CARI Captures Issue 608: The world’s top LNG exporters in 2022 (million tonnes)

Indonesia considering new limits on exports of liquefied natural gas to ensure adequate domestic gas supply
(31 May 2023) According to Indonesia’s deputy coordinating minister for maritime sovereignty and energy, the Indonesian government is considering new limits on the export of liquefied natural gas (LNG) in order to ensure adequate domestic supply. This would be an extension of trade curbs on other commodities including nickel, coal, and palm oil. Authorities have defended the planned curbs as necessary to meeting domestic energy needs, encouraging domestic industry growth, and maintaining existing export commitments. In 2022, Indonesia was the sixth largest LNG exporter in the world. Under the planned curbs, new LNG export contracts or renewals of existing agreements could be prohibited to prioritize the needs of domestic consumers, while existing contracts wouldn’t be impacted. Indonesia is also expanding its gas output in order to meet local demand as well as provide additional volumes for exports.

Indonesia challenging Thailand for auto manufacturing hub of Southeast Asia
(28 May 2023) Indonesia is seeking to overtake Thailand as the auto production hub of Southeast Asia by leveraging its rich nickel resources to capitalize on a global shift to electric vehicles (EVs) and other new energy vehicles. Nickel is a crucial material for EV batteries, with investment into Indonesia’s nickel reserves increasing rapidly. Thailand’s auto production has been steadily declining since a 2013 peak of 2.45 million vehicles, having dropped to 1.88 million in 2022, a decrease of 23%. Meanwhile, auto production in Indonesia increased by more than 30% over the same span, reaching 1.47 million units in 2022, close to 80% of Thailand’s output in the same year. The figure could reach 1.6 million units in 2023. Indonesian production of passenger cars had already overtaken that of Thailand in 2014, and it has recently doubled its rival’s output. The Indonesian government has sought to promote EVs in Indonesia through government policy, such as reducing the value-added tax on some EVs from 11% to 1% starting in April 2023. The government aims to promote domestic production along with sales by limiting eligibility to EVs made with at least 40% domestic components.

Foreign selling of Malaysian equity narrows to US$12.7 million during fifth week of outflow
(29 May 2023) Foreign selling of Malaysian equity narrowed to US$12.7 million during the fifth consecutive week of outflow. According to MIDF Research, foreign investors net bought US$2.2 million on 22 May and US$9.2 million on 26 May, but were net sellers from 23 May to 25 May. Foreign investors have been net sellers for 15 out of 21 weeks in 2023, with a total net foreign outflow of US$531.9 million. The top three sectors that saw net foreign inflows were transportation and logistics, technology, and telecommunication and media, while the top three sectors that saw net foreign outflows were financial services, consumer products and services, and REITs. In terms of participation, there was an increase in average daily trading volume (ADTV) across the board, with a 1.4% increase in trading volume by retailers, a 12.6% increase by local institutions, and an 18.2% increase by foreigners.

Singapore faces high risk of technical recession in second quarter of 2023
(26 May 2023) According to private-sector economists, Singapore faces a high risk of entering a technical recession in the second quarter of 2023 due to a challenging external environment. Official data from the first quarter showed that the economy declined 0.4% from the previous three-month period on a quarter-on-quarter seasonally adjusted basis. The economy had expanded by 0.1% in the fourth quarter of 2022. A technical recession is defined as two consecutive quarter-on-quarter contractions. Singapore had last entered a technical recession in the second quarter of 2020. On a year-on-year basis, the economy grew by 0.4% year-on-year in the first quarter, a slight slowdown from the 2.1% growth seen in the previous quarter. Singapore’s economy is heavily reliant on trade, meaning it has been impacted by weakening external demand due to a slowdown in the global economy, still-strong inflationary pressures and a downturn in the global semiconductor industry.

Government plans to make Kuala Lumpur regional hub for startups and digital industries
(29 May 2023) The Malaysian government plans to make Kuala Lumpur a regional hub for startup companies and digital industries in an effort to boost the country’s digital economy. Malaysia’s Economy Minister noted that the digital economy is one of the three high-value strategic sectors that the government is currently focusing on, alongside renewable energy and food security. The Ministry of Economy is currently collaborating with other ministries involved in the digital economy ecosystem including the Ministry of Science, Technology and Innovation, the Ministry of Communications and Digital, and the Ministry of Investment, Trade and Industry, in order to boost the digital economy. To position Kuala Lumpur as a center for the regional digital economy, the government is pushing for aggressive policy changes including consolidating the efforts of government agencies, creating a more efficient and open work visa process, implementing more attractive digital incentives, and producing a workforce suited for the digital economy.

Viet Nam’s exports contract for fourth month so far in 2023 amidst global slowdown
(29 May 2023) According to the General Statistics Office in Hanoi, Viet Nam’s exports contracted for a fourth month so far in 2023 amidst a global economic slowdown. Exports declined by 5.9% in May 2023, while imports shrank 18.4%. These numbers added to risks of a growth slowdown in an economy already dealing with a crisis in the local property sector. Meanwhile, headline inflation in May rose by 2.43% year-on-year, the lowest level in 14 months. Meanwhile, core inflation, which excludes the costs of food, fuel, health-care and education services, came in at 4.54%. Slowing inflation has given Viet Nam’s central bank room to reduce borrowing costs to support businesses, including builders, thereby helping spur economic activity. The State Bank of Vietnam bank has cut key policy rates three times in 2023.

Viet Nam plans to cut down annual rice exports to four million tonnes by 2030
(27 May 2023) Viet Nam plans to cut down annual rice exports to four million tonnes a year by 2030, down from 7.1 million tonnes in 2022. According to the government strategy, the move is aimed at boosting the exports of high-quality rice, ensuring domestic food security, protecting the environment and adapting to climate change. As part of the government move, rice export revenue will fall to US$2.62 billion a year by 2030, down from US$3.45 billion in 2022. Viet Nam also intends to diversify its rice export markets to reduce its reliance on any country. The Philippines has traditionally been Viet Nam’s largest rice buyer, accounting for 45% of its shipments in 2022. As part of the government strategy, by 2025 60% of Vietnamese rice exports will be shipped to Asian markets, 22% to Africa, 7% to American markets, 4% to the Middle East and 3% to Europe.

RCEP Monitor

The Philippines’ largest coal miner to make second trial shipment to Japan to reduce reliance on China
(01 June 2023) The Philippines’ largest coal miner, Semirara Mining and Power, plans to make a second ‘trial shipment’ of coal to Japan in June 2023 in order to reduce its reliance on China. Semirara plans to export 50,000 tonnes of coal to Shikoku Electric Power for the utility’s 700-megawatt generating plant. This would follow the maiden trial in January 2023, when the company sold 78,410 tonnes of mid-grade coal to J-Power. With China’s industrial output growth slowing, Semirara seeks to develop its exports to other Asian markets. Semirara said its coal shipments to China plunged by 50% from January to March 2023 to 1.1 million tonnes, accounting for 72% of exports. Shipments to South Korea remained steady at 300,000 tonnes, or a fifth of overseas sales. The rest went to Japan and Brunei Darussalam, representing 5% and 3% of exports, respectively. Semirara’s output makes up 99% of the Philippines’ total coal production.

South Korean exports fell for an eighth straight month in May 2023 in annual terms
(01 June 2023) South Korea’s exports fell for an eighth straight month in May 2023 in annual terms, with overseas sales falling 15.2% year-on-year to US$52.24 billion in May, compared with a drop of 14.3% in April 2023 and a 16.8% decline tipped in a Reuters survey. This is the longest run of year-on-year declines since January 2020, and has been mostly caused by weak demand for semiconductors. On a month-on-month basis, the total value of exported goods was higher than April’s US$49.58 billion. South Korea’s Trade Minister noted that the country’s trade balance is likely to improve significantly in June. In May, imports fell 14% to US$54.34 billion, faster than the 13.3% decline seen in April and the fastest since August 2020. This brought the country’s monthly trade balance to a deficit of US$2.10 billion in May. It was the 15th month in a row that South Korea’s economy suffered a trade deficit but the smallest amount since May 2022.

Inflation in Australia advances by 6.8% year-on-year in April 2023 driven by higher fuel and housing prices
(31 May 2023) Inflation in Australia advanced by 6.8% in April 2023, driven by higher fuel and housing prices. This was an increase from the 6.3% year-on-year increase seen in March 2023, and put to an end three months of cooling. This latest data has raised expectations that the Reserve Bank of Australia (RBA) will hike rates further in its next meeting on 06 June, 2023. The RBA has raised rates by 3.75 percentage points over the past year to take the cash rate to an 11-year-high of 3.85%. These rate increases have driven a slowdown in consumer spending and employment growth, with recent business surveys pointing to weaker conditions. This jump in inflation was attributed to the end of a temporary government fuel subsidy, while other significant contributors included housing, up 8.9%, food and non-alcoholic beverages, up 7.9%, and transport, up 7.1%.

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