JAKARTA – Indonesian farmers are left with an over-supply of produce originally intended for China after the Ministry of Trade on Feb 5 stopped all cargo flights to the People’s Republic due to the outbreak of the COVID-19.
Mulyanto, chairperson of Indonesia-China Commodity Exporters Association (PEKIT), told Salaam Gateway all 107 members are affected by the situation.
“This virus is hampering our businesses, all flights are cancelled and we cannot deliver our commodities,” said Mulyanto.
“Prices have dropped and our members are holding back production activity because they don’t as yet have alternative markets [to sell to],” he said.
The products affected include bird’s nest, pineapple, mangosteen, and other fruits that are normally flown to importers and retail associations in China to be distributed downstream to the retail market. Each member of PEKIT typically exports 10 to 30 tons per shipment.
Bambang Trianto, Director of Indonesia’s largest edible bird’s nest producer PT Adipura Mranata Jaya, and chairperson of Indonesia Bird’s Nest Entrepreneurs Association (PPSBI) told Salaam Gateway all producers are currently taking a wait-and-see approach.
Indonesia produces more than 1,500 tons of bird’s nest each year. 130 tons are exported, with 80% going to China either directly or via Hong Kong, Singapore, or Australia.
“Our company has more than 400 swallow cages across Java, Lampung, Banten, Middle Kalimantan, and South Kalimantan so this virus indirectly impacts our farmers and breeders,” Bambang told Salaam Gateway.
He said there is still demand from China but Indonesian companies can’t deliver due to the cancelled flights.
“Prices have dropped from 13 million rupiah per kilogram to 10 million rupiah per kilogram. Farmers and breeders are hurt the most,” said Bambang.
Ricky Ludian Kho, a shrimp farmer in North Sumatra told Salaam Gateway the virus outbreak has pushed down commodity prices even more after the U.S. dollar strengthened against the rupiah.
The rupiah dropped to 13,700 against the US dollar from 14,300, causing the price of 63-centimetre shrimps to drop from 73,000 rupiah per kilogram to 70,000 rupiah and then to 63,000 rupiah due to the virus outbreak.
“China is our second [biggest] market for export after U.S. We export around 2,000 tons each month and 95% are delivered to U.S., and the rest to China but since the outbreak of the virus, exporters, including from Indonesia, India, and Ecuador, cannot deliver commodities to China,” said Ricky.
“All exporters are currently crowding the U.S. market and making competition tighter. The same conditions (lower prices) are also happening for crabs and lobsters,” he said.
Ricky is optimistic that his, and other businesses, can weather the challenging economic situation posed by the virus outbreak. He hopes in the next four or five months when they harvest shrimp that the outbreak will be under control and commodity prices will return to normal.
(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])
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