Dzulfiqar Fathur Rahman, Jakarta – The government is urging small and medium enterprises (SME) to export food and beverage products that have gained popularity in overseas markets amid the slowdown in global trade due to the COVID-19 crisis.
Victoria Simulangkit, the deputy of production and marketing at the Cooperatives and SME Ministry, said on Monday that products like carica (mountain papaya), tempeh chips, crabs and palm sugar appeared to catch buyers' interest abroad.
Producers of the products, most of which are based outside of Jakarta, have managed to penetrate foreign markets, such as Malaysia, Thailand, Japan and China, according to Victoria.
"Food and beverages is one of the sectors that see high demand both at home and abroad, because people need nutritional intake to maintain their immunity and thus stay healthy," Victoria said in a virtual discussion on Monday.
"SMEs' products can become more than just raw materials for industries. SMEs can make products that catch market interest," she added.
Indonesia's exports fell by 8.36 percent annually to US$13.07 billion in August, as the pandemic upended global demand, according to Statistics Indonesia (BPS) data.
The World Trade Organization (WTO) projects that the global trade volume will contract by anywhere between 13 percent and 32 percent this year.
Meanwhile, despite accounting for roughly 60 percent of Indonesia's economy, small businesses' contribution to national exports is only around 14 percent, according to the ministry.
To boost their exports, Indonesian small businesses should monitor recent trends among consumers in export destination countries, said Victoria.
"We encourage SMEs to [learn] to read the food trends in the destination countries, like organic food. This provides an opportunity for Indonesian SMEs," she said, adding that vegetarian and healthy instant food were also trending lately.
Adhi Lukman, the chairman of Indonesian Food and Beverage Producers Association (Gapmmi), said small businesses still faced challenges in managing sanitation and food safety and were finding it difficult to adapt to customers' needs during the pandemic.
Some SMEs may not have the necessary facilities like equipment, tools and clean water resources, and may lack knowledge on the proper implementation of health protocol and social distancing, said Adhi.
Furthermore, to export their products, small businesses also needed assistance in the form of market intelligence related to regulations in the destination countries and information on trade exhibitions and competitors' activities, Adhi added.
"Many of our SMEs still lack knowledge, either on regulations, products or standards. Hence, sometimes their compliance with the regulation in the destination country is still far from what the destination country demands," said Adhi.Indonesia's overall exports of semi-processed and processed food reached $4.33 billion in the January – July period, marking an annual increase of 5.6 percent, according to Adhi, quoting data from BPS and the Trade Ministry.