end of that half-a-year conflict.

Israel and Indonesia have long had silent relations in trade and tourism but have otherwise been diplomatic foes on the international stage.

Indonesia had been expected to be one of the countries that would normalize ties under the Abraham Accords, with the former Trump administration promising them a billion dollars to do so.

Plans for the two countries to normalize ties had proceeded under the Biden administration but were scuttled as a result of the Israel-Hamas war, which began on October 07, 2023.

They were revived this winter through the OECD membership process. Among the signs of a shift in their relationship was Israel’s decision to allow Indonesia to participate in the airdrops of humanitarian aid into Gaza, a step it had denied Turkey, with whom it has diplomatic ties.

The OECD outlined its understanding of the role it would plan in the normalization process in a letter Mathias Cormann wrote to Israel, dated March 26.

“I am pleased to confirm that Council has formally agreed to a clear and explicit pre-condition that diplomatic relations must be established with all OECD Members before any decision to invite Indonesia to become a Member of the Organization,” Cormann wrote.

This means, he stated, that the final inanition to Indonesia to become an OECD Member will not be tabled for a decision by Council before diplomatic relations have been established with all OECD Members, he stressed.

“Moreover, I recall that in conformity with Article 16 of the OECD Convention, any future decision to invite Indonesia to become an OECD Member will require unanimity among all OECD Members, including Israel,” he wrote.

Katz, in a letter dated April 10 thanked the OECD. 

“I share your expectation that this process will be a transformative one for Indonesia. I am looking forward to a positive change in Indonesia’s policies in general and vis a vis Israel in particular, notably renouncing its discriminatory policies toward Israel and establishing bilateral diplomatic relations," said Katz.

Palm oil glut to impact producing countries

According to Nikkei Asia, weak prices for palm oil are pushing Indonesia and Malaysia - two of the world's biggest producers to boost domestic use through developing jet fuels and expanding biodiesel programs.

Widely used in Indonesia for cooking oil and applications such as personal care and cleaning products, palm oil is an important sector in Southeast Asia's largest economy with the industry employing millions of workers. Indonesia is the world's largest exporter and it is the country's top export commodity, apart from coal. Palm oil is similarly important in neighboring Malaysia, the world's second-largest producer and exporter.

The benchmark crude palm oil (CPO) price in Malaysia ranged from 3,500 ringgit (US$755) to 4,200 ringgit per ton between January and June. That is compared to the all-time high in April 2022 of almost 7,000 ringgit per ton, following the launch of Russia's invasion of Ukraine, which sent prices of all edible oils skyrocketing. That run-up in prices for palm oil, traditionally the cheapest among vegetable oils, was a continuation of one caused by pandemic-related disruptions since late 2020.

"Elevated inventories in India and mainland China, an expected increase in global soybean production through the 2023-24 season, and the upcoming September-October period of peak palm fruit yields - all point to downward pressure on prices through the remainder of 2023, BMI, a research unit of Fitch Group, said in an August 15, 2023 note.

"Through the medium term, it remains our view that average annual palm oil prices will continue to ease."

BMI forecast an average price of 3,800 ringgit per ton for Bursa Malaysia-listed third-month palm oil futures contracts in 2023, down from the average of 4,910 per ton last year. It also forecast prices will continue to fall, reaching 2,400 ringgit a ton in 2027 -- on par with a five-year pre-COVID pandemic average of close to 2,420 ringgit per ton.

The declines have hurt incomes of major palm oil producers after many enjoyed record profits in 2021 and 2022.

In Malaysia, state-owned conglomerate Sime Darby Plantation reported that second-quarter net profit fell by 54% to 380 million ringgit from the same period in 2022. FGV Holdings, also government linked, saw its plantation sector plunge 97% to 13.76 million ringgit, mainly due to the lower average CPO price compared to the previous year and on top of lower CPO sales and 37% higher CPO production costs.

In Indonesia, net income at top producers Sinar Mas Agro Resources and Technology, Astra Agro Lestari and Salim Ivomas Pratama declined 85%, 54% and 71%, respectively, in the first half of 2023, to 284.3 billion rupiah ($18.7 million), 367.6 billion rupiah and 128.4 billion rupiah.

Political issues also weigh on producers. A European Union regulation on deforestation-free supply chains entered force on June 29, 2023. S&P Global said in August that combined with the EU's renewable energy directive, which limits the use of palm oil for biofuel in EU markets starting in 2030, the new law is "seen as another layer of restrictions by palm oil producing countries."

Indonesia and Malaysia account for about 85% of global palm oil trade while the EU is typically the third largest importer after China and India. Indonesia, Malaysia and the EU have reportedly agreed to form an ad hoc task force to hash out issues related to the implementation of the deforestation regulation.

To deal with the market and political pressures, Jakarta and Kuala Lumpur are seeking new ways to utilize the commodity.

State-owned airline Garuda Indonesia in August announced the start of a static test on a "sustainable aviation fuel," or "bioavtur," on an engine used in its Boeing B737-800 NG fleet, with ground and flight tests to follow. Garuda's bio jet fuel is jointly developed by Indonesian state oil company Pertamina and the Bandung Institute of Technology.

Also last month, Indonesia expanded its mandatory B35 biodiesel program -- produced by Pertamina -- nationwide, after a partial introduction in February. B35 has a higher palm oil content in the diesel mix than the B30 launched in early 2020. Indonesia is next targeting B40 for 2030.

Indonesia is pushing the biodiesel program expansion as palm oil prices have fallen from the record highs. Malaysia is also exploring its own biofuel efforts.

The Malaysian Palm Oil Board and state energy giant Petronas signed an agreement in August to study using cooking oil and palm oil waste as sustainable aviation fuel. In the second phase of the National Energy Transition Roadmap launched late last month, the government included a B30 biodiesel mandate on heavy vehicles by 2030 after rollout by 2025.

Yusuf Rendy Manilet, economist at Indonesian think tank Center of Reform on Economics, sees Indonesia's biofuel policy as ultimately viable. 

"The government's goal is to reduce dependency on imports of oil by leveraging biofuels in order to improve the trade balance," Manilet told Nikkei Asia. "In the long run, with more biofuels becoming available and oil imports reduced ... fuels will become more affordable and lead to improving purchasing power."

BMI said increasing biofuels uptake could pose a "major upside risk" to its price outlook for edible oils overall. "An increase in the rate of diversion of palm oil to the manufacture of blended biofuels -- or, the greater diversion of alternative edible oils, such as soy oil, to biofuels - would tighten the supplies of edible oils for food consumption."

It added that the developing El Nino weather phenomenon, marked by drier and hotter weather in Southeast Asia, poses another major upside risk to its palm oil price outlook over the next 12 to 18 months -- although "much depends on the eventual strength of the El Nino event itself."

BMI said the 2014-16 El Nino, one of the most severe of modern times, led to double-digit annual declines in percentage terms for crop yields in both Malaysia and Indonesia over the 2015-16 season -which resulted in palm oil prices rising by 1,000 ringgit per ton during the period.

G20 members fail to reach agreement on cutting fossil oil use

According to Reuters, the Group of 20 (G20) major economies meeting in India failed on Saturday to reach consensus on phasing down fossil fuels following objections by some producer nations.

Major fossil fuel producers Saudi Arabia, Russia, China, South Africa and Indonesia are all known to oppose the goal of tripling renewable energy capacity this decade.

Scientists and campaigners are exasperated by international bodies' foot-dragging on action to curb global warming even as extreme weather from China to the United States underlines the climate crisis facing the world.

The G20 member countries together account for over three-quarters of global emissions and gross domestic product, and a cumulative effort by the group to decarbonize is crucial in the global fight against climate change.

However, disagreements including the intended tripling of renewable energy capacities by 2030 resulted in officials issuing an outcome statement and a chair summary instead of a joint communiqué at the end of their four-day meeting in Bambolim, in the Indian coastal state of Goa.

A joint communiqué will be issued when there is complete agreement between member nations on all issues.

"We had a complete agreement on 22 out of 29 paragraphs, and seven paragraphs constitute the Chair summary," Indian Power Minister R.K. Singh said.

Sections urging developed countries to deliver on the goal of jointly mobilizing US$100 billion per year for climate action in developing economies for 2020-25, and description of the war in Ukraine, also eluded consensus.

Fossil fuel use became a lightning rod in day-long discussions, but officials failed to reach consensus over curbing unabated use and argued over the language to describe the pathway to cut emissions.

A draft late on Friday reviewed by Reuters read, "The importance of making efforts towards phase down of unabated fossil fuels, in line with different national circumstances, was emphasized."

However, the chair statement released on Saturday evening included concerns from some member nations which were missing in the Friday draft, noting that "others had different views on the matter that abatement and removal technologies will address such concerns".

Singh, in a press briefing after the conference, said some countries wanted to use carbon capture instead of a phase down of fossil fuels. He did not name the countries.

Indonesia seizes Iranian flagged tanker

Indonesian coast guard said on Tuesday it seized an Iranian-flagged supertanker suspected of involvement in the illegal transshipment of crude oil, and vowed to toughen maritime patrols.

The MT Arman 114 was carrying 272,569 tons of light crude oil, valued at US$304 million, when it was seized last week, the Indonesian authorities said.

The Very Large Crude Carrier (VLCC) was suspected of transferring oil to another vessel without a permit on Friday, the Southeast Asian nation's maritime security agency said.

The vessel was captured after being spotted in Indonesia's North Natuna Sea, carrying out a ship-to-ship oil transfer with the Cameroon-flagged MT S Tinos, the agency's chief, Aan Kurnia, said.

"MT Arman was spoofing their automatic identification system (AIS) to show its position was in the Red Sea but in reality it was here," Aan told reporters.

"So it seems like they already had a malicious intent," Aan said, adding that the vessel also dumped oil into the ocean, in violation of Indonesia's environmental law.

The vessels' operators could not be immediately reached for comment.

Along with the Arman, authorities detained its Egyptian captain, 28 crew and 3 passengers, who were the family of a security officer on board, the agency said.

After the two supertankers attempted to escape, authorities focused their pursuit on Arman, assisted by Malaysian authorities as the vessel sailed into their waters, Aan said.

The Tinos was supposed to have been scrapped in 2018, he added. It was built in 1999 while the Arman was built in 1997, according to shipping database Equasis.

The "shadow" fleet of tankers carrying oil from sanctioned Iran, Russia and Venezuela has been transferring cargoes in the Singapore Strait to avoid detection, a Reuters analysis showed this year.

The risk of oil spills and accidents is growing as hundreds of extra ships, some without insurance cover, have joined the opaque parallel trade over the past few years.

Aan vowed that Indonesia's coast guard, assisted by other authorities, would strengthen patrols in its waters. Indonesia is the world's largest archipelago, with about 17,000 islands.

"We have to be firm, tough," he said. "There has to be a deterrent effect so it will not happen again."

In 2021, Indonesia seized Iranian- and Panamanian-flagged vessels over similar accusations. The captains of the two vessels received two-year probation from an Indonesian court.

 

The World Beyond Ukraine

“Ukraine has united the world,” declared Ukrainian President Volodymyr Zelensky in a speech on the first anniversary of the start of the war with Russia. The war may have united the West, but it has left the world divided. And that rift will only widen if Western countries fail to address its root causes.

The traditional transatlantic alliance of European and North American countries has mobilized in unprecedented fashion for a protracted conflict in Ukraine. It has offered extensive humanitarian support for people inside Ukraine and for Ukrainian refugees. And it is preparing for what will be a massive rebuilding job after the war. But outside Europe and North America, the defense of Ukraine is not on top of agenda.

Few governments endorse the brazen Russian invasion, yet many remain unpersuaded by the West’s insistence that the struggle for freedom and democracy in Ukraine is also theirs.

As French President Emmanuel Macron said at the Munich Security Conference in February, “I am struck by how we have lost the trust of the global South.” He is right. Western conviction about the war and its importance is matched elsewhere by skepticism at best and outright disdain at worst.

The gap between the West and the rest goes beyond the rights and wrongs of the war. Instead, it is the product of deep frustration—anger, in truth—about the Western-led mismanagement of globalization since the end of the Cold War.

The concerted Western response to the Russian invasion of Ukraine has thrown into sharp relief the occasions when the West violated its own rules or when it was conspicuously missing in action in tackling global problems.

Such arguments can seem beside the point in light of the daily brutality meted out by Russian forces in Ukraine. But Western leaders should address them, not dismiss them. The gulf in perspectives is dangerous for a world facing enormous global risks. And it threatens the renewal of a rules-based order that reflects a new, multipolar balance of power in the world.

The Russian invasion has produced remarkable unity and action from the liberal democratic world. Western countries have coordinated an extensive slate of economic sanctions targeting Russia. European states have increasingly aligned their climate policies on decarbonization with national security-related commitments to end their dependence on Russian oil and gas.

Western governments have rallied to support Ukraine with enormous shipments of military aid. Finland and Sweden aim to be soon admitted to NATO.

Europe has adopted a welcoming policy toward the eight million Ukrainian refugees within its borders.

All these efforts have been advocated by a US administration that has been sure-footed in partnering with European allies and others.

The squabbles over Afghanistan and the AUKUS security partnership (a 2021 deal struck by Australia, the United Kingdom, and the United States that irked France) seem a long time ago.

Many in the West have been surprised at this turn of events. Clearly, so was the Kremlin, which imagined that its invasion would not provoke a strong and determined Western response. The West’s unity and commitment are not matched elsewhere.

At the beginning of the war, the UN General Assembly voted 141 to 5, with 47 absences or abstentions, to condemn the Russian invasion. But that result flattered to deceive.

“Most non-European countries that voted to deplore Russia’s aggression last March did not follow up with sanctions. Doing the right thing at the UN can be an alibi for not doing much about the war in the real world.”

In a series of UN votes since the war started, around 40 countries representing nearly 50% of the world’s population have regularly abstained or voted against motions condemning the Russian invasion.

Fifty-eight countries abstained from a vote, in April 2022, to expel Russia from the UN Human Rights Council. According to the Economist Intelligence Unit, two-thirds of the world’s population lives in countries that are officially neutral or supportive of Russia. These countries do not form some kind of axis of autocracy; they include several notable democracies, such as Brazil, India, Indonesia, and South Africa.

Much of the fence-sitting is not driven by disagreements over the conflict in Ukraine but is instead a symptom of a wider syndrome, anger at perceived Western double standards and frustration at stalled reform efforts in the international system.

The distinguished Indian diplomat Shivshankar Menon put the point sharply in Foreign Affairs earlier this year when he wrote, “Alienated and resentful, many developing countries see the war in Ukraine and the West’s rivalry with China as distracting from urgent issues such as debt, climate change, and the effects of the pandemic.”

Courtesy: Foreign Affairs

 

Raisi demands urgent OIC meeting over Israeli attack on Al-Aqsa Mosque

Iranian President Ebrahim Raisi has urged the Organization of Islamic Cooperation (OIC) to requisite an urgent meeting to discuss the situation in the occupied Palestinian territories after Israeli forces stormed the al-Aqsa Mosque violently overnight, fired stun grenades, and attacked Palestinian worshipers.

During a phone call with his Indonesian counterpart Joko Widodo on Thursday, he demanded that the 57-member body call an emergency meeting to come to a consensus on how to defend the rights of defenseless Palestinians and confront the crimes of the Tel Aviv regime.

The Iranian president stressed that the support for the rights of the Palestinian nation and fight against the Zionist regime constitute an underlying principle of the Muslim Ummah, referring to Palestine as the beating heart of the Muslim world.

“The unity of the Muslim world remains essential in order to face down the aggression and crimes committed by the Zionist regime,” he continued.

The Iranian president stated that the Muslim world, as a powerful bloc in global politics, needs more unification.

Raisi declared that Iran supports any activity aimed at fostering better ties among Muslim nations as a result.

Widodo, for his part, supported his Iranian counterpart’s request for an urgent OIC conference on Palestine in the hopes that it would strengthen ties between Muslim-majority countries.

The OIC General Secretariat announced shortly after the call that an urgent, extended meeting of the Executive Committee at the level of Permanent Representatives would be held on Saturday at the OIC’s Jeddah headquarters to discuss the incursions and assaults committed by Israeli occupation forces against the al-Aqsa Mosque and its worshippers.

Israeli troops attempted to drive Palestinian worshipers from the holy site on Wednesday by firing rubber bullets and grenades during their second consecutive raid on the location. In reaction, worshipers flung items at the Israeli soldiers.

At least six individuals were hurt in the most recent flare-up, according to the Palestine Red Crescent Society.

Concern and dismay about Israeli soldiers’ invasions inside the mosque have been voiced by the UN, Iran, Turkey, and several other nations and organizations.

Images showing Israeli security personnel abusing individuals at the Al-Aqsa Mosque surprised and disgusted UN Secretary General Antonio Guterres, his spokesperson said on Wednesday.

According to Stephane Dujarric, Guterres found it particularly upsetting because the violence and beating took place during a time of a calendar which is holy to Jews, Christians, and Muslims that should be a time for peace and nonviolence.

He said, “Places of worship should only be utilized for lawful religious practices.”

Iranian Foreign Minister Hossein Amir Abdollahian criticized Israel for defiling the Al-Aqsa Mosque and asserted that the tide of Islamic world unity has bewildered the Israelis.

In a tweet on Thursday, he said, “The desecration of al-Aqsa Mosque by Israeli forces and their night raid on worshipers of the holy site created painful scenes that are the result of the behavior of human rights advocates who turn a blind eye to Zionism’s crimes.”

 

 

 

 

 

 

Indonesia to suspend palm oil export permits

Indonesia will suspend some palm oil export permits to secure domestic supply amid rising cooking oil prices ahead of upcoming Ramadan, senior cabinet minister Luhut Pandjaitan said on his official Instagram account on Monday.

Palm oil exporters had accumulated large shipment quotas last year and they now had little incentive to supply the domestic market, he said.

Indonesia issues export permits for palm oil companies that have already sold a proportion of their products to the domestic market, under a policy known as Domestic Market Obligation (DMO).

The DMO currently allows export volumes that are six times what companies have sold at home.

"Exporters can use those export rights after the situation has calmed," said Luhut, Coordinating Minister for Maritime Affairs and Investment.

Firman Hidayat, an official at the same ministry, said about a third of existing export quotas could be used now, while the rest could be used after May 01, 2023.

He added exporters were holding around 5.9 million tons worth of export permits at end of January.

Exporters could increase their quota when they raised supplies to the domestic market, he said.

Retailers have complained that cooking oil packages at lower prices have been hard to procure and they have been forced to sell them above the regulated price of 14,000 rupiah (US$0.93) per litre.

The Trade Ministry last month said palm oil companies had been ordered to increase domestic supply to 450,000 tons per month until April, up from roughly 300,000 tons per month previously.

Food prices typically rise ahead of the Islamic month of Ramadan and the Eid al-Fitr celebration which falls in April this year.

Sahat Sinaga, chair of the Indonesia Palm Oil Board, said companies have been holding back exports, due to lower global market prices and high export levies. With little urgency for exports, companies were also not encouraged to meet their DMO.

Malaysian benchmark palm oil prices have fallen more than 40% since reaching a peak last year. Meanwhile, Indonesia resumed imposing export levies in November.

Sahat blamed distributors for the tight supply in the domestic market.

"This is a difficult situation, but everybody must work together. Distributors should not take advantage of the situation," he said.

Rattling global edible oil markets, Indonesia last year banned exports of palm oil used in everything from margarine to cosmetics and fuel for three weeks due to soaring cooking oil prices.

But palm oil prices have since fallen back sharply to stabilize at lower levels as the outlook is now less certain with energy prices off their highs and fears over a global recession.

Malaysia's palm oil futures market was closed on Monday for a public holiday.

Indonesia confirms ban on bauxite export

Indonesian President Joko Widodo has confirmed an export ban for bauxite starting in June 2023 to encourage domestic processing of a material used as the main ore source of aluminium.

The resource-rich nation has surprised markets with its commodity exports policies, including brief but controversial bans earlier this year on shipments of palm oil and coal, of which Indonesia is the world's biggest exporter.

It is also among the world's top suppliers of bauxite, with China its key buyer. The timing of Indonesia's ban, however, is in line with its current mining law.

The president said the bauxite ban aimed to replicate Indonesia's success in developing its nickel processing capacity after halting exports of its raw form in January 2020, which enticed foreign investors, mostly from China, to build local smelters.

The measure, which led to a dispute at the World Trade Organization (WTO), also helped boost the value of Indonesia's exports.

"The government will remain consistent in implementing down streaming so the value add can be enjoyed domestically for the country's development and people's welfare," said Widodo, who is popularly known as Jokowi, emphasizing the importance of jobs creation.

China was the biggest importer of Indonesia's bauxite until Jakarta introduced a mineral export ban in 2014, which it lifted in 2017.

According to Wen Xianjun, a former head of the aluminium department at the China Nonferrous Metals Industry Association, Indonesia's 2014 ban prompted China to boost its efforts to develop aluminium resources in Africa instead.

"Compared with then, China's imports of bauxite are more diversified now," Wen said.

China imported 17.8 million tons of Indonesian bauxite in 2021, and 17.98 million tons in the first 11 months of year 2022, about 15.6% of its total imports, according to customs data.

Lately, three-month aluminium futures contract on the London Metal Exchange rose 0.6% at US$2,386.50 a ton, while the most-traded aluminium contract on the Shanghai Futures Exchange was up 0.2% to 18,595 yuan a ton.

The announcement by Indonesia is not expected to have significant impact on prices.

"It won't cause any major supply headwind as Indonesia now only accounts for a relatively small share of China's supply, Guinea and Australia will immediately make up the lost volume (after the ban)," an aluminium trader at a large trading house in China said.

Indonesia has four bauxite processing facilities with 4.3 million tons of alumina output capacity, while more are under construction with collective capacity of nearly 5 million tons, said chief economic minister Airlangga Hartarto.

Indonesia's bauxite reserves are enough for up to 100 years production, he said.

The country's mining law also states exports of other unprocessed minerals such as copper will also be stopped. Jokowi did not specify the timing of shipment bans on the other materials.

He said there was a possibility that legal action could be pursued against Indonesia for banning bauxite exports, but it would not deter him.

The WTO last month ruled in favour of the European Union in a dispute on nickel ore exports, which Indonesia is appealing.

 

 

 

Indonesia plans using B35 biodiesel beginning 2023

Indonesia may start implementing a program to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from January, 2023, a senior energy ministry official said on Friday.

Currently the world's top palm oil producer, Indonesia uses B30, containing 30% palm oil-based fuel. The overall palm oil-based fuel allocation for 2023 is estimated at around 13 million kilolitres in 2023, he said. Indonesia's 2022 allocation was 11.03 kilolitres.

Indonesian President Joko Widodo told his cabinet earlier this week to prepare the mechanism to implement B35 amid expectations that the crude oil price would remain high next year.

"The B35 policy is taken in anticipation of rising world oil prices and to reduce imports, while on the other hand this policy also aims to increase the use of renewable energy," ministry official Dadan Kusdiana said.

Southeast Asia's largest and most populous country is among the region's top importers of fuel, but authorities said import bills have been slashed significantly since Indonesia started expanding the portion of palm oil in biodiesel.

The expectation of B35 implementation helped palm oil prices in Malaysia higher, although some market participants were disappointed the blend would be lower than the anticipated 40%.

The energy ministry has been running trials for biodiesel containing 40% of fuel made using palm oil.

"Ten out of 12 of the vehicles tested had completed the road test with no significant issue and next we will determine the specification for B35 biodiesel," Dadan added, referring to the B40 trials.

“Hopefully, the B35 program can be implemented starting January 2023."

Indonesia is testing two formulation of B40, the first is a mix of diesel with 40% fatty acid methyl esters (FAME) and the second a mix of diesel with 30% FAME mixed with 10% green diesel made of refined, bleached and deodorized palm oil (RBDPO).

 

Will the US allow Putin to attend G20 summit?

Indonesia is the host of G20 Summit scheduled in November this year. Presidents of three rival countries, Russia, China and Ukraine have been invited. Indonesian has been accepted as a bridge of peace.

Chinese and Russian leaders Xi Jinping and Vladimir Putin will attend the G20 summit in Bali in November, Indonesian President Joko Widodo told Bloomberg News on Thursday.

“Xi Jinping will come. President Putin has also told me he will come,” Jokowi, as he is popularly known, told the news agency.

The Chinese foreign ministry did not immediately respond to a Reuters request for comment. Indonesian presidential palace officials did not immediately respond to requests for comment.

Indonesia is chairing the Group of 20 major economies and has faced pressure from Western countries to withdraw its invitation to Putin over his country's invasion on Ukraine, which his government calls a "special military operation".

Jokowi has sought to position himself as mediator between the warring countries, and has travelled to meet both Ukrainian and Russian presidents. This week, Jokowi said both countries have accepted Indonesia as a "bridge of peace".

Leaders of major countries, including US President Joe Biden, are set to meet in Indonesia's resort island of Bali in November. Indonesia has also invited Ukrainian leader Volodymyr Zelenskiy.

 

 

Indonesian palm oil export ban sparks concerns in many countries

Reportedly, the prices of all types of edible oils such are expected to rise after Indonesia announced a surprise ban on export of palm oil. Major edible oils are already in short supply due to adverse weather and Russian invasion of Ukraine.

The move by Indonesia to pause exports has placed an extra strain on cost-sensitive consumers in Asia and Africa hit by higher fuel and food prices.

“Indonesia’s decision affects not only palm oil availability, but vegetable oils worldwide,” James Fry, Chairman of Commodities Consultancy LMC International, told Reuters.

Palm oil – used in everything from cakes and frying fats to cosmetics and cleaning products – accounts for nearly 60% of global vegetable oil shipments.

Top producer Indonesia accounts for around a third of all vegetable oil exports. It announced the export ban on April 22, 2022, until further notice, in a move to tackle rising domestic prices.

“This is happening when the export tonnages of all other major oils are under pressure: soya bean oil due to droughts in South America; rapeseed oil due to disastrous canola crops in Canada; and sunflower oil because of Russia’s war on Ukraine,” Fry said.

Rasheed JanMohd, chairman of Pakistan Edible Oil Refiners Association (PEORA) said, “Nobody can compensate for the loss of Indonesian palm oil. Every country is going to suffer.”

Vegetable oil prices have already risen more than 50% in the past six months as factors from labour shortages in Malaysia to droughts in Argentina and Canada – the biggest exporters of soyoil and canola oil respectively – curtailed supplies.

Buyers were hoping a bumper sunflower crop from top exporter Ukraine would ease the tightness, but supplies from Kyiv have stopped as a result of Russia’s invasion.

This had prompted importers to bank on palm oil being able to plug the supply gap until Indonesia’s shock ban delivered a “double whammy” to buyers, said Atul Chaturvedi, president of trade body the Solvent Extractors Association of India (SEA).

Importers such as India, Bangladesh and Pakistan will try to increase palm oil purchases from Malaysia, but the world’s second-biggest palm oil producer cannot fill the gap created by Indonesia, Chaturvedi said. Malaysia accounts for 31% of global palm oil supply, second after Indonesia’s 56%.

Indonesia typically supplies nearly half of India’s total palm oil imports, while Pakistan and Bangladesh import nearly 80% of their palm oil from Indonesia.

In February this year, prices of vegetable oils jumped to a record high as sunflower oil supplies were disrupted from the Black Sea region.

A state-backed Malaysian palm oil group said countries should pause or slow use of edible oil as biofuel to ensure adequate supply for use in food, warning of a supply crisis following Indonesia’s ban on palm oil exports.

Palm oil is also used as biodiesel feedstock. Indonesia and Malaysia make it mandatory for biodiesel to be mixed with a certain amount of palm oil – 30% and 20% respectively – and just last month said they remain committed to those mandates, despite higher palm prices.

Israel saves Pakistan face

According a Reuters news, Israeli Regional Cooperation Minister, Ofir Akunis said there were two main candidate countries to become the next to move towards normal ties with Israel. He did not name either but said one is in the Gulf and could be Oman but would not be Saudi Arabia. The other, further to the east, is a “Muslim country that is not small” but is not Pakistan, he said.

Asked if a fifth country could sign up before Trump steps down on 20th January 2021, Ofir Akunis told Israel’s Ynet TV, “We are working in that direction.”

 “I believe ... there will be an American announcement about another country that is going public with the normalization of relations with Israel and, in essence, with the infrastructure for an accord — a peace accord,” he said.

Israel is working towards formalizing relations with a fifth Muslim country, possibly in Asia, during US President Donald Trump’s term, an Israeli cabinet minister said on Wednesday. The White House has brokered rapprochements bet­ween Israel and the UAE, Bahrain, Sudan and Morocco this year.

Indonesia, the most populous Muslim country, said last week it would not recognize Israel as long as Palestinian statehood demands remain unmet. Malaysia has signalled a similar policy.

“Malaysia’s firm stance on the Palestinian issue will not change,” Deputy Foreign Minister Kamarudin Jaffar told the country’s senate on Wednesday, adding that Kuala Lumpur would not interfere in other nations’ decisions on Israel.

In Dhaka, a foreign ministry official said Bangladesh was not interested in establishing diplomatic ties with Israel. “Our position remains the same,” he reiterated.

Oman has praised the US-brokered diplomatic drive but has not commented on its own prospects of forging Israel ties.