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Indonesian Garment & Textile Export

RI exports exceed target but questions remain

IBonWEB.com - Despite a shaky performance in several export-oriented sectors, Indonesia's exports apparently hit another record high in 2005, booking growth of almost 20 percent over the previous year.

The Central Statistics Agency (BPS) reported Wednesday that full-year exports stood at US$85.6 billion on the back, in part, of soaring sales of non-oil and gas commodities, mainly coal, copper, palm oil, textiles and garments.

The government had predicted that last year's exports would grow by 10 percent from the $69.7 billion booked in 2004.

Exports of copper and coal, grouped in the metals and mineral fuels category, were the largest contributor to the surprising figures, said the BPS's exports section head, Dantes Simbolon.

As the trend in global energy consumption shifted from oil to alternatives such as coal, prices were also increasing, leading to larger output volumes from Indonesian mining companies, Dantes added.

This shift had also resulted in higher demand for crude palm oil -- one of the raw materials used for biofuels -- whose export value grew by $350 million last year. Indonesia is the world's second largest palm oil exporter after Malaysia. The commodity is used to produce cooking oil, soap and detergents.

China's rising electronics industry also pushed up demand for metals, lifting prices higher in 2005.

Meanwhile, the value of textile and garment exports, the third largest contributor to Indonesia's non-oil and gas exports, rose by 23.5 percent, according to the BPS. However, this figure was challenged by the Indonesian Textile Association (API).

API chairman Benny Soetrisno questioned how such growth was possible, pointing out that last year the association saw 77 export-oriented textile manufacturers cease operations.

In fact, the Industry Ministry earlier reported the sector had only grown by 1.1 percent in the first nine months of 2005, as compared to 4.2 percent during the same period the previous year.

The difference between on-paper performance and the real situation has long given rise to suspicions of rampant transshipment -- a process whereby imported products are reexported, partly or wholly, to other countries as Indonesian goods.

A similar situation prevailed in the timber-processing industry, particularly the furniture sector.

The figure for furniture exports, reported by the BPS to have risen from $1.55 billion the previous year to $1.63 billion last year, could well be inaccurate, Indonesian Furniture Association chairman Sae Tanangga Karim said.

He explained that last year, 64 members of the association had to close down due to rising energy and transportation costs.

Previously, the figure for Indonesian imports, reported at $57.5 billion last year, had also been questioned in light of the huge discrepancies between the Indonesian data and the figures produced by the country's trading partners, such as Singapore and China.

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