Textile exports expected to keep declining

JAKARTA (JP): Indonesia's textile exports, which started falling in the forth quarter of last year, will likely continue declining in the coming months due to decreased competitiveness of its products and weaker demand in industrial countries.

"We have proposed measures to boost our textile exports and will discuss them intensively with officials of various government institutions," Chairman of the Indonesian Textile Association (API) Handoko Tjokrosaputro told reporters after meeting with President Soeharto at Bina Graha yesterday.

He said Indonesia's exports of textiles and textile products continued increasing in the first nine months of last year "but they fell sharply in the following four months."

Handoko met with Soeharto to invite him to open the 10th conference of the International Apparel Federation (IAF) in Bali in the middle of June.

The June 14-June 15 meeting is expected to attract 500 participants from various countries in Asia, Europe and America.

Handoko, who was accompanied by API executives, said he was concerned over the decline in textile exports, which have been the country's main earner of foreign exchange.

Price falls

Ministry of Trade data say Indonesia's exports of fabrics, yarns and other textile materials increased by 20 percent in volume to 441,240 tons last year from 367,560 tons in 1992, but the 22.5 percent decline in prices caused the export value to decrease by seven percent to US$2.63 billion from $2.83 billion. Exports of garments rose 17.8 percent to 227,690 tons from 193,210 tons but the 6.1 percent decline in prices caused their value to increase only by 10.6 percent to $3.5 billion from $3.16 billion.

All in all, Indonesia's revenue from exports of textiles and textile products increased by 2.2 percent to $6.13 billion last year from $6 billion in 1992.

Handoko acknowledged that the emergence of new textile exporters -- China, Vietnam, Bangladesh, Pakistan and India -- has increased competition on the world market.

Recession in some industrial countries put more pressure on the prices of textiles and garments.

He said Indonesia should take measures to reduce the costs of textile production and to improve quality if they want to continue increasing exports.

There is no problem with the labor costs for textile production but other costs have reduced the competitiveness of Indonesian products, he said.

Textile company executives said recently that invisible costs, particularly bribes for government officials to facilitate business licensing and export procedures, have substantially raised production costs in Indonesia. (riz)