Press Release
Commodity Outlook Q4 2022: Impact of Energy Crisis and Geopolitical Conflict on Commodities
Commodity Outlook Q4 2022: Impact of Energy Crisis and Geopolitical Conflict on Commodities
Tuesday, 25 October 2022

Jakarta, October 25, 2022 - Successive global crises have created unprecedented challenges for developing countries, from Covid-19, and geopolitical conflicts between Russia and Ukraine, to climate change. The most visible impacts are the sharpest slowdown in economic activity in 80 years, rising inflation, accelerating food crises, wider geopolitical conflicts, and worsening poverty.

According to ICDX Research & Development Girta Yoga, “During the third quarter of 2022, food prices and inflation in Indonesia have increased. Food prices rose by 12.14 YoY and Indonesia's inflation rose by 230.79% YoY. But what should be proud of, even though inflation growth is very drastic, Indonesia has the advantage that it is balanced by positive GDP growth. So that issues of rising prices and declining purchasing power when inflation can be minimized.”

Since the emergence of the Russia-Ukraine geopolitical conflict, Indonesia has indeed benefited from rising commodity prices. However, the Central Statistics Agency (BPS) stated that the prices of several commodities at the global level were lower than in the last few months. Palm oil prices fell quite deeply in the period from June to September 2022. This is by the ICDX Research and Development team, which noted that in Q3 and then crude palm oil (CPO) experienced a price decline of 15.55%.

“For energy commodity projections in the 4th quarter of 2022, oil prices have the potential to meet resistance in the price range of USD110-120 per barrel, and for potential support to be in the price range of USD85-75 per barrel. Meanwhile, for natural gas, the potential price is at USD7.50-8.50 while the support value is estimated at USD5.50-4.50. Then for the price of coal, in the fourth quarter itself will be in the price range of USD475-500 per tonne, while the support is projected to touch USD350-325 per tonne," Yoga added.

In addition to the energy crisis, high inflation is also one of the obstacles to global economic growth. According to Bank Indonesia, the stability of the Rupiah exchange rate was maintained amidst the very strong US Dollar and increasing uncertainty in global financial markets. Meanwhile, the Rupiah exchange rate until October 19, 2022, depreciated 8.03% (YTD) compared to the level at the end of 2021, relatively better than the depreciation of currencies of several other developing countries. The depreciation was in line with the strengthening US dollar and increasing uncertainty in global financial markets due to more aggressive monetary policy tightening in various countries, especially the US in response to inflationary pressures and concerns about the global economic slowdown, amid perceptions of the outlook for the Indonesian economy that remained positive.

“Global inflation is still looming, especially in the future, sub-tropical countries will experience winter. Where energy will play a major role in household economic activity. Surely in the future, if energy prices are more expensive and more difficult to obtain, it will affect economic activity in various countries and will have a direct impact on the prices of other foreign currencies," said ICDX Research & Development, Taufan Dimas Hareva.

The development of gold commodity prices is also still an interesting topic to discuss. The global inflation that occurred, the aggressiveness of the Fed in making policies to suppress inflation, and the ongoing geopolitical conflict between Russia and Ukraine are still contributing factors to the volatility in gold prices. In 2022, despite experiencing a strengthening, gold prices tend to decline until the end of the third quarter.

“Global gold prices have seen a downward trend since the beginning of the year, this is influenced by three things, namely the Fed's policy, global inflation, and the Russia-Ukraine conflict. Although US inflation has decreased, it is still far from the target set by the Fed. So that this will lead to a new policy by the Fed that can affect the price of gold. In addition, the Ukraine-Russia conflict is also a factor driving the price of gold. It is predictable that, if the conflict improves, gold prices will be depressed. However, if the conflict worsens, gold prices are predicted to rise,” concluded ICDX Research and Development Revandra Aritama.


About Indonesia Commodity & Derivatives Exchange (ICDX)

The Indonesia Commodity & Derivatives Exchange (ICDX), also known as the Indonesia Commodity and Derivatives Exchange (ICDX) is a commodity and derivatives exchange based in Indonesia. ICDX's vision is to become a global market exchange that improves national welfare, with a mission to become a benchmark for setting world commodity prices through Indonesian primary products. ICDX is an Exchange supported by its members consisting of brokers and traders regulated by BAPPEBTI. ICDX members facilitate customer transaction services which include ICDX commodity futures trading contracts. Trades on ICDX will be settled, guaranteed and cleared by the Indonesia Clearing House. For more information, please visit www.icdx.co.id

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