Indonesian textile exporters hit by plummeting demand

12 Oct '11

2 min read

Several textile production firms in Indonesia are continuously bearing the heat of the global financial crisis, with a number of industries witnessing a fall in export orders.

The Indonesian Textile Association (API) has stated that domestic firms are experiencing a fall in export orders since early September from two of their leading import markets namely, the Europe and the United States. API expects the trend to continue in coming months.

Europe and the US respectively account for 18 and 36 percent of Indonesia's overall textile exports.

Driven by apprehensions of fall in consumer demand, several retailers in Indonesia's export markets have slashed their orders, following which API was required to revise its export growth target for the current year from 24 percent to 20 percent. The association aims to reach US$ 12.2 billion in revenues for the current year.

The Association claims that plummeting demand may compel domestic textile producers to resort to the practice of curtailing production, as a short-term strategy.

Exports of textiles and footwear, the two key production items of Indonesia that majorly contribute to the country's non-oil and gas exports, hiked to US$ 107.37 billion during January-August 2011.

With a rise of 16.4 percent, the country exported textile items worth US$ 7.4 billion during January-August this year, up from last year's corresponding period's export of US$ 6.4 billion.

According to the Indonesian Chamber of Commerce and Industry (Kadin), it may take long to diversify the export markets, but the local industry players may need to act swiftly and first tap the domestic markets.

It said the local industry needs to optimize non-trade barriers like utilising anti-dumping and protective duties and the Indonesian National Standards (SNI) to safeguard the domestic markets against invasion of sub-standard imported goods.

Fibre2fashion News Desk - India

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