People's purchasing power is feared to decrease if the price of fuel oil (BBM) rises has the potential to worsen the condition of the national textile and textile product (TPT) industry. General Chairperson of the Indonesian Filament Yarn and Fiber Association (APSyFI) Redma Gita Wirawasta said rising fuel prices and declining purchasing power would force the industry to cut production. "Reducing the amount of production is one way out for national textile industry players to anticipate the domino effect of rising fuel prices," said Redma, Thursday (1/9/2022).
Redma revealed that the national textile industry has the potential to reduce production by 15 in September 2022. Of course, this condition undermines the current trend of increasing capacity and realization of textile production.
For information, the Ministry of Industry (Kemenperin) noted that until the end of August 2022 the national textile sector was able to increase production capacity and realization by 21.75 percent and 21.22 percent, respectively.
In addition, disruption to textile production is not only caused by the domino effect of rising fuel prices. Another major factor that makes textile industry players reduce the amount of production is the proliferation of imported goods circulating in the domestic market.
Redma explained that there are around 150 million meters of imported fabrics that have been circulating in the country. This figure has the potential to increase because until the end of the year the government opens entry permits for as many as 1 billion meters of imported fabric.
"The largest imported goods come from China. It is noted that goods from China make up 40 percent of the total imported goods. Of the approximately US$9 billion worth of imported fabrics, goods from China are worth around US$3 billion," he explained.
Furthermore, Redma said the condition was exacerbated by the unfriendly conditions in export markets such as the United States (US) and countries in Europe due to inflation.
Until the end of August 2022, said Redma, 40 percent of orders from the export market had disappeared due to the impact of inflation in the US and Europe. Previously, the association estimated that the value of national textile exports would likely fall in the range of 10 percent by the end of this year.
"So, the cake is getting smaller, but competition with imported goods in the domestic market is getting tighter," he said