Textile exports expected to rise 10% this year

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo estimated yesterday that exports of textiles and textile-related products in 1996 would be worth US$6.8 billion, up 10 percent on last year.

Tunky said the textile industry was performing better, particularly its ability to use export quotas.

"Quota distribution and utilization by textile companies have got better in the last couple of months," Tunky said after meeting businesspeople from the industry.

Exports of textiles and textile-related products exceeded US$6.2 billion last year -- or 13.66 percent of the country's total exports -- compared with $5.8 billion for 1994.

Between January and August last year, exports were worth $3.94 billion. In the corresponding period of this year, they reached $4.16 billion.

Tunky said that, between January and November this year, Indonesian textile producers used 74.96 percent of the quota allocated by the United States, up from 63.89 percent in the same period last year; 89.55 percent of the quota from the European Union, up from 75.79 percent; 52.43 percent of Canada's quota, up from 50.18 percent; and 142.61 percent of Norway's quota, up from 102.12 percent.

Between January and December 1995, they used 78.74 percent of their quota from the United States, 90.3 percent from the European Union, 71.99 percent from Canada and 135.82 percent from Norway.

The Ministry of Industry and Trade distributes export quotas to textile producers which they use to export to the countries which set the quotas.

About 60 percent of exports of textiles and textile-related products are under quota schemes.

In recent years, export quotas have been regularly sold by the companies receiving them.

Analysts say the high price of the quotas and their uneven distribution by the ministry were among the reasons the country's textile industry was lagging.

The ministry decided earlier this year to fine those selling textile-export quotas. It accused them of marring the performance of textile exports by reducing textile producers' export opportunities.

The government announced in September it would reduce its textile export target from $12 billion to $10 billion a year by the end of the Sixth Five Year Development Plan, which ends in 1999.

The director general of foreign trade, Anang Fuad Rivai, said yesterday that export quotas "should not be seen as a commercial commodity, but as a facility that must be used".

He said the government had issued a rule in July which stipulated that unused quotas could be returned to the ministry.

In September, the government ruled that companies which had not returned their unused quotas must report their export plans.

"If these two rulings are ignored, the government will cancel quotas after warning a company three times," Anang said.

Anang said Indonesia had swapped part of its unused quota from Singapore for other categories.

As part of the deal, Indonesia obtained quotas for 2.8 million textile pieces and textile-related products. (pwn)