Green flood alert in Indonesia

Supply-chain Risk Briefing: Indonesia Floods

1) Summary Floods in Indonesia that began on March 2nd continued until April 12th, resulting in 16 deaths and 1,391 displaced persons. While classified as a medium-grade disaster, the prolonged duration (approximately 6 weeks) is noteworthy.

2) Supply-chain impact

• Concerns over raw material supply disruptions due to potential flooding of palm oil and rubber production areas
• Manufacturing production delays due to reduced accessibility to major industrial corridors and ports between Jakarta-Surabaya
• Increased global raw material supply-chain instability from flooding of nickel, coal and other mineral mining and transportation infrastructure
• Cascading delays in Asian supply chains from textile and electronic component manufacturing facility shutdowns and worker evacuations

3) Watch points

• Timeline for resumption of operations at major ports (Tanjung Priok, Surabaya) and resolution of logistics bottlenecks
• Need to track palm oil price volatility and impact on global edible oil markets