Jakarta – Public consumption of illegal textile imports rose to 70.6 percent last year from 49.9 percent in 2006, costing the local industry billions of US dollars, an industry leader said Friday.
According to data received from the Indonesian textile association (API), domestic consumption rose to 1,220 thousand tons last year from 1,013 thousand tons in 2006 and 836 thousand tons in 2005.
Of those amounts, illegally imported products soared to 862 thousand tons last year from 506 thousand tons in 2006 and 489 thousand tons in 2005.
"These items are most probably illegal because the businesspeople could not show the documents proving the legality of their products," API president Benny Soetrisno said during the launching of the association's new website in Jakarta.
"And the number of these illegal imports has been increasing over the past three years. We need to act on this soon," he said.
He estimated last year the industry lost US$4.8 billion (Rp 44.7 trillion) in revenue due to illegal imports. The industry made US$1.67 billion in accountable domestic sales.
"It's a disheartening trend that our market is still flooded with illegal products, because in Java alone there is a massive market for local textile products.
"Instead, our market is being taken away by illegal products, and small- and medium-sized textile enterprises have to resort to cutting jobs, defaulting on their loans or even shutting down completely," Benny said.
He said the association would ask the government to limit the number of seaports where ships carrying imported goods could dock. "That way, customs will have an easier job of catching these illegal importers because their scrutiny can be more concentrated," he said.
Currently, in Java alone, there are six docking ports that receive imported goods, including Cilacap Seaport in Central Java and Ciwandan Seaport in Banten.
Benny said the government could also protect the country's textile producers by increasing import duty by 10 percent to 20 percent to reduce imports. "So what if it's not a free-trade country, what we need now is a managed-trade country to protect the country's interests."
Gunaryo, the trade ministry's director of market development and distribution, said the government had undergone numerous campaign efforts to persuade the public to buy locally made products.
However, he said the government was more concerned with main commodities, including rice and cooking oil. "With the fluctuation in crude oil prices and the rising prices of commodities, our market intervention to the textile industry will not be as fierce," Gunaryo said.
However, according to data from the trade ministry, the textile industry continues to grow healthily, with exports in this year's first quarter rising 4.6 percent to $2,524 million from $2,413 in the same period last year.
However, the association revised downward its 2008 growth target to 10.7 percent from 11.4 percent to take into account the recent increase in fuel prices. (anw)