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Facing COVID-19, Agriculture Ministry Reviews Alternative Export Markets for Plantation Commodities

03

Apr

Facing COVID-19, Agriculture Ministry Reviews Alternative Export Markets for Plantation Commodities

This step is taken in anticipation of the decreasing demand from China for exports of Indonesian plantation commodities in 2020. Kasdi explained that [...]

Facing COVID-19, Agriculture Ministry Reviews Alternative Export Markets for Plantation Commodities. This step is taken in anticipation of the decreasing demand from China for exports of Indonesian plantation commodities in 2020. Kasdi explained that this is because China is currently restricting the movement of goods from and to China. This restriction is implemented to prevent the spread of the Covid-19 pandemic caused by the corona virus. He added that in addition to focusing on increasing production, the Ministry of Agriculture will also seek alternative export destination markets. `This is a follow-up of the instructions from the Minister of Agriculture, Syahrul Yasin Limpo, that the agricultural sector must be the most resilient sector in facing various crises,` he said as quoted in a written statement received by Kompas.com on Thursday (March 2, 2020). It is known that this country nicknamed “The Bamboo Curtain” is one of Indonesia's largest trading partners in the export of plantation commodities. These commodities include palm oil, coconut, cocoa, rubber, coffee, tea, pepper, nutmeg, cloves, and cinnamon. Six strategies from the Ministry of Agriculture Furthermore, Kasdi said that his agency has prepared six main strategies to strengthen Indonesian plantation exports in the midst of the Covid–19 pandemic. The first strategy is trade lobby with new partner countries. This includes seeking direct exports for commodities that have previously been re-exported through China. `Secondly, we will conduct a lobby for import duty agreements in destination countries and provide bilateral trade facilitation, such as for sugar, vanaspati ghee and other commodities,` he said. Third, improve guarantees for quality, brand image, and ongoing product availability. The fourth strategy, continued Kasdi, is to seek increased trade cooperation for market access. This can be done by optimizing the use of Indonesian representatives abroad, accelerating ongoing cooperation, and of course developing new agreements. For example, he explained, based on his analysis, China's absorption for palm oil this year is predicted to decrease.`To anticipate this, we will encourage an increase in palm oil exports to India, Pakistan, and Bangladesh by 20 percent and to the United States by 5 percent,` he said. In addition, the export is also carried out to Tunisia, Turkey, Egypt, Algeria, Morocco and Iran which have increased by 10 percent. The target for domestic consumption is to increase by 5 percent. The fifth strategy, Kasdi continued, is that his party will increase domestic consumption, such as the B-30 program for Crude Palm Oil (CPO), rubber asphalt for rubber, coffee, coconut sugar, and other commodities. Then the sixth is the optimization of information and communication network services in an organized manner between business to business (B to B) and government to government (G to G). Meanwhile, for rubber exports in 2020, Kasdi said that he had prepared targets for an increase and alternative destination countries for rubber exports other than China.`We will encourage exports to Germany and France with a significant increase of 10 percent. The United States and Argentina by 10 percent, Japan and South Korea increased by 7.5 percent, South Africa up to 2.5 percent, and for domestic consumption we are targeting an increase of 5 percent,` he said.https://money.kompas.com/read/2020/04/02/122304826/imbas-covid-19-kementan-kaji-alternatif-pasar-ekspor-komoditas-perkebunan

April 2020 CPO Reference Price Down US$132

03

Apr

April 2020 CPO Reference Price Down US$132

In the Regulation of the Minister of Trade No. 29/2020 concerning the Determination of Export Reference Price (HPE) for Agricultural and Forestry [...]

April 2020 CPO Reference Price Down US$132. In the Regulation of the Minister of Trade No. 29/2020 concerning the Determination of Export Reference Price (HPE) for Agricultural and Forestry Products Subject to Export Duty, the CPO reference price was set at US$653.76 per ton.
The reference price fell by 16.89 percent or around US$132.87 compared to the reference price for the period of March 2020, which was at US$786.63 per ton.
"Currently, the CPO reference price is at a level below US$750 per ton. For that reason, the government imposed an export duty for CPO of US$0/ton for the period of April 2020," said the Director General of Foreign Trade of the Ministry of Trade, Indrasari Wisnu Wardhana, as quoted from a press release received by Bisnis, Friday (27/3/2020).
The CPO export duty for April 2020 is listed in Column 1, Appendix II, Letter C of the Regulation of the Minister of Finance No. 13/PMK.010/2017 amounting to US$0 per ton. This value decreased from the previous month's CPO export duty for the period of March 2020, which was US$3 per ton.
Meanwhile, the reference price for cocoa beans in April 2020 was at US$2,589.37 per ton, down by 8.12 percent or US$228.74 compared to March, which was at US$2,818.11 per ton.
This resulted in a decrease in the HPE for cocoa beans in April 2020 to US$2,299 per ton, down by 8.88 percent or US$224 from the previous period, which was at US$2,523 per ton.
Wisnu explained that the decrease in the reference price and HPE for cocoa beans was caused by the weakening of international prices.
This decrease had an impact on the cocoa bean export duty, which fell to 5 percent (last month's period was 10 percent). This is stated in column 2, Appendix II, Letter B of the Regulation of the Minister of Finance No. 13/PMK.010/2017.
Meanwhile, for the HPE and export duty of wood and leather products, there were no changes from the previous month's period. The export duty for wood products and leather products is stated in Appendix II, Letter A of the Regulation of the Minister of Finance No. 13/PMK.010/2017.
https://ekonomi.bisnis.com/read/20200327/12/1218899/ditetapkan-us65376-harga-referensi-cpo-april-2020-turun-16

State-Owned Plantation Company Embraces Covid-19 Prevention Protocols

26

Mar

State-Owned Plantation Company Embraces Covid-19 Prevention Protocols

This coronavirus prevention protocol applies to the head office and all subsidiaries in Indonesia and is also disseminated to workers on the [...]

State-Owned Plantation Company Embraces Covid-19 Prevention Protocols. This coronavirus prevention protocol applies to the head office and all subsidiaries in Indonesia and is also disseminated to workers on the plantation/unit. Human Resources Director of PT Perkebunan Nusantara III (Persero) Wing Antariksa explained that the protocol was prepared in the early period of the outbreak of the Covid-19 pandemic in the world, following the government's official statement confirming that there were patients infected with Covid-19 in Indonesia. His party prepared hand sanitizers that could be accessed by employees at any time, sprayed disinfectants in the office environment, and implemented a Work from Home (WFH) policy that was carried out alternately for a period of 2 weeks since March 16, 2020, at the head office in Jakarta. “Employees who are found to be unwell, pregnant, over 50 years old, and employees who use public transportation are allowed to work from home,” said Wing Antariksa in a statement, Monday (23/3/2020). This BUMN also enforces a protocol for receiving guests visiting the office by checking the body temperature of each guest and washing hands before entering the office location, reducing face-to-face meetings with customers and external stakeholders using video conferencing methods and correspondence administration via the company email. He said that the preparation of this protocol is actually inseparable from an overall analysis of the impact of the spread of the Covid-19 virus, including the company's operations. Its implementation is carried out carefully so as not to disturb the comfort of customers, guests, and employees. His party has also issued a circular letter urging all employees, especially in the Jakarta office, to carry out social distancing, including by implementing a policy for employees to work at home. He also appealed to employees and workers in the plantation area not to panic and overreact but to always keep abreast of the latest information.   https://www.topbusiness.id/32528/holding-bumn-perkebunan-terapkan-protokol-pencegahan-covid-19.html

26

Mar

Ahead of Ramadan, CPO Price Rises 1.4%

On Tuesday (17/3/2020), the price of CPO for the 3-month delivery contract at Bursa Malaysia Derivatives (BMD) rose 1.44% compared to yesterday's [...]

Ahead of Ramadan, CPO Price Rises 1.4%. On Tuesday (17/3/2020), the price of CPO for the 3-month delivery contract at Bursa Malaysia Derivatives (BMD) rose 1.44% compared to yesterday's closing position. CPO is now traded at RM 2,252 per tonne.Currently, the price of CPO has indeed collapsed when compared to its price early last year. The CPO price is recorded to have decreased by 26.2% year to date (ytd). The triggers are indeed many, ranging from the conflict between Malaysia and India to the latest sentiment of the COVID-19 pandemic.
`The price of palm oil has plummeted due to a disruption in demand in the European Union and the Middle East when the number of cases of COVID-19 infection in those countries has increased and become a risk that has impacted demand,` said Anilkumar Bagani, a head of commodity research at the Sunvin Group.Malaysian palm oil exports for the period 1-15 March fell between 1.8% and 9.6% compared to the previous month based on a survey conducted by cargo surveyors.Because its price has fallen sharply, CPO has begun to be eyed by traders. Especially because next month (April) is the start of Ramadan. Usually during fasting, consumption increases and this drives up demand for palm oil. This has become one of the positive sentiments for CPO, and so has the potential to raise the price.However, due to the COVID-19 pandemic

Here Are 6 Potential Impacts of COVID-19 on the Agriculture Sector

26

Mar

Here Are 6 Potential Impacts of COVID-19 on the Agriculture Sector

But what about the agricultural sector? According to Agriculture.com, Mark Stephenson and Dr. John Shutske of the University of Wisconsin-Madison say [...]

Here Are 6 Potential Impacts of COVID-19 on the Agriculture Sector. But what about the agricultural sector?
According to Agriculture.com, Mark Stephenson and Dr. John Shutske of the University of Wisconsin-Madison say there are six specific things farmers, farm families, agribusinesses and employees should be watching and planning for.
1. Commodity and farm prices. 
As we see increased levels of concern, recommendations for “social distancing,” reducing travel, avoiding crowds, and closures and other protective practices to slow the spread of COVID-19, consumers will make difficult choices about food, eating out, and overall spending. 
Dairy products are prominently featured in food away from home, and there could be some disruption in food service sales. That will likely impact markets and prices. There are also backups at ports in other countries as ships wait to be unloaded with U.S. dairy products and other agricultural commodities. The Chicago Mercantile Exchange has closed all trading floors until “further notice,” though electronic trading will continue.
Concerns about the impact of the virus on the broader economy are likely to have a bigger impact on milk prices. Many countries in the European Union were already flirting with recession before the virus outbreak, and these events will likely push them over the edge. China was also experiencing slower economic growth before these events. 
The U.S. has enjoyed strength in the economy, but there were leading indicators before the pandemic concerns that suggested we were past the peak of the business cycle and that an economic slowdown, or possibly even a recession, was coming. A worldwide recession, like the one experienced in 2008-09, would push out the expected recovery in milk prices by at least another year.
2. Slowdowns and shortages in supply chains. 
As logistics are disrupted and efforts continue to slow the spread of the virus, sectors across industries that are interconnected are already being impacted. With some products, “panic buying” is creating additional concerns. As an example of a supply chain disruption in agriculture, the American Veterinary Medical Association (AVMA) is advising that there could be potential shortages of animal pharmaceuticals from at least some of the larger drug manufacturers. If the virus spreads more broadly in agricultural states like Wisconsin, we could see issues with the delivery and pickup of farm products as workers – milk truck drivers, for example – stay home because they are sick or because they are caring for sick family members or school-age children. The same concerns would affect processors. Slowdowns could also impact fertilizer, fuel and other input deliveries, and availability as we head into spring. In extreme cases, there could be issues with utilities – electricity, natural gas, propane – based on input availability or workforce shortages. However, utility companies generally do a good job of contingency planning that should help protect against the impacts of unforeseen events.
3. Farmer health. 
Across the Midwest, farmers are a relatively older population, compared to the general working population. The 2017 Ag Census shows the average age of farm operators is nearly 58 – at least a decade older than workers in most other sectors. And, unlike workers in other industries, 26% of farm operators are 65 years of age or older. A full 11.7% of principal U.S. farm operators are 75 years of age or older. 
Data from other countries that have done more widespread testing suggest that COVID-19 has a much higher severity rate for those in their 60s and older, meaning the prevention and protection recommendations from the CDC and state (and local) public health experts are especially important for the farm population in the U.S.
4. Farm labor. 
Even if the infection rate in the general population remains relatively low, it is likely we will see some workers who eventually get sick. But perhaps more importantly, even if infection rates remain low (in the single digits), it is very likely that workers will need to be off work, especially with school closures and/or workers needing to stay home to care for sick or elderly family members. Fear of those occurrences and misinformation can also lead to higher absenteeism.
5. Worker safety and personal protective equipment (PPE). 
There are shortages of PPE and other protective gear that are vital to safely operating farms and keeping workers and animals healthy. As a result of current demand by the health care industry, N-95 respirators are in very short supply (likely needed this spring to handle dusty grain as a result of less than ideal harvest conditions last fall). There are also reports of concerns about the availability of protective gloves that are now common on dairy operations as a way to protect milk quality and protect animal and human health.
6. Other disruptions.
Sparse populations and less frequent travel may provide some natural social distancing for rural communities, but there are challenges that rural residents may face. Many gathering places, such as schools and churches, are closed and normal routines and events have been disrupted. Instead, in some areas and for high school and college students, classes and services are being taught and conducted online. This could be difficult for some rural residents, as high-speed internet service is not available in all areas of the country, including some of our communities with strong agricultural bases.
Only time will tell the severity of the impact on agriculture from the novel coronavirus, Stephenson and Shutske say. They urge everyone to take reasonable precautions to limit the spread of the disease and its impacts on your business and your life. They say stockpiling farm supplies is not recommended and can cause bigger problems for the industry, and that thoughtful purchasing of needed inputs can minimize disruptions to your operation. Stay informed, listen to experts, and follow the recommendations from federal, state, and local agencies and authorities.

Palm Oil Exports Decline Sharply in February Amid Coronavirus Outbreak

26

Mar

Palm Oil Exports Decline Sharply in February Amid Coronavirus Outbreak

"Palm oil export which has been the biggest contributor, in February 2020, the realization was only 84,000 tons. In the same period in 2019, it [...]

Palm Oil Exports Decline Sharply in February Amid Coronavirus Outbreak. "Palm oil export which has been the biggest contributor, in February 2020, the realization was only 84,000 tons. In the same period in 2019, it reached 371,000 tons," said Minister of Agriculture Syahrul in a Hearing Meeting at Commission IV of the House of Representatives (DPR) Jakarta, Monday (17/2/2020).
Palm oil export data in February 2020 was recorded only at 84,000 tons, plummeted around 77.27 percent compared to the same month in 2019 which was 371,000 tons. Compared to data from the previous month, palm oil export in February 2020 drastically decreased by 82.56 percent from the January 2020 export realization of 483,000 tons.

https://www.inews.id/finance/makro/akibat-virus-korona-ekspor-kelapa-sawit-pada-februari-turun-tajam
However, on a year on year basis, January 2020 export increased by 3 percent from January 2019 which was recorded at 469,000 tons. Therefore, the Ministry of Agriculture strives to anticipate the decline in agricultural export to China by seeking and utilizing other markets that are also potential.
"Ministry of Agriculture strives to anticipate the decline in agricultural export to China through coordination with exporters to utilize alternative export markets such as India, Middle East, and Russia," said Syahrul.
Meanwhile, export decline to China also happened in other plantation commodities, such as coconut that dropped by 4.71 percent from 24,000 tons in January 2020 to 23,000 tons in February 2020.
Other plantation commodities fell by 46.46 percent from 42,000 tons in January 2020 to 22,000 tons in February 2020. In total, plantation commodities in February 2020 compared to January 2020 dropped by 74.17 percent, while that of February 2020 compared to February 2019 decreased by 65.26 percent.

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