RI's businesspeople ready to trade with Libya

Evi Mariani, The Jakarta Post, Jakarta

Indonesian businesspeople said they were ready to send commodities to Libya under the US$540 million countertrade deal recently signed by both countries, if the prices offered were "attractive".

"We have a huge potential to meet Libya's demand, because our international competitiveness has been declining and textile sales have been sluggish," vice chairman of the Indonesian Textile Association (API) Lily Asdjudiredja told The Jakarta Post on Monday.

"But the deal has to offer attractive prices for us," he added.

The countertrade deal agreement was signed on Aug. 25 by Minister of Industry and Trade Rini M.S. Soewandi during her visit to Libya.

At a press conference last week, the ministry explained the one-year deal had to be realized by the end of this year or else, be terminated.

Under the deal, Indonesia will import 50,000 barrels of crude oil per day for a full year from Libya, which in return will get commodities like textiles and garments, footwear, toiletries, food, tea, coffee, spices, timber, furniture, plastics, paper and stationery, electronics, tires, rubber products, vegetable oil, auto parts and aircraft from Indonesia.

Based on the assumption that the international crude oil price stands at an average of $30 per barrel, the deal is estimated at around $540 million.

"Indeed, it's quite a high value. If the price and the payment mechanism are acceptable to us, why not?" executive director of Indonesian Rubber Producers Association (Gapkindo) Suharto Honggokusumo told the Post on Monday.

He said even though the country's rubber production was forecast to decline this year due to climatic problems, the association's members would still be able to meet the demand.

"Of course, in order to fulfill the demand, we might have to turn down some of our customers, particularly the traders," he said, adding that 60 percent of the country's rubber output was sold directly to users, while the remainder was sold through traders.

"Anyway, we still focus more on our traditional customers," he said.

Indonesia exports 90 percent of its rubber output, with tire manufacturers in the United States and Japan being the major customers.

Previously, Gapkindo expected this year's production to grow by 2 to 3 percent from 1.63 million tons last year. However, due to early rains in some main producing areas, including North Sumatra, it revised the production target to the same amount as last year's.

Government data says in 2002, Indonesia's exports to Libya reached $5.8 million, with automobile tires, steel cables, electronic goods, textiles, garments and soaps being the main commodities. Meanwhile, Libya's exports to Indonesia that year reached $29,000 million, with oil and iron ore being the main commodities.