ANN/THE JAKARTA POST – Indonesian manufacturers are under pressure due to the weakening rupiah against the US dollar and rising oil prices, resulting in increased input costs for the local industry.
The rupiah has been declining in the recent weeks due to uncertainties related to United States monetary policy and geopolitical conflicts. The currency was priced between IDR6,200 and IDR16,300 per dollar since last week after breaching IDR16,000 per dollar at the start of the Hari Raya.
Meanwhile, the international oil price benchmark Brent Crude hit a six-month peak last week, reaching USD87.29 per barrel before declining three per cent, as reported by Reuters. Some analysts anticipate it could climb further to USD90 per barrel.
Chairman of the Indonesian Textile Association Jemmy Kartiwa told The Jakarta Post the sharp decline in the rupiah has exacerbated the challenges faced by the domestic textile industry, given tighter export markets and increased competition from foreign goods. “The textile industry is highly dependent on the volume of imports,” Jemmy said.
Indonesian Food and Beverage Producers Association (Gapmmi) chairman Adhi S Lukman said on Thursday both the exchange rate and oil prices had led to rising energy and logistics costs, which were then reflected in increased production costs.
Pressure also come from raw materials, as the industry sources most of its inputs from overseas, he said.
“Some commodities have already seen price increases, like plastic pellets for food and beverage packaging,” Adhi said, “while prices of raw materials that had already increased include grains, meat and milk.”
“We are waiting for government intervention in the rupiah exchange rate and government efforts to reduce certain costs as compensation for the (increase in) production costs that have occurred,” Adhi said.
