Indonesia Cotton and Products Update November 2016 (updated Dec. 3, 2016 10.55 AM)

Indonesia Cotton and Products Update November 2016

Depressed consumer purchasing power in Indonesia and weaker export markets for finished Indonesian textiles has driven Post’s estimate of MY2015/16 Indonesian cotton consumption to 2.94 million bales from the previous estimate of 3.0 million bales.MY 2015/16 Indonesian cotton imports, in-line with consumption, are also expected to decrease from 3.0 to 2.9 million bales. Indonesian cotton imports are also expected to continue declining in MY 2016/17 to 2.75 million bales.

Situation and Outlook

Weak demand in importing countries is driving Indonesian textile export declines. Depressed consumer purchasing power, exacerbated by the weak rupiah, is also resulting in lower domestic sales of textiles in the Indonesian market. Post therefore estimates MY 2015/16 Indonesian cotton imports at 2.9 million bales compared 3.345 million bales in MY 2014/15.  Post expects MY 2016/17 Indonesian cotton imports to further decrease to 2.75 million bales due to the same factors.

Stat 1

The Indonesian Textile Association (API, Asosiasi Pertekstilan Indonesia) reported that the value of Indonesian textiles and textile product exports during the period of January to July 2016 declined by 4.8 percent compared to the same period in 2015, (from USD 3.11billion to USD 2.96 billion). This includes a significant decrease of cotton fabrics exports from 138000 metric t in CY 2014 to 16000 metric t during the January-August 2016 period. Japan, Belgium, Italy, and the United States are Indonesia’s major export destinations for cotton fabric. 

Stat 2Stdat 2 BStat 2 C

The Indonesian rupiah has ranged from Rp. 13,204/USD 1 at the end of April, 2016 to Rp. 13,084/USD 1 on November 9, 2016.  There are no updates on Indonesian cotton production.  Indonesian cotton production is dwindling and lacks of incentives to grow. Therefore, Post maintains MY 2015/16 and MY 2016/17 Indonesian cotton production unchanged at five million bales.

Table 3Table 3 A

The Indonesian spinning sector produced spun yarn and sewing thread from 288 companies in CY 2015 (two new companies were added in 2015). Industry sources report that the Indonesian spinning industry consumed a total of 1.842 million metric t of fibre as raw material annually, consisting of cotton (34.8 %), manmade fibre (65 %), and others (0.1 %) in CY2015.

Table 4Table 4 A

Indonesia exported approximately 45 percent of its yarn production in 2015. In CY 2014, Indonesian spinning mills ran at 80.76 % mills, with total installed capacity of 11.92 million spindles, only ran 65.38 % capacity.

Table 5Table 5 A

Tablöe 6Table 6 A

Table 7Table 7 A

Table 8Table 8 ATable 8 B


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