Food and beverage exports may break $2 billion mark in 2006

The Jakarta Post, Jakarta

Exports of food and beverages will grow by between 10 and 15 percent this year from the US$2 billion in earnings estimated for 2006, the Indonesian Food and Beverage Producers Associations (GAPMI) says.

"It is only an interim estimation as we haven't completed all the calculations for last year. However, the first six months of produced more than $2 billion," association chairman Thomas Dharmawan told The Jakarta Post on Tuesday.

"Export growth in the food and beverages sector is roughly the same every year," he said, adding that the products most frequently exported from Indonesia were processed foods, such as rice flour, wheat flour, canned beef and canned fish.

While demand would likely stay steady, the increasing prices of these commodities on the global market were the main reason behind the forecast increase in export value.

In 2005, the value of food and beverage exports was recorded at $1.8 billion, a rise of 16 percent from the $1.5 billion recorded the previous year.

The U.S., Europe and Japan are three of the country's main food and beverage export markets, according to Thomas. A smaller portion of exports are also sent to a number of African countries.

However, Indonesian food and beverage products face difficulties in taking larger shares of their main markets in the U.S. and European Union due to the high standards they set for products, Thomas added.

Meanwhile, to help boost exports, he said, the government needed to send more trade missions abroad to introduce and promote Indonesian products.

"Exhibitions are no longer effective in promoting products since there have been too many of them held abroad," he said, adding that Indonesia's main competitors in the industry were Thailand, Malaysia and Vietnam.

He suggested that the government establish stores which specialize in selling Indonesian products.

Trade Minister Mari Elka Pangestu has acknowledged the suggestion, saying recently that she would try to work together with global chain retailers, such as Carrefour and Giant, to promote Indonesian food and beverages in the European Union market by using the in-store promotion concept.

"There would be a kind of Indonesian week in these stores as a way of promoting exports from this sector," she said as quoted by the Bisnis Indonesia daily. (05)
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