Rattan Industry Players Pressured by Raw Material Smuggling

The atmosphere of the 2023 International Furniture Exhibition (Ifex) which was held at the Jakarta International Expo, Kemayoran, Jakarta, Thursday (9/3/2023).

JAKARTA, KOMPAS — Smuggling of raw rattan creates uncertainty in the supply of raw materials for domestic furniture industry players. As a result, furniture industry players are hesitant to expand the export market amidst declining world market demand.

Chairman of the Presidium of the Indonesian Furniture and Crafts Industry Association (HIMKI) Abdul Sobur said that the supply of raw materials for the furniture and crafts industry made from rattan had decreased by 8-10 percent. "The supply of rattan raw materials is hampered by rampant smuggling," he said when met after the opening of the 3rd HIMKI National Conference (Munas), in Jakarta, Wednesday (30/8/2023).

Previously, Minister of Trade Regulation Number 22 of 2023 concerning Goods Prohibited for Export included rattan in the list of goods prohibited for export. Types of rattan that may not be exported include whole or split core types with HS code 1401.20.10, diameter not exceeding 12 millimeters (HS code 1401.20.21), split shells (HS code 1401.20.30), and others (HS code 1401.20.29 and 1401.20.90).

Sobur said that seven smuggling points were discovered. The seven points are spread across the islands of Sumatra, Kalimantan and Nusa Tenggara. He suspects that the rattan smuggled through Kalimantan moves to Malaysia and then is exported to China. Rattan that is smuggled via Sumatra flows to Singapore and is exported to a number of countries, while that that passes through Nusa Tenggara is sent to Timor Leste. According to him, this smuggling occurs because 80 percent of the world's rattan supply is in Indonesia.

Chairman of the Presidium of the Indonesian Furniture and Crafts Industry Association (HIMKI) Abdul Sobur when met after the opening of the 3rd HIMKI National Conference (Munas), in Jakarta, Wednesday (30/8/2023).

Due to uncertainty in the supply of raw materials, he assessed, rattan-based furniture industry players are hesitant to look for alternative export markets amidst declining world demand, especially from Europe and the United States. As a result, rattan furniture exports contracted by around 22 percent in the last year.

Based on data from the Central Statistics Agency, the export value of the furniture industry during January-July 2023 was 1.23 billion US dollars. This figure fell 29.9 percent compared to the same period the previous year.

As a result of the smuggling of raw materials, Sobur estimates that Indonesia will not be able to enjoy the added value of the rattan-based furniture industry, which amounted to around 400 million US dollars in the last year. This figure is equivalent to the involvement of 70,000 workers.

Apart from smuggling, he also suspects that the decline in the supply of raw materials is caused by the reduction in rattan forest land due to conversion to open pit coal mining and oil palm plantations. This can be seen from the decline in wet rattan which reached more than 20 percent.

Meanwhile, Dede, a member of HIMKI and a rattan industry player from Cirebon, West Java, approached the Minister of Industry Agus Gumiwang Kartasasmita and stated that he needed market guarantees. Because furniture industry players do not dare to order supplies of rattan which is the raw material due to the sluggish market. As a result, there were other parties who smuggled the rattan. If the export market can be boosted, rattan raw materials can also be absorbed by industry players.

Chairman of the HIMKI Board of Trustees, Soenoto, said that the situation in the rattan furniture industry in Cirebon was "silence". Therefore, furniture industry players expect market guarantees, especially exports, and technical guidance. Market guarantees can include access to exhibitions.

Responding to the statement regarding the rattan-based industry, Agus regretted the occurrence of smuggling. "We have closed exports (of rattan) so that industry players can get enough raw materials," he said when met after the opening of the HIMKI National Conference, Wednesday (30/8/2023).

For this reason, Agus hopes that law enforcement officials will pay close attention to the situation in the field because he has received reports of a number of rat trails that cause rattan raw materials to escape so that they cannot be used by domestic industry. Indonesia cannot enjoy the added value of rattan because it is processed abroad.

By: M PASCHALIA JUDITH J

Editor: MUHAMMAD FAJAR MARTA