ASIATODAY.ID, JAKARTA – The Central Statistics Agency (BPS) reports that Indonesia’s export market is starting to shift from China to the United States (US).
This can be seen from Indonesia’s exports to China which fell by 11.95% from January to May 2024 (year-to-date/ytd). In line with this decline, Indonesia’s exports to the United States (US) actually showed an increase of up to 8.15% (ytd).
Deputy for Production Statistics at BPS Indonesia, M. Habibullah, explained that both the value and volume of Indonesia’s exports to China had indeed recorded a decline.
“If we look at the value of Indonesia’s exports to China in January-May 2024, it fell by 11.75% compared to January-May 2023. The commodities mainly exported to China are HS 72 steel and HS 27 mineral fuel,” he said at a press conference. Wednesday, June 19, 2024.
In fact, exports of iron and steel commodities in general in May 2024 are increasing by 1.22% (mtm) and 8.3% (yoy). Not only on a current year basis, Indonesia’s exports to China in May 2024 were worth US$4.73 billion, lower than the same month last year at US$4.78 billion or down 0.95% (yoy).
The decline was pressured due to the contraction in the value of the three main export commodities to China. First, iron and steel fell 5.02% (ytd). Then mineral fuel with the HS 27 code fell by 27.78% (ytd) and exports of animal/vegetable fats and oils (HS 15) which contracted by 21.72% (ytd).
In terms of non-oil and gas export volume to China, BPS also recorded a contraction of 6.29% (ytd). On the other hand, Indonesian exports to the US actually recorded an increase in value of 8.15% (ytd) and in volume reaching 29.74%. Primarily, this came from machinery and electrical equipment (HS 85) whose volume jumped 119.42% (ytd) as well as clothing and accessories/knitted products (HS 61) 11.22%. In value, these commodities increased by 4.65% and 3.45% respectively.
However, the value of Indonesia’s trade with China is still greater than that of the US during this shift. Throughout this year until May, the value of Indonesia’s non-oil and gas exports to China reached US$22.37 billion while to the US it was only US$10.22 billion.
The Coordinating Minister for the Indonesian Economy, Airlangga Hartarto, previously said that he was very regretful about this market shift, because Indonesia had not yet made a profit.
The reason is that Indonesia does not yet have a Free Trade Agreement (FTA), where the FTA will reduce the component of export costs, namely import levies in export destination countries which are FTA partner countries.
“It’s just that because we don’t have an FTA, the ones who benefit are still Vietnam, Thailand and other countries in ASEAN. “So we are preparing for trade with the US,” he said. (ATN)
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