Dzulfiqar Fathur Rahman, Jakarta – The Trade Ministry has lifted an export ban on personal protective equipment (PPE) amid oversupply in national production as it seeks to restore exports hard hit by the COVID-19 economic crisis.
Ministerial Regulation No. 57/2020, issued by Trade Minister Agus Suparmanto on Tuesday, will allow manufacturers to export surgical masks, N-95 masks, coveralls, surgical gowns and raw material to make face masks, thereby annulling the previous ban that had been imposed to ensure domestic supplies during the pandemic.
Manufacturers can apply for the export permit via the government's export-import online licensing system Indonesia National Single Window (INSW). They will then be required to provide documents such as a business permit, six-month export plan and statement to prove that they have stocks to meet domestic demand, in order to be granted export approval.
"This trade ministry regulation that I have signed and that is currently undergoing the legislation process at the Law and Human Rights Ministry aims to spur national economic growth, particularly for manufacturing, and improve our export performance amid the COVID-19 pandemic," the minister was quoted as saying in a statement on Tuesday.
The country's exports have fallen by 28.95 percent year-on-year (yoy) in May to US$10.53 billion, the lowest level since July 2016, due to reduced shipments of coal, coffee, palm oil, as well as oil and gas.
Meanwhile, textile manufacturers, who are suffering from dwindling demand due to the pandemic, have switched to produce PPE products, leading to an oversupply of the domestic production.
For example, Indonesia's production capacity of surgical mask has more than doubled to 394 million per month in April compared with the pre-pandemic level, according to an estimate by the Industry Ministry. The supply is expected to exceed domestic consumption by 2 million this year.
Meanwhile, manufacturers can now produce 54 million coveralls a month, dwarfing the pre-pandemic figure of 1 million per month.
Agus said the now-defunct export ban under Trade Ministery Regulation No. 23/2020 in part made the excessive medical supplies possible. The regulation had been put in place to ensure national demand for PPE during the ongoing health crisis was met.
In the early days of the COVID-19 pandemic, prices of face masks skyrocketed in several parts of the country as people stockpiled protective supplies, such as masks and hand sanitizer, to protect themselves from the virus.
"The temporary ban had a positive impact on an excessive supply of antiseptic," Agus said. "With the issuance of this trade ministry regulation, we hope that it will provide certainty for medical equipment manufacturers in Indonesia."