Jakarta, Sept 14 (Antara) - Against the backdrop of outcries on the US dollar's appreciation, export-oriented industry could adversely reap benefit from the greenback strengthening.
The rupiah currency which last January was about Rp13,300 per US dollar has fallen sharply, even reaching Rp14,922 (about 12.1 percent) per US dollar on Wednesday last week (Sept 5). It far exceeded the 2018 State Budget assumption set at Rp13,400 per US dollar. Bank Indonesia's middle rupiah exchange rate was recorded at Rp14,927.
However, the rupiah's fall does not necessarily means catastrophe for the business sector in the country, as export-oriented local industry could adversely reap profit.
This includes cottage industry which produces handicraft products and batik clothes, or even the fisheries and agricultural sectors which produce fish and palm oil products.
Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for Pekalongan city in Central Java, Nanggolo Wulyo Waniaji, said on Tuesday that handicraft businesses gained more benefits due to the strengthening of the greenback against the rupiah.
The local handicraft producers use local raw materials for their products, and so they do not depend on imported materials. "Local producers use local raw materials. They export their goods, and so they earn more in term of values," he stated.
Waniaji remarked that businesses which use imported raw materials feel the negative impact of the rupiah's weakening against the US dollar.
In the meantime, Cirebon batik makers, West Java, claimed to benefit from the weakening of the rupiah's exchange rate against the US dollar, especially for batik clothing they exported.
"There must be an advantage, as when the value of the dollar rises, the export value of our batik also increases," Cirebon EB Batik Manager Hisyam Suleiman remarked in Cirebon.
Sulaiman said income from batik exports rose, although the volume of batik exports did not increase or remained the same as the exports before the US dollar increase.
According to Sulaiman, the increase in income is not too high, ranging from 10 to 20 percent as compared to the earlier rise. In August, Sulaiman had exported 400 pieces of batik products.
"Indeed, the amount of our exports is not too large. Every month, the volume varies, and usually in one month, we only export one to two containers," he stated.
He claimed to export batik products to several countries, such as Malaysia, Vietnam, Thailand, China, and France.
Sulaiman remarked that the number of exports ranged from 20 to 30 percent of the total production, and this has been ongoing for the past few years.
Even so, he acknowledged that exports were still inferior to Malaysia and China, especially in printed batik, but in written batik, he admitted he could surpass the two countries.
"We are still behind Malaysia and China in terms of the exports of printed batik, but for written batik we win," he added.
The dollar appreciation also brings benefit to fishermen who fisheries products are for export. In Cilacap, Central Java, for example, fishermen, who are members of the Minosaroyo Village Unit Cooperatives (KUD), claim to have benefited from the strengthening of the US dollar exchange rate against the rupiah.
"Strengthening of the US dollar benefits our fishermen members, as we export all of the caught fish," Chairman of Minosaroyo KUD, Untung Jayanto in Cilacap stated on Saturday (Sept. 8)
He said that until August 2018, the total production in eight Fish Auction Places (TPI) managed by the cooperatives reached 4.8 million kilograms (kg), with a value of Rp44.6 billion, and in August 2018 alone, it had reached Rp16.7 billion. Hence, the total production value is targeted to reach Rp100 billion by the end of the year, or increase as compared to last year's Rp75.2 billion in 2017.
"Basically, fishermen are not negatively affected by the rise in the dollar value, and even when the monetary crisis took place in 1998, the price of shrimp rose from Rp10 thousand per kg to Rp120 thousand per kg. Now, the price hikes are almost the same," he pointed out.
This is because 90 percent of the fish caught in Cilacap is exported to China, South Korea, and Japan, among others.
The price of small shrimp, for instance, in the last few days had increased from Rp30 thousand to Rp150 thousand per kg, while the price of "jerbung" shrimp had reached Rp200 thousand per kg.
The appreciation of the greenback is also an advantage for oil palm farmers, including those in Riau Province in Sumatra. Riau Governor Arsyadjuliandi Rachman said that export-oriented palm oil industry has so far benefited from the strengthening of the US dollar against the rupiah.
The governor who is familiarly called Andi Rachman said the Riau palm oil industry got a great benefit from the rising US dollar exchange rate.
Hence, he hopes that these benefits can also be felt by the community, especially those who work as oil palm farmers.
The increase in the value of the dollar against the rupiah will cause plus and minus effects, especially for society and industry. Yet, export-oriented industries which import little raw materials will certainly reap the benefits of the dollar appreciation against the rupiah.
"Conditions like this have a beneficial effect on the industry," the governor said recently (Sept 5).
Palm oil is one of Riau's mainstay commodities. The province's oil palm plantations cover more than two million hectares. Palm oil has become a mainstay because it contributes greatly to Riau's trade balance from the non-oil and gas sector.
Based on data from the Central Statistics Agency (BPS) of Riau, in July 2018, Riau's trade recorded a balance surplus of around 1.29 billion US dollars.
This happened because the surplus in the non-oil and gas sector amounting to 998.23 million US dollars, while the oil and gas sector amounted to 290.45 million US dollars. *** 3 ***(A014/S012)(T.A014/A/BESSR/Suharto) 15-09-2018 00:51:5 |
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