Indonesia's rattan industry, historically a national economic backbone and the source of 80% of the world's rattan, now faces significant challenges. Despite this, the government targets USD 5 billion in furniture and craft exports this year. Global demand for rattan furniture is growing, with an average annual import increase of 4.3%. However, Indonesia’s rattan exports have declined, resulting in a trade deficit. The primary cause is the underperformance of the domestic rattan processing industry, exacerbated by a government ban on raw rattan exports aimed at increasing domestic product value. This ban pressured upstream businesses, leading to a scarcity of quality raw materials. Additionally, cheaper synthetic rattan, primarily used by competitors like China, poses a significant threat. In Cirebon, a major rattan center, Q1 2024 rattan craft exports were USD 13.12 million, including USD 12.2 million in furniture and USD 849,839 in baskets. Despite a decline, rattan remains a key export commodity. Weak product competitiveness, due to factors like difficulties in sourcing quality raw materials, lack of design innovation, high production costs, high-interest rates, and a weak domestic market brand image, is a significant issue.
To address these challenges, close cooperation between the government, relevant institutions, and business actors is crucial. Strategies include enhancing the availability of quality raw materials, establishing design development centers, providing low-interest credit, improving infrastructure, promoting domestic rattan furniture use, and forming an agency to bridge the upstream and downstream sectors. Despite the challenges, statements from Deputy Minister of Trade Jerry Sambuaga highlight the high quality and international demand for Indonesian rattan products. The Ministry of Trade supports high-quality rattan exports to Japan through the Indonesia Trade Promotion Center (ITPC) Osaka, focusing on improving product quality and promotion. With the right strategies and cooperation, Indonesia’s rattan industry can revive and achieve global market success, maximizing its vast potential to overcome challenges and become a leading international product.
