Global export restrictions are significantly reshaping market dynamics, as countries like Indonesia, Russia, and China implement major policy changes affecting various industries.
On December 19, 2024, Indonesia announced it would raise the export levy on crude palm oil (CPO) from 7.5 percent to 10 percent. This move aims to support financing for biodiesel subsidies, particularly with the planned launch of the B40 biodiesel program starting January 1, 2025. CoordinATING Minister for the Economy, Airlangga Hartarto, stated, “The levy increase will be enforced after the Finance Minister’s regulation is issued.” The Indonesian government depends on CPO export levies to subsidize its biodiesel initiative, and the Indonesian Palm Oil Plantation Fund Management Agency (BPDPKS) estimates the shift from 35 percent to 40 percent biodiesel will necessitate subsidies rising by up to 68 percent.
Currently, palm oil prices hover around USD 400 per metric ton, surpassing those of crude oil, indicating higher subsidy demands for the new biodiesel blend. While the increase aims to fund the government’s renewable energy goals, it has elicited apprehension among industry stakeholders. Eddy Martono, Chairman of the Indonesian Palm Oil Entrepreneurs Association (Gapki), asserted, “Compared to Malaysian palm oil, our products are already more expensive due to various levies, export taxes, and domestic obligations.” This concern echoes amid fluctuated palm oil contract prices on global exchanges.
Shifting gears to the aluminum market, China has confirmed the cancellation of tax rebates on aluminum semi-products effective December 1. According to customs data released on December 20, 2024, China’s exports of aluminum plate/sheet and strip rose to 324,400 metric tons, signifying a 36% year-on-year increase. Industry players reacted swiftly, with many adjusting shipment schedules to counteract the anticipated loss of competitiveness following this taxation change. The impact is deeply felt as many enterprises reported having to forfeit overseas orders due to raised costs.
Meanwhile, the Russian government has also taken steps to control agricultural product exports, slashing its wheat export quota for the second half of the marketing year by 400,000 metric tons. The official document outlining this decision was published on December 18, indicating Russia’s intent to rein in its agricultural exports amid turbulent global markets.
Across the Pacific, China’s export ban on niche metals directed at the United States opens doorways for Canadian firms. The restrictions affect key minerals like gallium, germanium, and antimony, which are pivotal for high-tech and military applications. Canadian companies such as Neo Performance Materials, Teck Resources, and Northern Graphite Corp are well-positioned to capitalize on increased demand resulting from these restrictions. Neo Performance Materials, led by CEO Rahim Suleman, emphasized the growing dependency of the US semiconductor industry on gallium, stating, “The growth and success of industries like the US semiconductor industry is going to be dependent on having a supply of gallium.” Meanwhile, Teck Resources has signaled intent to increase germanium production.
Despite the prospects for Canadian firms, challenges loom with incoming tariff threats from the newly instated Trump administration, which could dampen the anticipated benefits of these shifts. Hugues Jacquemin, CEO of Northern Graphite, noted the fragility of the graphite supply chain, reinforcing the need for domestic production capabilities due to external geopolitical pressures.
The dynamics of export orders are particularly prominent within Taiwan, where manufacturers have grown concerned about overshooting their targets. For November 2024, Taiwan's export orders rose by only 3.3% year-on-year, falling short of the expected 6.3% growth. The Taiwanese Ministry of Economic Affairs reported on December 20, 2024, the subpar performance, significantly impacted by weaker shipments of smartphones and decreased demand from China, whose orders plummeted by 3.4% year on year.
Taiwan, home to major tech players like TSMC, still anticipates recovering momentum, projecting December orders to increase between 13% and 17.5%, partly driven by semiconductor demand surges. Yet, geopolitical tensions underpin this optimism, leading to uncertainty as the industry braces for the Lunar New Year and potential market volatility.
These scenarios paint a vivid picture of how export restrictions and regulatory changes across countries are rewriting the rules of global trade, influencing competitiveness, price structures, and supply chains across diverse sectors. Leaders and stakeholders must navigate these market transformations with caution to optimize opportunities and mitigate risks as the ripple effects of policy changes continue to reverberate throughout international markets.
