06 February 2025 Tradeviews
Macro Economic
The Indonesian government will require mineral resource exporters to hold all proceeds onshore for at least one year for cargoes worth at least $250,000 starting from March 1. The move is expected to boost Indonesia’s foreign exchange reserves by $90 billion a year and support the local currency. Under existing rules, exporters are required to retain 30% of such proceeds domestically for three months. The government is offering exporters term deposits free from capital gains tax. However, the head of the Indonesian Mining Association said that even the current retention level has disrupted cashflow. Companies exporting Indonesian coal and nickel will be impacted.
The US Trade Representative launched a probe into China’s dominance of the global maritime, logistics and shipbuilding sectors in April 2024 at the request of a group of US unions. In the final days of the Biden administration, investigators have reportedly concluded that China has used unfair policies and practices giving the US grounds for imposing penalties. This could include higher tariffs or port fees for Chinese-built vessels, as advocated by the US unions who want to see a revival in US shipbuilding. We await further developments from the incoming Trump administration. Suffice it to say that there is the possibility for serious disruption to shipping markets and trade.
Agriculture
Brazil’s agricultural sector is expected to produce a record 322.3 million tonnes of grains, pulses and oilseeds in the 2024/25 season, up 8.2% year-on-year, according to the National Supply Company, Conab. This includes more than 166 million tonnes of soybeans, up over 11% on the previous harvest. Maize production is expected to reach 119.6 million tonnes, up 3.3%, while rice output is forecast at 11.99 million tonnes, an increase of 13.2%.
The European Commission has adopted a proposal to impose tariffs on more agricultural products and certain nitrogen-based fertilisers from Russia and Belarus. The EU increased tariffs last year on grain from both countries and said that new tariffs will apply to the 15% of agricultural imports that had yet to be subject to increased duties.
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