The impact of coronavirus outbreak is predicted to significantly affect Indonesia’s export this year. Hence, optimizing the export of products with less impacted and creating a more efficient supply chain can help the export be spared from a more serious condition, some have said.
Kasan Muhri, Head of Board for Trade Analysis and Development (BP3) at the Ministry of Trade said the Indonesia’s export in January remains an indicator. In January, Indonesia’s export was drop. Some neighbour countries of Vietnam, South Korea, Japan, Pakistan and Chile also experienced export drop.
As reported earlier, total exports stood at $13.41 billion, down by 7.16 percent from the previous month and by 3.71 percent from January last year. Total imports were valued at $14.28 billion, a decline of 1.6 percent from December and 4.78 percent from January last year.
Indonesia total export to China fell 12.07% in January, significantly contributing to the overall Indonesia’s export drop and a bigger trade deficit during the month, according to Central Bureau of Statistics BPS.
“So, there are about five to six countries that have released data (trade) in January, with exports and imports generally down. Brazil faced the highest drop, down by double digits,” Kasan said.
The coronavirus outbreak in Wuhan has hit Chinese economic activity. Some trading activities in the country also stopped. One of the countries that has released data on declining trade performance is South Korea. “We see this will definitely impact Indonesia economy,” Kasan said.
Quoting World Bank data and analysis, Kasan said that each 1% decrease in China’s gross domestic product (GDP) will cause a drop in Indonesia’s economy by 0.3%. He said, the coronavirus is projected to make China GDP fall by 2%, making Indonesia’s economy decline by 0.6%.
Some Indonesia’s export products will be seriously hit by this case, significantly affecting both the fabrication production and export demand, said Kasan.
General Secretary of the Indonesian Fiber and Filament Association (APSyFI) Redma Gita Wirawasta said that the industry of textile and related textile product (TPT) will face a significant drop in export and import due to this case (coronavirus).
“Surely, this will disturb our industry production that will finally disturb our export,” he said.
General Secretary of Furniture and Handicraft Industry Association (Himki) Abdul Sobur, said the furniture and craft industry would be stable, potentially helping the country’s exports performance. This is because this industry does not hang on import of raw material. He said, the raw material for furniture and handicraft are local products such as wood, rattan and bamboo, and a little metal and plastic.
In addition, most of the furniture exports are destined to Europe and the United States (US). The US
market is the main destination with a value of US $ 700-800 million per year. “This is a high contribution to the total national export value,” Sobur reminded.
He said, the US-China trade war and coronavirus outbreak would trigger a bigger export volume to USA.
To help the Indonesia export performance, Deputy Chairman of Indonesia Businessman Association (API) Shinta Widjaja Kamdani urged the government to stimulate the export-oriented manufactures. In addition, she called for a more efficient supply chain to support production.
“This include improvement in procedure of export import to create a more efficient supply chain,” said Shinta.