Exports of forest products estimated at $8.25b this year
JAKARTA (JP): The Indonesian Forestry Society (MPI) estimates that foreign exchange earnings from exports of wood and other forest-related products will reach US$8.25 billion this year despite sluggish sales in this year's first quarter.
MPI's chairman Abbas Adhar said yesterday that MPI was optimistic that the export target could be achieved because the overseas demand for Indonesia's forest-related products would likely increase in the second quarter.
"Overseas demand for Indonesian wood and wood-related products has been improving since April, especially for plywood, pulp and final wood products. According to Apkindo, plywood producers will be unable to take new orders because their production output is fully booked," Abbas said after MPI's national meeting yesterday.
Abbas said that overseas demand for Indonesian plywood had picked up again due to the recovery of some major Asian buyers, such as Japan, and better prospects in the United States and European countries.
Abbas said the export value of wood and wood-products (excluding the log exports and flora and fauna exports) is targeted to reach $7.7 billion, up by 4 percent compared to $7.4 billion in 1997.
He said that the amount comprises of pulp and paper exports worth $3 billion, wood panel exports worth $3 billion, furniture and handicraft exports of $500 million, sawn timber exports of $1 million, rattan and rattan product exports worth $200 million, and export of processed wood worth $1 billion.
If exports of logs and flora and fauna are included, the total foreign exchange earnings will reach $8.25 billion this year, he said.
This year, he added, MPI members planned to export 3 million cubic meters of logs worth $300 million and flora and fauna worth $250 million.
Last year, pulp and paper exports stood at $1.93 billion, wood panel exports at $3.89 billion, processed wood exports at $879 million, sawn timber exports at 126 million, furniture and handicraft exports at $527.2 million and rattan and rattan- product exports at $195 million.
Abbas said that the sharp increase in the export value of pulp and paper was due to the 62.5 percent increase in pulp price to the current $650 per ton up from $400 per ton last year.
"The decline in the export value of wood panel products was due to lower plywood prices caused by a lessened demand from Indonesia's two main buyers, Japan and South Korea, which are experiencing economic downturns," he said.
Plywood, a wood panel product, is Indonesia's second largest non-oil and non-gas foreign exchange earner after textiles and textile products.
MPI, the federation of nine forestry-related organizations, was led by timber tycoon Mohammad "Bob" Hasan for 12 years before he resigned in March.
The organization has been widely criticized for their crony- capitalism and rent-seeking practices.
Abbas said that MPI has been implementing its reform program since February by abolishing several levies considered burdensome to forestry companies and gradually revising its statutes and management system.
He said that there would be a major reshuffle in MPI's management which was decided on at the national meeting in order to restore MPI's image, which is still considered to be under Hasan's power.
"Pak Bob has pledged that he will no longer interfere in MPI's business," he said.
Abbas added that MPI would remain in existence despite the establishment of a rival forestry society advocating reforms, called MPI Reformasi in the sector.
"It is a free competition. Businesspeople will look and choose to join the better association and they are free to do it. So, let's see," he said. (gis)