RI faces hurdle in log export target<\/p>\n
JAKARTA (JP): Indonesia is facing difficulties in meeting its
\nlog export quota because of a domestic shortage of timber, a
\nsenior official at the Ministry of Forestry and Plantations said.<\/p>\n
Director of Supervision and Distribution of Forest Products
\nWalter Nadapdap said Indonesian timber companies were given a
\nquota to export 862,000 cubic meters of logs in the 1998\/1999
\nfiscal year, which ends next month.<\/p>\n
He said the log export realization in the first 10 months of
\nthe fiscal year was only 13.26 percent of the total export quota,
\ngenerating US$13.22 million in foreign revenue.<\/p>\n
Nadapdap said 11 timber companies had exported their logs,
\nincluding the country's second-largest timber company, the
\nDjajanti Group, and state forestry firm PT Inhutani III.<\/p>\n
Djajanti and its sister company Budhi Nusa Group exported
\n39,218 cubic meters of logs to China, India and Thailand, while
\nInhutani II exported 21,917 cubic meters of logs to Japan, China,
\nIndia and Singapore.<\/p>\n
Nadapdap said the low export realization was due to the sharp
\ndrop in domestic timber supplies, primarily caused by the heavy
\nrains which have disrupted logging activities and the
\ntransportation of timber to mills.<\/p>\n
He also said that most companies were still reluctant to
\nexport their timber because local sales were now more profitable
\nbecause of the scarcity of domestic timber.<\/p>\n
Nadapdap also believed the low export realization was due to
\nlow overseas demand. Many importers still doubt the continuity of
\nsupply from the country.<\/p>\n
He said exporting logs would only be used as a short-term
\nemergency measure to offset the low demand at home during the
\neconomic crisis.<\/p>\n
However, Nadapdap also said that the domestic log supply was
\nmuch lower than expected, causing a scarcity at home.<\/p>\n
\"Annual local demand is estimated to reach 57.18 million cubic
\nmeters, while supply is projected at only 4.8 million cubic
\nmeters,\" he added<\/p>\n
Nadapdap said that to operate optimally, the country's 1,701
\nsawmills needed 26.57 million cubic meters of logs annually. He
\nalso said the country's 105 plywood companies and six pulp and
\npaper firms needed 16.3 million cubic meters and 14.31 million
\ncubic meters of logs respectively.<\/p>\n
The country's log supply only reached 45.8 million cubic
\nmeters last year, 28.9 million cubic meters of which came from
\nnatural forests, 9.9 million cubic meters came from wood use
\npermits and seven million cubic meters came from timber estates.<\/p>\n
Minister of Forestry and Plantations Muslimin Nasution said
\nearlier this month that he asked the International Monetary
\nFund's approval to postpone the plan to reduce the export tax on
\ntimber in order to prevent the domestic log supply from growing
\neven scarcer.<\/p>\n
According to the economic reform program agreed to by the
\ngovernment and the IMF, in exchange for the agency-brokered
\nmultibillion bailout fund, Indonesia's export taxes would be
\ngradually reduced.<\/p>\n
In June, as part of its agreement with the IMF, the government
\nreplaced the technical ban on log exports with a 30 percent
\nexport tax, with a staggered reduction system to 20 percent by
\nthe end of 1998, and 15 percent by the end of 1999.<\/p>\n
To address the domestic shortage of logs, Muslimin said the
\ngovernment would lower the log export quota in the next fiscal
\nyear. (gis)<\/p>",
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