News

The government announced that it would allocate Rp 7 trillion to subsidize the purchase and conversion of electric motorbikes over the next two years. The incentives for electric motorbikes have now entered into force. According to Finance Minister Sri Mulyani, each unit of brand new electric two-wheelers and a converted e-motorbike that originally ran on combustion engines will get a subsidy of Rp 7 million. These subsidies will be in effect for 2023-2024, and will only apply to a million electric motorbikes. Next year, 600,000 brand-new electric two-wheelers and 150,000 converted fuel-powered motorbikes are expected to get the subsidies. The government has budgeted Rp 5.25 trillion for the e-motorbike incentive rollout in 2024. Industry Minister Agus Gumiwang earlier this month named Gesits, Volta, and Selis as the electric motorbike producers who were eligible for the incentives.   Source: Jakarta Globe

This number is the highest in the last 16 months amid the uncertain global economy. "Tax revenue and the repayment of government debts made abroad were two factors that contributed to this increase," said Erwin Haryanto, executive director of the communications department of Bank Indonesia. Bank Indonesia sees the foreign exchange reserves as adequate to sustain the resilience of the external sector and maintain the stability of the macroeconomy and financial system to support the country's economic recovery.   Source: The Star Malaysia

Apple Inc. partner Foxconn Technology Group plans to invest about $700 million on a new plant in India to ramp up local production, people familiar with the matter said, underscoring an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.  The Taiwanese company, also known for its flagship unit Hon Hai Precision Industry Co., plans to build the plant to make iPhone parts on a 300-acre site close to the airport in Bengaluru, the capital of the southern Indian state of Karnataka, according to the people, who asked not to be named as the information is not public. The factory may also assemble Apple’s handsets, some of the people said, and Foxconn may also use the site to produce some parts for its nascent electric vehicle business. The plan may herald an accelerated relocation from China for Hon Hai. Once completed, we calculate this factory could materially improve the component supply in India and potentially boost the country’s share of iPhone assembly to 10-15 % from a sub-5% currently. India has offered financial incentives to Apple suppliers such as Foxconn, which began making the latest generation of iPhones at a site in Tamil Nadu last year.   Source : https://www.bloomberg.com/news/articles/2023-03-03/iphone-maker-plans-700-million-india-plant-in-shift-from-china

Cargo continued dropping in February at both the ports of Los Angeles and Long Beach as an uncertain economy and concerns over prolonged labor contract negotiations take their toll. Warehouses remain full as goods sit with retailers waiting for a hoped-for uptick in consumer confidence. While more cargo is expected to move across the local docks in March, Seroka said, “volume will likely remain lighter than average in the first half of 2023.” The Port of L.A. processed 487,846 twenty-foot equivalent units — or TEUs, the industry’s standard of measurement — in February, a 43% decrease from the same month last year. The second month of 2022 was POLA’s busiest February of all time.   Source : https://www.dailybreeze.com/2023/03/18/cargo-dips-again-at-la-long-beach-ports-as-consumer-spending-spree-wanes/

Indonesia’s foreign exchange reserves increased by about $900 million to $140.3 billion, partly due to the government’s offshore loan withdrawal. The reserves level was equal to funding needs for 6.2 months of imports, above international standards, and a level Bank Indonesia saw as adequate to support external resilience, it said in a statement.   Source: Reuters

Indonesia reported a larger than forecast trade balance in February at $5.48 billion, boosted by an unexpected drop in imports. February's trade surplus also marked an increase from January's $3.87 billion and was the biggest since October. Exports in February rose 4.51% annually to $21.40 billion, slightly lower than a 5.00% growth expected by analysts and after a 16.37% increase in January. Imports fell by 4.32% annually to $15.92 billion due to a drop in purchases of raw materials and machinery, Statistics Indonesia said. A Reuters poll had forecast a 9.74% increase in shipments. The resource-rich nation has enjoyed a trade surplus for 34 months on the back of high commodity prices, but economists warn that easing prices could result in narrowing surplus.

Traffi­c from China’s ports has slowed significantly, empty containers are stacked six high and trucks with no cargo dot the highway leading to the major terminals. The world’s largest box-ship operator plans to return dozens of chartered vessels to their owners. China’s exports fell nearly 10% in December from a year ago, the third straight month of declines and the biggest drop since Beijing locked down the port city of Wuhan in early 2020. The falling volumes have pushed global ship freight rates into a downward spiral, with the cost of sending a box from China to Los Angeles dropping to $1,238 this week from $15,600 this time last year. Global shipping boomed earlier in the pandemic, when soaring demand for goods led to lines of more than 100 vessels off the Southern California coast. Since then, rising inflation has sapped demand for many products as Americans shifted more spending to food, fuel and services, leaving retailers with a glut of goods. “There are 16,000 registered truck drivers here but only 3,000 are now working,” said Gao Chiang, a driver who had just unloaded a container filled with kitchen cabinets at Shenzhen’s port, one of China’s biggest export gateways. “This year will probably be one of the worst we’ve ever seen because the Americans stopped buying Chinese goods.” Giant liners such as A.P. Moller-Maersk A/S and Mediterranean Shipping Co., which made record profits earlier in the pandemic, have been thrust into a new reality. Over the past three months they have held back up to a third of scheduled capacity from Asia to the U.S. and 20% from Asia to Europe, canceling the sailings of dozens of ships. The industry also has idled around 7% of global vessel capacity, according to box-ship operators. Those ships are either parked at shipyards undergoing extended maintenance or anchored in the waters outside Malaysia and other locations in Southeast Asia with only a few crew members onboard.

  Maersk Group posted a record operating profit (EBIT) of USD 30.8 bn for 2022, beating last year’s earnings by 57%, but the group warned financial results for this year could be a fraction of its latest earnings. Investment analysts even raised the possibility of quarterly losses at the group as contract rates re-price in line with spot rates and costs potentially rise. However, the group said it believed bunker prices would fall in the second half of the year. Source : Alphaliner