Teguh Prasetyo – Indonesian exporters are projecting an increasingly bleak outlook for the coming months, with January-April orders likely to drop by as much as 30 percent, particularly in commodities and manufacturing, raising the specter of more job losses.
As the global economic picture has darkened, importers in target countries have cancelled orders for a wide range of Indonesian products including crude palm oil, rubber, textiles and garments, footwear, fishery products and furniture, Toto Dirgantoro, secretary general of the Association of Indonesian Exporters, said on Wednesday.
Palm oil cancellations have come particularly from Chinese and Pakistani importers who have found that sharply dropping international prices have rendered the contracts they signed earlier are no longer profitable.
Rubber prices have likewise fallen to about $11,100 per ton, 56 percent off their cyclical high.
The footwear industry expects to have difficulty matching not only the $1.8 billion in exports recorded in 2008, but even the $1.6 billion in 2007.
The Indonesian Textile Association said exports were set to fall by up to 20 percent this year from $10.48 billion. The textile industry is the country's largest employer, with an estimated 3.5 million workers in more than 4,500 factories.
"The most significant decreases in orders are from traditional textile and footwear markets in the United States, the European Union, or EU, and Asean member countries," Toto said.
January exports have already fallen by 17.7 percent from the previous month, the biggest month-on-month drop in more than 22 years, the Central Bureau of Statistics reported on Monday. The bureau said the most significant component was decreasing oil and gas exports, which fell by 23.85 percent to $947.1 million. Non-oil exports fell by 16.67 percent to $6.2 billion.
Agus Tjahajana, secretary general of the Ministry of Industry, said separately that the ministry would continue to implement industrial development programs including machinery modernization, investment promotion, quality control improvement, strengthening small- and medium-sized manufacturers and local product promotion. The machinery modernization program will be continued this year.
"Strengthening the role of small and medium manufacturers is our priority, as smaller firms tend to be more resilient in times of financial crisis, and collectively they employ large numbers of workers throughout the country," he said.