Astra Agro Lestari (AAL) President Director Djap Tet Fa expressed optimism that the palm oil industry will continue to move positively amid the trade war, triggered by the US government’s tariff policy.
“If we talk about the trade war between China and the US as we have seen, I think there will certainly be short-term and long-term impacts,” he said, quoting the Company’s Public Expose Report, Jakarta, Monday.
He explained that for the palm oil industry itself, according to GAPKI records, Indonesia’s exports to the US for palm oil products are around two million tons annually.
So, in total, Indonesia’s exports to the US are not too large, and according to him, this impact could lead to geographical shifting and market destinations.
“Because we know there will be a supply-demand impact (the influence of changes in supply and demand), when demand continues to grow and then supply is limited,” he said.
This is due to Malaysia having quite a lot of palm oil besides Indonesia, and it can be concluded that the impact that must be considered is indirect, because it is caused by high tariffs.
Economically, there will still be high inflation in several countries both in China and in the US, so that high inflation will still be feared to disrupt economic growth both in the affected countries and globally.
“If economic growth is affected, then what we are worried about is the decline in purchasing power,” he said.
On the other hand, his party sees that the Indonesian government is also very careful and quick in handling this issue.
“I think we both hope that the escalation of this trade war will not have a big impact, because, of course, a tariff war will not be positive for any country,” he said.
According to him, the reason the palm oil industry will remain positive is that China will definitely find it difficult to import soybeans (soybean oil) from the US because the price will become expensive.
Although China may be able to relocate demand or imports from the US, be it Brazil or Argentina, it must also consider the supply and delivery side to get to China on time.
Palm oil will be a positive option for China because China has been importing a large amount of it from Indonesia.
“This makes us feel quite confident that there will be a shift that we expect, when economic growth remains good so that demand will always be there,” he explained.
Meanwhile, the direct impact on the company AAL can be said to be minimal or non-existent because it does not export to the United States, and exports so far have been a lot to China, India, South Korea, Bangladesh, and others.
Source: Kalsel Antara News
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