Indonesia proposes import-export quotas on plastic resins as part of the Commodity Balance program

By definition, Commodity Balance or Neraca Komoditas (NK) is an instrument introduced by the Indonesian government to identify shortages or excesses in the domestic production of specific commodities. The system is used by the authorities to issue import and export quotas for these commodities base on supply and demand. 

As the Center for Indonesian Policy Studies blatantly puts it, ‘policymakers will use it to determine how much they will ‘open the tap’ for domestic producers to access the raw and semi-processed materials they need.’

In 2021, the Commodity Balance was applied to five food commodities: rice, meat, sugar, salt, and fishery products.

The government has now expanded the Commodity Balance to cover key plastic resins under the heading 39 in the Harmony System. The implication is that Indonesian buyers and sellers will have to apply for permits to import and export the products that fall into this category. Moreover, a quota system will be applied.

A converter told CommoPlast that related governmental bodies are reaching out to market participants to gather more details on the needed grades and estimated consumption for the period 2023-2024 using the baseline data of 2022. 

Many buyers have openly expressed their frustration over the heightened non-tariff trade barriers, which would deter small to medium-scale manufacturers from gaining the advantage of having access to a wider global supply of raw materials. However, the Ministry of Industrials expects domestic supply to fully meet demand by 2027 once key local petrochemical plants completed the expansion projects.

While waiting for approval from the Ministry of Trade, the Ministry of Industrial has offered a breakdown of which plastic resins have been proposed to be included in the Commodity Balance program based on an 8-digit HS code.