Indonesian President Prabowo Subianto welcomes Peruvian President Dina Ercilia Boluarte Zegarra during a face-to-face meeting at the Merdeka Palace, Jakarta, Monday (11/8/2025). This meeting opens up great opportunities for Indonesia to penetrate the Latin American market through superior commodities, such as automotive products, crude palm oil (CPO), and textiles.
"I really welcome how we can improve the Indonesia-Peru comprehensive economic partnership agreement. We also hope that Peru will support our efforts to accession to the OECD," President Prabowo was quoted as saying in an official statement by the State Secretariat (11/8/2025).
President Dina Boluarte also revealed a number of concrete steps to strengthen trade relations, including the signing of the Indonesia-Peru CEPA which allows Peruvian blueberry products to enter the Indonesian market, as well as the process of opening market access for pomegranates.
"Thank you, Mr President, for your commitment, because this has shortened processes and procedures, and now we can say that this has been realized in Peru," said President Dina Boluarte.
This bilateral meeting is a strategic momentum to discuss concrete steps to expand cooperation in various fields. Both countries affirmed their commitment to continue to maintain close relations as fellow countries in the developing Pacific region.
Industry players consider commodities such as automotive components, CPO, and textile products to have great potential to penetrate the Latin American market.
Chairman of the Indonesian Export Companies Association (GPEI) Benny Soetrisno said that automotive components are a mainstay commodity that has been exported to Peru and has the potential to be increased. In addition, crude palm oil (CPO) is also considered potential because it is vegetable oil with the most competitive price. Benny added that electronic products, both in the form of finished goods and components, also have opportunities.
"Export products that have been exported and have the potential to increase exports to Peru are automotive components, such as tires. Besides that, there is CPO of course, because CPO is the cheapest vegetable oil product compared to other vegetable oils. The third is probably electronic products," he told SUAR (11/8/2025).
The same thing was also stated by Chairman of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI) Redma Gita Wirawasta. He said, textile products, especially filament yarn and spun yarn have market potential in Peru.
According to him, although yarn exports to Peru are currently not very large, only around 2%-3%, Peru can be an entry point to the wider Latin American market.
"Peru has the potential to enter the Latin American market, because it is close to there," he told SUAR (11/8/2025).
He mentioned that countries such as Brazil and Mexico have large garment industries, so Indonesia can supply yarn there to be processed into fabrics and garments.
Redma added that Indonesia has an advantage in polyester and rayon fibers, which are the raw materials for spun yarn. He emphasized that exports of textile products to Peru can be very profitable as there is no direct competition with similar industries in Peru.
"By calculation, we trade with Peru, for textiles it must be profitable. Because we are not head-to-head, yes," he explained.
Export challenges and trade routes
Both Benny and Redma agreed that logistics and competition are the main challenges. Benny Soetrisno highlighted the long distance across the Pacific Ocean as a logistical challenge. Meanwhile, Redma Wirawasta mentioned that the biggest competition comes from China and Turkey. Turkey, according to him, has geographical proximity which is an advantage.
Benny Soetrisno also sees Chile and Peru as important entry points to penetrate the markets of Mercosur member countries (Brazil, Argentina, Paraguay and Uruguay). He mentioned that although trade cooperation with Chile has been established, Indonesia does not yet have an agreement with Mercosur.
Redma Wirawasta welcomed the trade facility between Indonesia and Peru. He believes that the convenience and tariff cuts obtained from the cooperation can be utilized by the textile industry to increase exports. "When there are trade facilities, of course there will be facilities, there will be tariff cuts, so that can be maximized by the textile industry," he concluded.
Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, further explained that the IP-CEPA is more than just a goods trade agreement. Its scope extends to the services sector, investment, and non-tariff measure discussions. Therefore, Faisal emphasized the need for an in-depth evaluation of the various aspects of this agreement.
On the other hand, Indonesia imports a lot of cocoa beans from Peru. Faisal believes that these imports can be utilized to meet the increasing needs of the domestic cocoa processing industry.
"Our industry's need for cocoa beans is getting higher year on year, and imports from Peru can be a solution to meet this shortage of raw materials," Faisal explained.
However, Faisal also cautioned that this import cooperation should not reduce government and private efforts to increase cocoa production in the country. He stressed the importance of downstreaming, in line with the President's vision, which also extends to the plantation sector.
"We have many downstream cocoa industries, but they often lack raw materials. Therefore, we need to boost the productivity of cocoa plantations in Indonesia, one of which is by utilizing unproductive lands," Faisal said.
Thus, importing cocoa beans from Peru can be a short-term solution, while developing domestic plantations is a long-term strategy to reduce import dependence and realize the resilience of the national cocoa processing industry.
