Plywood exports tumble due to declining prices<\/p>\n
JAKARTA (JP): Despite a slight increase in volume, Indonesia's
\nplywood exports fell by 5 percent to US$1.97 billion during the
\nfirst six months of this year due to declining prices on the
\ninternational market, a forestry executive says.<\/p>\n
A. Tjipto Wigjoprajitno, the executive chairman of the
\nAssociation of Indonesian Wood Panel Producers (Apkindo), said
\nyesterday that the volume of Indonesia's plywood exports
\nincreased by 1 percent to 4.49 million cubic meters in the
\nJanuary to June period of this year.<\/p>\n
The plywood exports in the first six months of 1994 reached
\n4.44 million cubic meters and were worth $2.07 billion.<\/p>\n
However, he was optimistic that prices would get better,
\nsaying that Indonesian plywood is known to be better quality than
\nsimilar wood products from other countries.<\/p>\n
\"Research conducted by the University of Tokyo gives evidence
\nthat Indonesian plywood is stronger and stiffer and has a less
\ntendency to swell than similar goods from other countries,\" he
\nsaid.<\/p>\n
Disregarding comments from Minister of Forestry Djamaludin
\nSuryohadikusumo, who said last month that Indonesia would rely
\nmore on medium-density fiberboard rather than plywood for its
\nexports in the future, Tjipto said plywood, although having a
\nnumber of overlapping features with other wood products, \"cannot
\nbe entirely substituted\".<\/p>\n
Indonesia, the world's largest plywood supplier, produces
\nabout 10 million cubic meters of plywood annually.<\/p>\n
Major importers of Indonesian plywood include the far eastern
\ncountries, which spent up to $1.3 billion for 3.1 million cubic
\nmeters of plywood over the January to June period, while the
\nUnited States and Canada ranked second with $216 million for
\n449,050 cubic meters of plywood.<\/p>\n
Mexico<\/p>\n
Tjipto said that Mexico, a minor importer of Indonesian
\nplywood, announced through its official gazette early last month
\nthat it has lifted allegations of dumping practices by Indonesian
\nplywood exporters.<\/p>\n
According to a copy of the gazette, which was made available
\nto The Jakarta Post yesterday, the Mexican government had
\nformerly accused Indonesian plywood exporters of gaining unfair
\nprofits through subsidies.<\/p>\n
The allegations, according to Tjipto, were launched in 1993
\nand since then Indonesia's plywood exports to that country have
\ncontinued to fall.<\/p>\n
Ever since investigations were conducted to prove the
\nallegations, he said, importers of Indonesian plywood have had to
\npay fees of up to 50 percent of the price of wood.<\/p>\n
Thus, plywood exports to Mexico were almost zero in 1994 and
\n1995, as compared to 88,533 cubic meters worth $43.9 million in
\n1993.<\/p>\n
Tjipto said that Apkindo spent \"a large amount of money\" to
\ncooperate with the Mexicans, including local lawyers, to clear
\nthe accusations.<\/p>\n
The government revealed last January that export revenue from
\nplywood, a major foreign currency earner among Indonesia's non-
\noil products, fell by 9 percent in the January to September
\nperiod of last year to US$2.8 billion from the corresponding
\nperiod in 1993.<\/p>\n
Although Apkindo executives said the drop in exports were
\ncaused by lower demand from the recession-stricken Japan and
\nincreased supply from Malaysia, analysts have blamed Apkindo's
\npolicies, which allow only selected distributors to market their
\nproducts, as the cause of the fall.<\/p>\n
Indonesian regulations stipulate that Indonesian plywood
\nproducers cannot export their goods, or even process letters of
\ncredit, without the approval of Apkindo.<\/p>\n
Tjipto said last month that the association was prepared to
\naccept the change in the plywood marketing system as long as a
\nthe new mechanism benefits its members.<\/p>\n
\"(Our) members are not strong enough to face tough competition
\nif Apkindo doesn't regulate exports. But by the time trade
\nbarriers are released five years from now, we will be strong
\nenough,\" he said.<\/p>\n
Plywood prices on the international market drop steeply in May
\nand June each year because Japan, which is a major importer,
\nimposes preference measures to importers during that period to
\nconduct major construction projects, he said.<\/p>\n
\"That is when every producer makes their exports. Without our
\ncontrol, prices will plunge,\" he said. (pwn)<\/p>",
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