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Indonesia: Yarn Producers Urge Government to Impose Duty on Imported Yarn

Yarn producers in Indonesia are claiming that imported yarn products have significantly damaged the market for locally made products and are asking the government to impose a temporary safeguard duty.

The Indonesian Synthetic Fiber Association (APSyFI) secretary general, Redma G. Wirawasta told The Jakarta Post local yarn products, specifically some major varieties of polyester, were unable to compete with the cheaper imported yarns because of the country’s higher production costs.

Wirawasta said several foreign yarn producers sold their products on the Indonesian market at lower prices during weak global demand.

“We have seen a rising demand for textile and garment products in recent years as our middle-class population has grown. But most of the garments use large amounts of imported yarns. We hope that the government helps the yarn producers until there is a stable supply and demand in the global market,” Redma told reporters after a meeting with Industry Minister Saleh Husin on Monday.

Redma believes local downstream textile companies would use locally made yarn products if the temporary safeguard duty was put in place.

APSyFI expects the local textile industry’s total consumption of polyester to reach roughly 650,000 tons this year, up from 620,000 tons in 2014, Redma said. Indonesia imported 135,000 tons of polyester last year, a sizable increase from 72,000 tons in 2010, according to the Jakarta Post. Polyester accounted for the largest portion of local textile fiber consumption in 2014, 1.76 million tons or 39 percent, according to APSyF data.

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In 2014, Indonesia’s local yarn makers asked for anti-dumping duties but Redma said although the proposal was imposed, it was not enough to reduce imported products.

The Industry Ministry’s director general of manufacture-based industry, Harjanto, acknowledged that the previous anti-dumping duties were not effective. Therefore, the ministry will control supply and demand in the local yarn market.

“We will support the industry regarding the safeguard policy, but we also see that there are is lot of illegal trading, which should also be curbed together with other stakeholders,” he told the Jakarta Post.

According to Redma, APSyFI formally filed a request for temporary safeguard duties to Coordinating Economic Minister, Sofyan Djalil. Djalil asked the Trade Ministry’s Indonesian Trade Safequard Committee to help them create a plan.

“We have talked to downstream companies and they understand our plan. However, we expect the government to bridge both of us, because it is they who will protect the local textile industry at the upstream to the downstream end,” he added.