The sales performance of the fiber and filament yarn industry continues to decline due to the abundance of imported textile raw materials flooding the domestic market. Farhan Aqil, the Executive Secretary of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), highlighted that a reduction in raw material imports is eagerly anticipated for the textile and textile product (TPT) industry. However, the current decrease in imports is only evident in some commodities.
"The imports of textile raw materials are still abundant. This month alone, reports from our members indicate increasing difficulty in selling their products," said Farhan, quoted on Thursday (November 16, 2023).
The Central Statistics Agency (BPS) recorded a 6.08% decrease in auxiliary raw material imports, valued at US$13.44 billion in October 2023. Cumulatively, until October 2023, the total value of auxiliary raw material imports stood at US$19.32 billion, marking a 12.65% decline compared to the same period last year.
Farhan noted that the use of imported raw materials entering Indonesia already fulfills 60-70% of the national textile consumption. Consequently, he urged the government to pay special attention to this matter.
Presently, the government is conducting public awareness campaigns about import trade policies, specifically limited import prohibitions (lartas) through the revision of Trade Minister Regulation Number 25 of 2022.
"We are also discussing import substitution for bonded zones. The Ministry of Industry is currently establishing mandatory standards for finished garments, which we must support," he added.
Nevertheless, Farhan predicted that the textile industry might continue to decline until 2024 and persist if the government does not provide special attention. Earlier reports stated that the decline in auxiliary/raw material imports resulted from the weakened industrial utility, according to Jemmy Kartiwa Sastraatmaja, the Chairman of the Indonesian Textile Association (API).
The utility from upstream to downstream textile and textile product (TPT) industries was recorded at 50%. "The reduction in raw material imports is also a consequence of sluggish TPT demand, both in the domestic market and exports, due to the current global economic slowdown," said Jemmy.
Although it signals weak domestic production, Jemmy remains optimistic that the decline in raw material imports is also driven by the Ministry of Industry's efforts to maximize the utilization of local raw materials. "The main focus should be on enhancing industry utilization by tapping into the existing local market," he emphasized.