The Indonesian Textile Association (API) stated that the national textile and textile product (TPT) trade balance surplus is believed to grow positively again in 2020. However, the growth of the textile industry as a whole will still move in the red zone due to the Covid-19 pandemic.
Based on API records, the national textile trade balance surplus has consistently decreased since 2016. However, the textile trade balance surplus has begun to grow again in 2019 and is predicted to continue in 2020.
"In January-October 2020 [the surplus value] increased by more than US $ 3 billion. In 2019, the surplus was US $ 3.5 billion. We are optimistic [it can grow from 2019]," said Secretary General of API Rizal Rakhman.
However, Rizal stated that the low utilization of the locally oriented textile industry has made the performance of the textile industry as a whole still negative. This is because the domestic market-oriented textile industry contributes around 50 percent of the total performance of the national textile industry.
The Ministry of Industry (Kemenperin) predicts that the growth of the textile industry throughout 2020 will fall by 5.41 percent, while the apparel industry will drop by 7.37 percent. In other words, the growth of the textile industry in 2020 is estimated to decline by around 6.39 percent on an annual basis.
Rizal assessed that the trigger for the contraction was due to the flood of imported garments in the country. Rizal suspects that the fast recovery of the textile industry in China from the pandemic is one of the factors driving the growth of garment imports.
"Export performance will not have a significant effect on foreign exchange if imports are high. The main trigger is uncontrolled garment imports," he said.
Meanwhile, the Ministry of Industry predicts that the apparel industry will grow 3.75 percent in 2021. In other words, the national garment industry cannot return to its pre-pandemic position this year.
Even so, Rizal assessed that the growth of the national garment industry would be higher than the forecast if the pharmaceutical safeguards could be implemented no later than the first quarter of 2021. According to him, the issuance of safeguards before this momentum is important so that the local garment industry can get the blessings of Ramadan 2021 which falls in April 2021.
"The growth of the downstream textile industry will move up. We learned from the safeguards for threads, fabrics and curtains. Garments may be more progressive in their safeguard regulations," he said.