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Indonesia'S Textile And Garment Industry Suffered Unprecedented Heavy Losses

2020/10/23 11:30:00 154

Affected by the new crown epidemic, Indonesia's textile and clothing industry has encountered unprecedented challenges. The epidemic blockade has caused domestic and foreign demand to suffer heavy losses. A large number of workers have lost their jobs, and the demand for textile production and cotton import has shrunk significantly.

With the outbreak of the second wave of Newcastle disease, Indonesia began a two-week second blockade on September 14, and then extended it for another two weeks to mid October. As of September 25, Indonesia had 262000 confirmed cases and 10100 deaths.

Due to the social isolation between Indonesia and the main export markets from April to may, the terminal demand for textiles and clothing at home and abroad dropped sharply. In May, the clothing consumption in the United States and Europe decreased by more than 60% and 50% respectively, and the domestic retail demand in Indonesia also decreased sharply. Although online sales play a buffer role, but Indonesian consumers are not used to online shopping clothing.

The decline in domestic and foreign textile and clothing demand in Indonesia has led many textile mills to only complete the production orders of high price raw materials. The factory start-up rate from March to June was only 50%, far lower than that of 70-80% in the same period of last year. The operating rate of garment factories has also dropped from 90% to 80% under normal conditions. The decrease of textile and clothing demand has a great impact on Indonesia's economy. In 2019, the number of employees in Indonesia's textile and garment industry will reach 3.75 million, accounting for 3.1% of the Indonesian labor force. According to the data of Indonesian chamber of Commerce, as of July, the number of newly unemployed in Indonesia reached 6.4 million, including 2.1 million in textile and garment industry, accounting for 33%.

Affected by this, Indonesia's cotton import volume from January to July this year was only 302 thousand tons, with a year-on-year decrease of 20%. Among them, the cotton import volume of the United States was 109000 tons, a year-on-year decrease of 32%. From June to August this year, China imported a large number of American cotton, forcing Indonesian buyers to switch to Brazilian cotton and African cotton.