11/07/2011 (Jakarta Post) - Indonesia will continue to rely on major commodities such as palm oil, rubber as well textile and electronics products as the main drivers of the country’s future non-oil and gas exports, a senior Industry Ministry official says.

The ministry’s director general for international industry cooperation, Agus Tjahajana, said Friday that the trade in these commodities and textile products, now major Indonesian exports, still had plenty of room to grow because their presence in main markets such as China, Japan, Singapore, the US and the EU, was still relatively low.

 “Most of our export commodities still have low market penetration despite their high export value. Pushing up the market share is our challenge,” Agus said.

He cited a survey conducted by the ministry from 2007 to 2011, which measured, among other metrics, the penetration rate of industrial products in export destinations, technological content of export products and imports of industrial products.

The survey indicated that the value of palm oil products shipped to six key markets — China, the EU, Malaysia, India, Vietnam and Singapore — totaled US$12.87 billion, or 75 percent of the total palm oil exports of $17.25 billion in 2010. But, they only accounted for between 0.2 to 4.7 percent of the total palm oil market in those countries.

Exports of textile products to five main markets — the US, South Korea, the EU, Vietnam and Japan — reached $8.28 billion, or 74 percent of Indonesia’s total textile exports of $11.21 billion last year. However, they had a market share of only between 0.58 percent and 7.5 percent in these countries.

A similar trend was also present with exports of rubber products in six major markets — China, Japan, the US, India, the EU and South Korea — which last year was valued at $7.51 billion, or 79 percent of total rubber product exports of $9.5 billion, but only made up 1.18 percent to 13.3 percent of the market shares in the countries.

Agus said the ministry would identify the barriers hampering exports to the main buyer countries to address the issue, including discussing free trade negotiations with trade partners. Currently, Indonesia is preparing trade agreements with several partners, including the EU, India, Australia and South Korea.

Agus added that there were concerns around the low technological quality of industrial products.

“Most of our exported industrial products are of medium-to- low-level technology. We need to upgrade to medium-to-high-level technology,” he said.