Export Target of Indonesia's Fishery Sector Revised on Weak Demand
The Indonesian government has revised its export target for fishery products in 2014 to USD $5.1 billion from USD $5.65 billion. This downward revision has been decided because several export markets, including the United States and Europe, still experience difficulties on their path towards economic recovery, thereby reducing demand for Indonesian fishery products. Although revised, the new target is still much higher than export realization in 2013 when USD $4.2 billion worth of fishery products were exported from Indonesia.
The government estimates that national fishery production in 2014 will reach 20.95 million tons, consisting of 6.08 million captured fish and 13.97 million fish from the aquaculture sector. The fishery GDP growth rate in 2014 is set at 7.25 percent, while domestic consumption of fish is estimated at 38 kilogram per person per year in 2014.
Indonesian fishery product exports are still dominated by shrimp. As the global shrimp production is expected to decline this year, the Indonesian government hopes that Indonesia's domestic shrimp production can be enhanced to supply global demand. Another important asset in Indonesia's fishery exports is crab (portunus pelagicus). Last year, the value of crab exports stood at USD $190 million, followed by tuna with USD $115 million worth of exports in 2013.
Although Indonesia is the world's second-largest fishery producing country, its exports are less impressive as 75 percent of nationwide production is consumed by the domestic market. Through promotional campaigns, the government intends to enhance export figures by fueling overseas demand. From previous exhibitions it is known that the international market is most interested in Indonesia's tuna, red snapper and crab.
Ahead of implementation of the ASEAN Economic Community (AEC) in 2015 (which facilitates the free flow of goods, services and capital), two important matters need to be dealt with in order to make Indonesia more competitive. Firstly, Indonesia's notorious high logistics costs (brought about due to weak infrastructure) need to be reduced. Currently, Indonesia's logistics costs account for about 25 percent of GDP, much higher than its regional peers. Secondly, Indonesia's small and mid-sized fish producers need to enhance production to be able to compete with the influx of foreign players. The government hopes that these smaller seafood producers will continue to focus on supplying the domestic market.