Risk of disruption to coal and palm oil supplies from Indonesia.

Indonesia, one of Vietnam's major suppliers of coal and palm oil, is preparing to implement a state-owned enterprise monopoly mechanism for exporting these strategic commodities.

According to information from the Vietnam Trade Office in Indonesia, on May 20th, speaking before the Indonesian House of Representatives, President Prabowo Subianto announced that the country will implement a state-owned enterprise policy to monopolize the export of coal, crude palm oil (CPO), and several strategic minerals through the establishment of specialized export-oriented state-owned enterprises.

Indonesia is one of Vietnam's major suppliers of coal and palm oil. (Illustrative image.)

According to Indonesian leaders, the new policy aims to strengthen national resource management, limit revenue losses, and enhance government control over the pricing of exported goods. He argued that Indonesia needs a greater role in controlling the value of its resources instead of depending on fluctuations from external markets.

Indonesia is currently one of the world's largest exporters of thermal coal and palm oil. Therefore, any changes in its export management policies could impact global commodity markets, especially in the Asian region, including Vietnam.

According to Reuters , Indonesia plans to implement a transition roadmap within approximately three months and bring the export of strategic resources under state control.

During the transition period, the transaction mechanisms between Indonesian export businesses and international customers may change significantly, involving approval processes, pricing mechanisms, delivery times, and the implementation of existing contracts.

For Vietnamese businesses, coal and palm oil from Indonesia remain important raw materials for many manufacturing sectors. Therefore, changes to the export mechanism could lead to short-term supply disruptions or fluctuations in input costs if transaction procedures are lengthy and commodity prices increase.

In the energy sector, fluctuations in imported coal supply could put additional pressure on the costs of fuel-intensive industries such as thermal power, cement, and manufacturing. Meanwhile, palm oil is a widely used ingredient in the food, cooking oil, and consumer goods industries, so price movements of this commodity could also affect the production costs of domestic businesses.

The Vietnam Trade Office in Indonesia advises importing businesses to review all existing contracts, proactively work with Indonesian partners and relevant parties such as banks, insurance companies, and inspectors to ensure contract execution during the policy transition period.

The agency also recommended that businesses regularly update themselves on new regulations from Indonesia, closely monitor market developments, and develop plans to diversify supply sources to reduce the risk of dependence on a single import market.

Experts believe that Indonesia's move reflects a trend of increasing control over strategic resource commodities in many major exporting countries. Given the continued volatility in the global commodity market, Indonesia's policy changes could further impact coal and palm oil prices in the coming period.

Source: https://nongnghiepmoitruong.vn/nguy-co-dut-nguon-cung-than-dau-co-tu-indonesia-d812943.html