Upward trend in coal prices expected to continue
The upward trend of coal prices is expected to continue until the year end and exporters are hoped to utilize the momentum in order to help increase the Indonesia`s foreign exchange.
Rendra Prasetya Kiswono of the Coordination Function Analysis and Policy Commission of Bank Indonesia for South Sumatra said that coal prices were on the rise in response to the increase in world demand for the commodity.
The high demand for coal in the world market is in line with the onset of the winter season in mainland China. China needs adequate coal supply to generate six power plants in the face of the temperature below zero Celsius degrees.
“The price of coal is good at this time, so we recommend that this moment be used to increase the volume of exports,” he stated at a capacity building training for South Sumatra`s economic reporters organized by Bank Indonesia (BI) or the central bank.
He noted that this moment was also used by exporters, especially from South Sumatra, because it proved to be able to boost the regional economy.
Thanks to the increase in coal prices since April 2018, the share of the mining and quarrying sector in South Sumatra was positive, reaching 19.90 percent of GDP, or the highest contributor to the GDP, followed by the processing industry at 19.63 percent, and agriculture at 15.15 percent in the third quarter.
The improvement in export performance contributed to the economic growth of South Sumatra in the third quarter, which recorded 6.14 percent, in addition to other factors, namely household consumption and government consumption.
“So far, assuming that coal prices continue to stay high until the end of the year, BI is optimistic that South Sumatra`s economic growth is in the range of 5.8 to 6.2 percent,” he remarked.
In 2018, South Sumatra`s total coal production is estimated to be at around 48.5 million tons or 9 percent of national production.
Source: ANTARA NEWS