Trade Surplus Euphoria: Open Data On The Most Potential Export SME Sector

JAKARTA - The total transaction value of the Trade Expo Indonesia Digital Edition (TEI DE 2021) exceeded the target. This is in line with the export performance which broke a record high since 2011. From these figures, we will see that the small and medium enterprise (SME) sector has the most potential.

The total transaction value of TEI DE 2021 reaches 6.06 billion United States (US) dollars or Rp. 86.95 trillion. This exceeded the set target of 1.5 billion US dollars.

"Trade Expo Indonesia, even though it is a digital edition in its 36th year, has achieved a total of 6.06 billion US dollars," said Trade Minister Muhammad Lutfi, Tuesday, December 21, quoted from the Ministry of Trade's Youtube.

The commodity that buyers are most interested in is coal, with a transaction value of US$2.52 billion. Then followed by agricultural products 792 million US dollars, chemical products 316.7 million US dollars, palm oil 307.8 million US dollars, herbs and supplements 300 million US dollars, and processed paper & paper 298 million US dollars.

The country with the largest transaction value was China at 1.68 billion US dollars or 27.8 percent of the TEI DE 2021 results. The second largest was Egypt at 560.2 million US dollars (9.2 percent), followed by Brazil at 285.8 million. US dollars (4.7 percent), Japan at 252.6 million US dollars (4.2 percent), and India at 204.3 million US dollars (3.4 percent).

Potential SME sector

Trade Minister Lutfi highlighted Indonesian herbal and supplement products that are in high demand by buyers. According to him, Indonesia's biodiversity could be a new milestone for future exports.

"From herbs and supplements amounting to 300 million US dollars. This may be because of the COVID-19, it turns out that our biodiversity can be a new milestone," said Lutfi.

To introduce the diversity of Indonesian export products, the government exhibited these products alternately at the Dubai World Expo 2020 which was held in Dubai, United Arab Emirates. Dubai World Expo 2020 will be held on 1 October 2021-31 March 2022.

In the 12th week of the exhibition, for example, as quoted by Kompas newspaper December 22, 2021, the Indonesian Pavilion displayed superior small and medium-sized enterprises (UKM) products made by people with disabilities. These products include splattered batik which is the motif for scarves, skullcaps, and bags. Then there are also brushes from coir and coconut shell waste, coconut shell charcoal briquettes, and herbal products.

Still quoted by Kompas, the Commissioner General of the Indonesian Pavilion Didi Sumedi said that the Indonesian Pavilion showcased different SME superior products every week. These products include food and beverages, home decorations, handicrafts, jewelry, and traditional fabrics.

Potential of herbal products

Of the many superior products of SMEs, based on the data on the largest transaction value, herbal products and supplements are indeed the prima donna. How big is the potential?

According to data from the Central Statistics Agency processed by the Ministry of Trade, Indonesia is the 18th exporter of herbs and herbal supplements in the world. The total value of Indonesian herbal exports to the world in 2021 will reach 41.5 million US dollars, an increase of 10.96 percent compared to 2019.

Herbal medicine exports have been carried out to several countries, including Nigeria and Saudi Arabia. In Nigeria, according to the Head of Indonesian Export Education and Training (PPEI) of the Indonesian Ministry of Trade, Heriyono Hadi Prasetyo, Indonesia is one of the 15 suppliers of herbal products.

“Indonesian herbs and herbal supplements are products that are highly sought after by the Nigerian people, especially northern Nigeria. We hope that in the future there will be more SMEs for herbal products and herbal supplements from Indonesia entering the Nigerian market and increasing Indonesian exports to Nigeria, including SMEs assisted by PPEI," said Heriyono as quoted by Kontan.

Trade Minister Lutfi said the success of TEI DE 2021 was in line with the positive export performance during January-November 2021. The value of Indonesia's exports in that period was US$209.16 billion, the highest since 2011 which amounted to US$203 billion.

"Results from BPS yesterday, our exports from January to November have reached 209 billion US dollars. This means, this is the highest in the last history, which was 2011 at around 203 billion US dollars," said Lutfi.

"This is a positive trade balance of around USD 34 billion, the highest in history. The most important thing is that the non-oil and gas exports amounted to USD 45.29 billion. This is a new milestone, a new trend for Indonesia's exports in the future."

Furniture sector potential

The Coordinating Minister for Economic Affairs of Indonesia, Airlangga Hartarto, said that the positive performance of Indonesia's exports could not be separated from the role of various parties. Including the contribution of small and medium industries (IKM).

"The positive performance of Indonesian exports cannot be separated from the role of various parties, including the contribution of IKM players who were able to survive in the midst of the turmoil of the Covid-19 pandemic," said Airlangga as quoted from the ekon.go.id page.

This is evidenced by the increase in two export commodities based on the IKM sector, namely exports of Timber and Wood Goods (HS 44) which grew 18.31% (yoy) and Furniture (HS 94) which grew to 30.12% (YoY). yoy) during the period January to July 2021. These two commodities are even included in the 20 main contributors to Indonesia's exports throughout 2021.

The timber and wood products sector is valued at 2.55 billion US dollars or 2.12 percent of total exports. Meanwhile, the furniture sector has a value of 1.63 billion US dollars, or about 1.36 percent of total exports.

Minister of Industry Agus Gumiwang Kartasasmita, as quoted by Bisnis, said the productivity of the domestic wood processing industry continues to increase. This, according to him, indicates an increase in demand in the sector.

"It is an honor for me to be among my fellow industry players who continue to create new market opportunities and build economic independence through new investments."

Indonesia is said to be in the row of exporters of major furniture products such as China, Germany, Poland, Italy, and Vietnam. In 2020, the largest export destination countries for Indonesian furniture are the US, Japan, the Netherlands, Belgium, and Germany.

*Read other information about EXPORTS read another interesting article from Ramdan Febrian Arifin.