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Indonesia's yarn makers act to safeguard domestic interest

Yarn manufacturers in Indonesia want temporary safeguard duty on imported yarn products. Yarn manufacturers are keen to protect the country’s domestic industry whose products, particularly polyester, have struggled to compete with cheaper imported yarns due to higher production costs.

Foreign yarn producers have essentially dumped their products on the Indonesian market, selling them at lower prices, in an effort to compensate for weak global demand. There is a rising demand for textile and garment products in Indonesia. But most of the garments use large amounts of imported yarn. Indonesia’s 2014 total consumption of polyester was 6,20,000 tons, 1,35,000 of which was imported. Imports have greatly increased over previous years.

It is hoped that the measures called for will induce downstream textile companies to use local yarn products. Competition in the polyester sector has been particularly fierce and Indonesia’s local manufacturers have found themselves on the losing end of recent battles.

Indonesia is not the only country in Southeast Asia to find itself in a conundrum vis-à-vis yarn and the products made out of it. As a part of the ongoing Trans-Pacific Partnership negotiations, the US is currently pushing Vietnam to drastically reduce imports of textiles from China (which is not a part of the TPP). It is the intention of the United States to push Vietnam to begin importing more fabric from the US, thus growing its own fabric industry and creating more jobs.


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