Impressions of the Trade War, Indonesia Flood of Orders from the US

A number of US importers seem to have moved their orders to Indonesia. At least, export data from Central Java and the Special Region of Yogyakarta to the country can be evidence.

In a presentation to the media Thursday (30/8). Minister of Trade Muhammad Lutfi said that his party continues to work to overcome the scarcity of export containers that is currently happening. These efforts, among others, are carried out through collaboration with various parties such as the Indonesian Chamber of Commerce (Kadin), the Indonesian Logistics and Forwarders Association, as well as main line shipping operators (MLO).

This cooperation is needed to help business actors to obtain containers so that exports can continue. This step is strategic, so that Indonesia can take advantage of the global economic recovery.

Minister of Trade Muhammad Lutfi.  (Photo: Public Relations of the Ministry of Trade)

Minister of Trade Muhammad Lutfi. (Photo: Public Relations of the Ministry of Trade)

“The problem of scarcity of containers or containers becomes a serious problem when Indonesia is flooded with orders, due to the trade war between the United States and China,” said Lutfi.

According to the Ministry of Trade, the positive trend due to the trade war between the two countries is at least felt by the electronics, footwear, garment and furniture industries. At least, exports to the United States and a number of other countries in the future will run more easily, through the agreed commitments.

The list of the highest export commodities in Yogyakarta.  (Graphic: BPS DIY)

The list of the highest export commodities in Yogyakarta. (Graphic: BPS DIY)

Lutfi said, for furniture, there has been a commitment to provide 800-1000 containers per month for delivery to New York, Los Angeles, Savannah, Baltimore, and Florida. Meanwhile, the food and beverage industry is fulfilled by providing 3,500-3,800 containers per month for shipping to various parts of the world. This commitment comes from the main line shipping operator or MLO.

Latest BPS Data

Indonesia’s exports to the United States are indeed growing. Central Java Statistics Agency (BPS) data, places the United States as the number one export destination country. This was revealed in a data presentation by the Coordinator of the Distribution Statistics Function, Central Java BPS, Arjuliwondo, Friday (1/10).

Coordinator of Distribution Statistics Function, Central Java BPS, Arjuliwondo.  (Photo: Central Java BPS)

Coordinator of Distribution Statistics Function, Central Java BPS, Arjuliwondo. (Photo: Central Java BPS)

“The main export share country is, of course, still the United States. Our exports during the months of January to August reached 2.5 billion US dollars. That is 39.83 percent of the total exports during that period,” said Arjuliwondo.

Exports to the United States were dominated by clothing and accessories, both knitted and non-knitted, which accounted for 46 percent. While below it are furniture, lamps and lighting equipment which account for about 10 percent.

Central Java export destination for the period January-August 2021. (Graphic: Central Java BPS)

Central Java export destination for the period January-August 2021. (Graphic: Central Java BPS)

He added that the total non-oil exports from January to August 2021 reached 6.27 billion dollars. The non-oil and gas export destinations under the United States are Japan, China, the European Union and ASEAN, respectively. Exports to Japan were valued at US$571.1 million, while to China reached US$432 million.

Especially last August, Central Java BPS recorded a product export value of US$967.6 million. That figure means there is an increase of 18.5 percent compared to July. Meanwhile, in terms of commodity types, exports of non-oil and gas goods recorded an increase of 12.07 percent and oil and gas goods increased by 167.8 percent.

“It means there is a pretty good increase or in other words the economy has risen,” added Arjuliwondo.

Meanwhile, according to the Head of BPS DI Yogyakarta, Sugeng Arianto, the United States also became an export destination last August.

“Based on the destination area, there are three countries that are Yogyakarta’s main export destinations, namely the United States, Germany and Japan. Of these three countries, we add up to almost 60 percent,” said Sugeng in Yogyakarta, Friday (1/10).

Head of BPS DI Yogyakarta, Sugeng Arianto.  (BPS DIY)

Head of BPS DI Yogyakarta, Sugeng Arianto. (BPS DIY)

The total value of Yogyakarta’s exports to the United States in August 2021 is 18.5 million US dollars or 42 percent, followed by Germany 3.7 million US dollars or 8.4 percent and Japan 3.5 million US dollars or 7.9 percent. Meanwhile, Yogyakarta’s total exports to all countries in August 2021 will be US$43.9 million.

If calculated cumulatively, Yogyakarta’s export value for the January–August 2021 period is US$342.7 million. This figure is up 41.38 percent compared to the same period in 2020 which also indicates an improvement in economic conditions.

Five countries with the highest increase in exports (blue) and five countries with a decrease (red) from Central Java.  (Graphic: Central Java BPS)

Five countries with the highest increase in exports (blue) and five countries with a decrease (red) from Central Java. (Graphic: Central Java BPS)

Regionally, exports to the European Union reached 12.9 million US dollars, while the ASEAN region only recorded 0.9 million US dollars.

“Most of them are non-knitted garments, valued at US$13.8 million or 31 percent. Followed by furniture, home lighting by 5.9 million US dollars or 13.4 percent. Followed by knitted goods amounting to 3.8 million US dollars or 8.6 percent,” continued Sugeng.

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