Buyers unwilling to place long-term orders: Official
Buyers unwilling to place long-term orders: Official
JAKARTA (JP): Buyers of Indonesian goods have been unwilling
to place long-term orders here due to uncertainty over the
country's political situation, a senior official has said.
Director General of International Trade Djoko Moeljono said on
Thursday that very few large orders had been placed by foreign
buyers for the period after June.
"Buyers are currently waiting to see what happens in the
election before placing any further orders. In recent weeks they
have only placed short-term orders, and then for only small
amounts," he said after opening a discussion organized by the
Indonesian Exporters Association (GPEI).
Djoko said that in past years foreign buyers placed purchase
orders to cover periods of at least one year, adding that most
were now unwilling to stretch themselves beyond three months.
"It is burdensome for us because many of our manufacturers
have bought supplies and raw materials to cover a full year's
production," he said.
Indonesia will hold its first free and fair general election
since 1955 on June 7, but people fear that rivalry among the 48
contesting political parties could provoke further unrest in the
country.
Djoko said many foreign buyers have expressed concern over the
political situation here and warned they will turn to more stable
countries if Indonesia descends into chaos after the election.
"We hope the election runs smoothly so that the situation here
improves and foreign buyers renew their purchase agreements with
local manufacturers," he said.
Djoko said that Indonesia's non-oil and gas exports for the
first three months of this year dropped by 19.3 percent to US$8.2
billion from the same period in 1998.
Monthly non-oil and gas exports totaled $2.3 billion in
January, $2.6 billion in February and $3.3 billion in March.
"Although our exports have increased in value in recent
months, they are still 19.3 percent below their level in the
first quarter of 1998," he said.
Djoko said the country's exporters would have to work hard to
push exports towards the $50 billion targeted this year.
"Reaching the target will very much depend on foreign buyers'
confidence," he added.
Djoko said non-oil and gas exports declined by 2 percent to
US$40.97 billion in 1998 from $41.82 billion in 1997.
Exports of oil and gas stood at $7.8 billion last year,
bringing the country's foreign exchange earnings from exports to
$48.8 billion.
Last year's fall in non-oil and gas exports was attributed to
falling imports of raw materials and capital goods as a result of
the declining value of the rupiah in the international currency
markets.
Imports of raw materials and capital goods fell by 34 percent
last year, forcing manufacturers to cut production and exports
despite high demand.
Over 90 percent of the country's non-oil and gas exports were
shipped to only 24 countries, he said.
Exports to Japan and South Korea, both key trading partners,
fell by 23 percent and 17.5 percent respectively last year, he
said.
"We have to try hard to enter new markets to boost our exports
because we do not want to depend too heavily on our established
trading partners," he added.
Meanwhile, GPEI chairman Amirudin Saud said he hoped the
country's exports would reach $56 billion this year, adding that
imports of $30 billion had been forecast for the same period.
(gis)