Indonesia Begins a Commodity Supercycle

You are currently viewing Indonesia Begins a Commodity  Supercycle
Image source: https://www.pexels.com/photo/view-of-factory-against-blue-sky-257700/

Indonesia is at the start of a commodity supercycle; so says Indonesia’s Minister for Trade in a press release on 6 April 2021. Over the past year, commodity prices have dropped dramatically not only due to the impact of the coronavirus but also due to the trade war between USA and China.

With a number of viable vaccines being rolled out worldwide, the global economy is beginning to recover. This recovery includes an increased demand for core commodities such as oil, gas, iron ore, and copper. With limited supply and increased demand, prices are forecast to rise significantly – creating the start of a supercycle.
Indonesia may soon enter a bull market. The Minister for Trade has forecast three trade trends during this super cycle, these are the increase in:

  • investment in Indonesia’s automotive industry;
  • Indonesia’s competitiveness on the world market for the production of goods and services related to core commodities; and
  • Indonesia’s competitiveness on the world market for jewellery, given Indonesia’s natural resources and highly skills human resources.

Various leading economists have stated that the economic momentum to create a supercycle takes at least 10 years – this supercycle is, therefore, a rare event.