KUCHING: Imported furniture, which is mainly from China, is flooding the Indonesian market.
According to the Indonesian Furniture and Craft Industry Association’s analysis on data from the Central Statistics Agency, imports of furniture products surged by about 29 per cent in first quarter 2024 (1Q2024) from a year ago to total value of IDR2.07 trillion (RM578.8 million).
Imported furniture products from China contributed the most (83.76%) to total imports, followed by Vietnam (3.16%), Malaysia (2.25%), United States of America (1.94%).
Other shippers of mainly high-value furniture products came from Italy (1.61%), Germany (1.32%), Singapore (0.8%), Taiwan (0.77%), South Korea (0.53%) and Japan (0.53%).
“Especially from China, the onslaught of export destination countries is getting stronger, there is a trend of people buying simple and cheap smart furniture goods,” said association chairman Abdul Sobur.
He assessed that the Indonesian government needs to increase the content of the Domestic Component Level, known as TKDN, which represents the value of using goods or services sourced from within the country, by 65 per cent to 85 per cent in furniture products.
This policy aims to advance Indonesia’s economy by supporting local industries and reducing the public’s dependence on imported products. TKDN is also one of the government’s instruments to develop domestic industries and promote the use of local products.
On the other hand, Indonesia’s imports of handicraft products fell by 7.54 per cent in 1Q2024, and the value of imports was still high at 1.8 trillion rupiah (RM504.9 million), reported International Tropical Timber Organisation (ITTO) in its tropical timber market report (July 16-31, 2024).
China is still the largest contributor to handcrafts imported by Indonesia, accounting for 65.75 per cent, followed by South Korea (6.87%), Hong Kong (5.71%), Vietnam (3.4%), Japan (3.25%), Singapore (3%), Taiwan (1.86%), India (1.77%), Italy (1.73%) and US (1.49%).
Sobur said the decline in imports of handicraft products was due to the decrease in the people’s purchasing power, and that craft products are competitive.
On a separate matter, the Indonesian Environment and Forestry Minister Siti Nurbaya has reported that progress in determining forest areas up to June 2024 had covered 106,554,227 hectares or 84 per cent of the country’s total forest area.
She acknowledged that there are numerous challenges in determining or confirming forest areas, with one of the main issues being related to forest boundaries part of the One-Map policy, a valuable in large-scale spatial planning exercise to address conflicts related to overlapping land uses and hastening the implementation of infrastructure and regional development programmes.
Meanwhile, Agus Justianto, chair or Indonesia’s FOLU Net Sink 2030 working team at the ministry, said that developing energy plantations (HTE) is a viable element to increase carbon absorption as harvested wood can be used as raw material to generate electrical power.
Nationwide in Indonesia, there are currently 25 forest utilisation license units that support HTE development. In addition, state-owned enterprises manage Java’s forest and have allocated 67,000 hectares for HTE development.
According to director general of sustainable forest management at the ministry, standardisation is essential for enhancing sustainable forest management and optimising the utilisation of forest products.
The Indonesia government emphasised the importance of harmonization of forest management standards at the recent 27th meeting of the ASEAN Working Group on Forest Product Management.
“Indonesia has achieved significant progress in collaborating with ASEAN member countries, including in the area of the legality and sustainability of forest products. One notable achievement is the certification system that guarantees the legality and sustainability of forest products. This system is a strategic programme that ensures wood products and raw materials are obtained from sources that meet legal and sustainable management standards.”
The meeting produced several regional policy recommendations including the implementation of the ASEAN cooperation action plan for the development of forest products.
The cooperation action plan covers areas related to trade facilitation, market access and efforts to increase the competitive of ASEAN forest products, reported ITTO.
