The escalating conflict in the Middle East has begun to have a significant impact on the textile and textile products (TPT) industry in Indonesia. One of the most noticeable impacts is the increase in polyester raw material prices, which has reached around 15%, increasing pressure on industry players, particularly in the upstream sector, such as fiber and filament yarn producers.
The Chairperson of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wirawasta, explained that this increase is due to the dependence of polyester raw materials on petrochemical products derived from oil and gas. Geopolitical instability has also driven up the prices of these commodities. Several key ingredients, such as paraxylene (PX), purified terephthalic acid (PTA), and monoethylene glycol (MEG), have experienced significant increases, directly impacting production costs in the textile industry.
On the other hand, the upstream textile industry still has the capacity to optimize domestic production. However, dependence on imports remains, particularly for commodities like cotton and some petrochemical raw materials like PX and MEG. If the global conflict continues, the potential for disruption to import supplies poses a threat that must be anticipated early.
In the intermediate sector of the textile production chain, businesses are considered to have an opportunity to increase local production to reduce dependence on imported raw materials, the prices of which constantly fluctuate. However, many domestic producers remain cautious. Market uncertainty and the lack of clear policy assurances from the government are the main reasons they are hesitant to increase production capacity.
In fact, in terms of capacity and quality, the national textile industry is considered capable of independently meeting domestic market demand. Therefore, government support is considered crucial, particularly in creating market certainty and favoring domestic products so that the industry can grow more sustainably.
Amid global pressure, upstream producers still operating are striving to maintain factory utilization rates above 70% to maintain business viability. However, nationally, the textile industry's utilization rate remains around 45%, indicating that this sector still faces significant challenges in recovering and developing.