Trade Indonesia: Exports Resource-Rich East Kalimantan Plunge
Indonesia's commodity-rich East Kalimantan is one of the worst affected Indonesian provinces in terms of global trade and weak commodity prices. East Kalimantan's export performance is heavily dependent on prices of oil, natural gas and coal. In 2015 the total value of East Kalimantan's exports plunged 30.4 percent year-on-year (y/y) to USD $18.3 billion from USD $26.35 billion in the preceding year. Since 2011 the province's exports have posted a consecutive annual decline in line with the declining trend of commodity prices.
East Kalimantan's oil & gas exports fell 41.1 percent (y/y) to USD $6.3 billion in full-year 2015 amid the dramatic decline in global crude oil prices, while East Kalimantan's non-oil & gas exports fell 22.9 percent (y/y) to USD $11.94 billion. Declining non-oil & gas exports are particularly caused by the low coal price. China - the world's biggest energy consumer - has drastically reduced coal imports from Kalimantan as it is eager to use more environment-friendly energy sources and shifted its focus from East Kalimantan to Australia for coal shipments as Australian thermal coal is of higher quality (due to the higher calorie content). The third reason why coal shipments from East Kalimantan to China have fallen is because China has been developing its domestic coal mining industry.
Mining commodities account for 86.10 percent of East Kalimantan's total export, followed by chemicals (5.69 percent), processed wood products (3.63 percent), and agricultural products (2.95 percent). The remainder mainly consists of fishery products and metals.
Meanwhile, imports into East Kalimantan also plunged in 2015. According to the latest trade data, imports into the province fell 34.61 percent to USD $5.5 billion as imported goods are typically goods used for the production of export products (for example machinery equipment). Therefore, declining exports will automatically lead to declining imports.
With little hope to see rebounding commodity prices in the short or middle term, local authorities see only one strategy to boost exports, i.e. reduce the province's reliance on raw commodity exports through the development of downstream industries. However, this will not be an easy process and will require (tax) incentives from the government.
Trade Balance East Kalimantan:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Export (in billion USD) |
36.5 | 33.8 | 30.9 | 26.4 | 18.3 |
| Import (in billion USD) |
6.3 | 8.1 | 9.4 | 8.4 | 5.5 |
| Balance (in billion USD) |
30.2 | 25.6 | 21.4 | 17.3 | 12.8 |
Source: Bisnis Indonesia