Textile recovery threatened by a surge in production costs

After rebounding in the first half, Indonesia''s apparel exports are again threatened by a rise in production costs while illegal imports are increasing. The textile and apparel industry even requested a delay in the removal of US and EU quotas beyond 2005.

After falling from US$8.2 billion in 2000 to US$6.9 billion in 2002, Indonesia''s textile and apparel exports rebounded in the first part of the year.

Shipments of woven apparel (HS chapter 62) were up 7.66% in the January-July period to US$1.63 billion according to official data.

Exports of knit apparel (HS chapter 61) rose 7.62% at US$800 million.

Following a continuous rise in the rupiah against the US dollar, orders to Indonesian apparel exporters began slowing down this summer, however.

US imports from Indonesia were down nearly 12% in July in volume terms after declining 2.83% in June, in sharp contrast with a rise of nearly 30% still enjoyed in March.