News
Home > News > Content
Restricted Development Of Indonesian Garment Industry Doubled Pressure On Export Competition
- Apr 23, 2018 -

The rebound in Indonesia’s apparel exports in the fourth quarter of 2017 was mainly due to the increased market concerns over soaring unit prices for Indonesian apparel exports. It is understood that Indonesia's garment production is hampered by the backwardness of machinery and equipment and the inconvenience of power consumption, while the sustained development of chemical fiber garments supports the export of Indonesian garments. It is expected that with the advancement of the United States' return to the TPP process, Vietnam’s garment export competitiveness will recover.


According to statistics, Indonesia's textile and apparel exports in October 2017 increased by 15.1% year-on-year, 16.1% year-on-year in November and 5.7% year-on-year in December. In October and November, the average unit price of Indonesia's textile and apparel exports increased by 7.3% and 7.1% year-on-year respectively, and in December it was down by 4.4% year-on-year.


Throughout 2017, Indonesia’s textile and apparel exports stagnated, and its export value increased by 5.9% year-on-year in US Dollars. In 2017, Indonesia’s textile and apparel imports increased by 6.1% year-on-year, mainly due to the surge in Indonesia’s domestic population to stimulate consumption. , And Indonesia's garment production is highly dependent on imported yarns and fabrics. It is understood that in 2017 Indonesia's clothing exports to the United States continued to decline, but it is still the fourth largest supplier of clothing imports in the United States, second only to China, Vietnam and Bangladesh.


In the past few years, many factories in Indonesia have been forced to stop production due to the continuous increase in the wages of Indonesian workers, 80% of equipment for more than 20 years, and poor quality of factory power grids. At the same time, the lack of raw materials such as cotton led to the shift of Indonesia's garment production to chemical fiber, coupled with the implementation of preferential export policies of other countries, which has led to a multiplication of Indonesia's export competition pressure.


It is expected that as the United States returns to the TPP process, Vietnam’s export tax-free access policy for the US market will bring a heavy blow to Indonesia’s garment exports.