American buyers cut RI textile imports

JAKARTA (JP): Many American buyers have cut their textile imports from Indonesia due to the economic slowdown, the Indonesian Textile Association (API) senior executive said on Friday.

The association's executive director, Irwandi Muslim Amin, said that textile orders from the U.S. for the autumn season, which should have arrived in May, had not yet "shown up"

He said that additional orders worth about US$150 million, usually received in January were also missing. But he did not elaborate.

"With demand from European countries and Japan also declining, the industry's exports have dropped 10 percent during the first quarter," Irwandi told a media briefing.

Textile exports to the U.S., Europe and Japan account for about 50 percent of Indonesia's textile exports, while exports to the so-called non-quota countries such as the Middle East and African countries accounted for the remaining 50 percent.

The global economic slowdown, which began in the United States during the last quarter of last year, has now hit the economies of many industrialized countries, including the U.S.'s major trading partners, Japan and Europe.

"The industry is suffering from the global economic slowdown...we have taken several measures to survive," he said.

Irwandi said that many textile companies had reduced their production level to only 60 percent of total production capacity, compared to 90 percent last year, due to the sluggish export markets.

He said that many local textile companies opened only for half a day due to the lack of demand.

However, he said, the association still maintained their current labor force despite the cut in demand. "We hope the sluggish market will not last long, We are optimistic that recovery will take place in the fourth quarter of this year," he added.

He estimated that total textile exports would decline this year due to slow demand. "It will be difficult even to achieve last year's level of $7.3 billion," Irwandi said.

In addition, he added, many buyers had also considered postponing their orders from Indonesia or shifting their orders to other countries, due to uncertainties in the country's political situation.

"If, in the coming months, there's unrest in the country...buyers will be sure to cancel their orders," he said, adding that when the Sampit riots occurred, many buyers shifted their orders to India and China.

Hundreds of people were killed during ethnic clashes between Dayak people and migrants from Madura in Sampit, Central Kalimantan earlier this year.(05)