Log supply expected to drop by 25 percent<\/p>\n
JAKARTA (JP): Indonesia's log supply might decline by as much
\nas 25 percent this year due to a drop in timber companies'
\nlogging activities, according to the Indonesian Forestry Society
\n(MPI).<\/p>\n
MPI's executive director Kristiyono Fajari said on Thursday
\nthat the 25 percent drop in the log supply was also attributed to
\nthe heavy rainy season and the postponement of timber companies'
\nlogging contracts.<\/p>\n
\"Many timber companies have reduced their annual logging plan
\ndue to the decline in demand and low prices of plywood on both
\nlocal and international markets earlier this year,\" he said.<\/p>\n
Kristiyono said the heavy rainy season in the country, caused
\nby the La Nia weather pattern, has disrupted logging activities
\nand log transportation from the logging area to timber mills.<\/p>\n
He added that at least 186 timber companies whose logging
\ncontracts had ended were still awaiting the government's decision
\non whether they would be extended.<\/p>\n
On the other hand, demand for logs is currently very high due
\nto plywood companies' improving production activities in the past
\nthree months.<\/p>\n
\"The world demand for Indonesian plywood is currently high but
\nmost of local plywood producers could not meet new contracts due
\nto the lack of log supply,\" he said.<\/p>\n
MPI's chairman Sudradjat DP said separately on Thursday that
\nthe scarcity of logs would hamper Indonesia's efforts to meet the
\nUS$3 billion in foreign exchange earning target from plywood
\nexports this year.<\/p>\n
He said that the Association of Indonesian Wood Panel
\nProducers (Apkindo) had initially targeted earnings of $3 billion
\nfrom plywood exports this year, but it was likely to reach only
\n$2.5 billion.<\/p>\n
Sudradjat said that Indonesian plywood was currently being
\nsold at between $300 to $320 per cubic meter in China, an
\nincrease from $270 in August. It is currently sold at over $300
\nin Japan from $250 two months ago.<\/p>\n
Plywood, a wood panel product, is Indonesia's second largest
\nnon-oil and non-gas foreign exchange earner after textiles and
\ntextile products.<\/p>\n
Last year, the country's plywood exports totaled 7.85 million
\ncubic meters worth $3.58 billion.<\/p>\n
Kristiyono said that the government's recent decision to cut
\nthe export tax on logs to 30 percent from 200 percent has had no
\nbig impact on the supply of logs on the domestic market because
\nmany Indonesian timber companies were currently reluctant to
\nexport their logs as local sales were now more profitable.<\/p>\n
He said that the ministry of forestry and plantations has
\nissued log export licenses to 20 of the 43 companies that had
\napplied. The licenses will allow the companies to export a total
\nof 460,000 cubic meters of logs.<\/p>\n
\"But so far only less than 20,000 cubic meters of logs have
\nbeen exported,\" he said.<\/p>\n
Kristiyono said logs were currently priced at around $85 per
\ncubic meter in local market, while the price on the international
\nmarket was currently $110 per cubic meter.<\/p>\n
\"To gain profit from exporting logs, timber companies have to
\nsell their logs at over $130 per cubic meter because with the
\ncurrent export tax, timber companies had to pay $45 for every
\ncubic meter of logs they exported,\" he said.<\/p>\n
The Chairman of the Association of Indonesian Forest
\nConcessionaires Adi Warsita Adinegoro said the government should
\nonly allow log exports from areas that have an abundant supply
\nbut lack processing industries, such as Irian Jaya and Maluku.<\/p>\n
The types of logs which it is permissible to export should be
\nlimited to those which are not used by local plywood companies,
\nsuch as Merbau he added.<\/p>\n
He said that logs from areas where wood processing companies
\nare concentrated, such as Central and East Kalimantan, should not
\nbe exported. Most logs from these areas are used to manufacture
\nplywood.<\/p>\n
Previously, the government technically banned log exports
\nthrough the use of a 200 percent export tax. The tax was cut to
\n30 percent in June this year to comply with the program of reform
\nagreed with the IMF. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/log-supply-expected-to-drop-by-25-percent-1447893297",
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