The crisis which was today still felt by Uni Europe and the USA had its impact on export performance of textile-and-textile products (TPT) from China. Data of the Association of Indonesian Synthetic Fibra (APSyFl) mentioned that through January-February 2012 export of garments from China dropped by 2.5% whilst export of textile dropped by 2.6%. In April 2012 export of garments from China inched up by around 1% but export of textile remained to drop by 0,3%, so the trend of the first four months in 2012 signaled that export of TPT from China was declining.
Although the downturn seemed insignificant by percentage, the value was great because last year China’s export of TPT was above US 200 billion. Compare this against Indonesia’s export of TPT which was last year posted at USD 13 billion. China’s low export performance would have its impact in any big populated country (like Indonesia) being targeted as clearance sales of products which could not be exported to the USA or Europe, because of their big capacity. Especially products of the upstream sector like fibred and thread Indonesia and Brazil as users of thread textile would be the main target of China’s clearance sales.
The Secretary General of APSyFl Redma Gita Wirawasta reminded in Jakarta on Friday (13/7/2012) that Indonesia as a country of high economic potential must be cautious about China’s intention to clear off their unsold products. China was most likely to export fibred and thread at unpredictable prices. Redma rated that China’s producers would not care if they loose as long as they could get rid of the stuck products because to hol the products too long would mean bigger loss. Goods of normal price would be sold at home, but if local market could not absorb the products China would dump them away to Indonesia at extremely cheap price.
Redma disclosed that production capacity of China’s textile products today was 10 times that of Indonesia. For comparison, China’s textile production capacity was around 62 million tons per year while Indonesia’s a capacity was only 6.2 million tons per year. It came as no surprise that China’s textile dominated the international market including Indonesia. Redma showed as an example in quarter l-2012 export of China’s spinner polyester thread (PSF) to the USA dropped by 700,000 tons. Meaning China’s PSF producers failed to sell 700,000 PSF to their own domestic market because export of thread to America dropped; in addition to downturn of export to Uni Europe the total was estimated at 1.5 million tons. “Imagine how much stock of PSF and spinner polyester thread that they hold today which must be thrown away overseas markets and Indonesia was one of the possible target” Redma remarked.
Redma rated that Indonesia had the potential to be the world’s textile titian. However he reminded that the Government trouble shoot some problems which had always been hampering development of national TPT industry. He explained that textile raw materials like cotton was still 99.5% imported. Cotton was a textile raw material contributing significantly to the textile industry i.e., 38%, followed by polyester (an oil by-product) and rayin fibred (a pulp by product).
In the roadmap of national TPT industry development it was stated that the TPT industry needed extra investment of Rp 60 trillion to attain Vision of 2015. In the next 5 years export of national TPT would command over 2.9% of word market and 88% of domestic market and 16% to ASEAN market. World’s total TPT trading reached USD 583 billion last year. Of that amount, China and Hong Kong held 36,6% of shares, followed by Turkey (3.91%), India (3.28%), the USA (2.87%), Korea (2.11%), Pakistan (1.92%) and Indonesia (1.67%).
Business News - July 18, 2012