India and Indonesia hold a discussions on coal trade during the fifth Joint Working Group between the countries this week - Photo: Privacy

JAKARTA (TheInsiderStories) – India and Indonesia hold a discussions on coal trade during the fifth Joint Working Group between the countries this week, it said in a statement. The session was conducted for flagging the legacy trade issues by investors.

India’ coal import is estimating recover in the fourth quarter of 2020, after slowed in this year amid the COVID-19 pandemic, in line with an expected upturn in power generation demand. According to official data, import coal from Indonesia have fallen by nearly 50 percent.

The Central Electricity Authority data showed, until May, coal imports by Indian companies totaled 25 million tones (MT) of coal or fell 16 percent compared to a year ago. While. Sujatmiko, a director at energy and resources minerals (EMR) ministry office, said the amount equal to 70 percent of last year’ exports level.

He noted, “There has been significant fall in the last few months.”

To reaches the trade values target of US$50 billion by 2025 with India, Indonesia explore the cooperation in construction, connectivity, hospital, pharmaceutical, and industrial sectors, especial the conversion of coal becomes a gas with the partner. In the last meeting between President Joko Widodo and Indian Prime Minister Narendra Modi, both leaders conveyed the importance of the two countries to eliminate trade barriers, both tariff and non-tariff.

In 2019, total trade value between Indonesia and India recorded $16 billion. Indonesian export to India worth of $11.78 billion and imports with amount $4.29 billion. The Southeast Asia largest economy get a surplus from the bilateral trade $7.48 billion.

While, the EMR ministry reported the realization of Indonesian coal exports has fallen sharply by 11 percent until July 2020 during the pandemic period and weak global demands. The minister, Arifin Tasrfin, said that the volume of Indonesian coal exports was recorded 238 MT of coal with a value of $10.13 billion during the first seven month.

In the same period of 2019, the exports reached 266 MT of coal and the values worth of $12.36 billion. He explained, that the demand for coal in the Indonesian market fell 20 percent and South Korea dropped by 15 percent.

“[The decline] is also due to the policies of major coal importer countries such as India and China, which prioritize domestic coal production,” he told in a virtual conference on Monday (09/14).

The minister emphasized that the COVID-19 outbreak has also resulted in a decline of coal price, global demand, limited access and mobility. as the impact, he said, the realization of national coal production also fell to 362 MT of coal from a year ago reached 409 MT of coal.

The ministry data notes that the realization of coal production in the January – August of 2020 period is equivalent to 66 percent of the national coal production target at 550 MT of coal. Even so, said Tasrifin, his office not changed the outlook for the national coal production until the end of this year.

Currently, the reference of coal price for direct sales for delivery of Free on Board sales for Sept. 1 to 30, 2020 at $49.42 a MT of coal. The benchmark level slightly decreased by 1.83 percent compared to the August worth of $50.34 per MT of coal. When compared with the the same month in 2019, the price amounting to $65.79 a MT of coal and experienced a significant decreased of 24.88 percent.

To help the coal producers, Tasrifin has urged the coal producer to prioritize the fulfillment of domestic primary energy needs to support the government’ renewable program. He also decided to continue the domestic market obligation at least 25 percent of the total coal production in 2020. These provisions are contained in Ministerial Decree Number 261 of 2019 concerning Fulfillment of Domestic Coal Needs for 2020.

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