Foreign demand grows for Indonesian plywood

Foreign demand grows for Indonesian plywood

JAKARTA (JP): Overseas demand for Indonesian plywood is
improving due to the recovery of some major Asian buyers and
better prospects in the United States and European countries, the
Association of Indonesian Wood Panel Producers (Apkindo) has
said.

Apkindo executive director A. Tjipto Wignjoprajitno said
yesterday that Indonesian plywood producers would be unable to
take new orders for May because their production orders were
fully booked.

"I have checked with all of Apkindo's member companies. Most
of them have said they have closed their doors to new contracts
until the end of May. But they will receive new orders for June
delivery," he said at the sidelines of the launching of a
biography of former forestry minister Djamaludin Suryohadikusumo.

Tjipto said plywood exports for April and May totaled over
500,000 cubic meters per month.

He said demand for plywood from China had increased rapidly
over the last two months due to Beijing's new policy to reduce
logging 60 percent this year.

Tjipto said the policy had resulted in a scarcity of logs,
forcing many Chinese plywood producers out of business.

"Prices of Chinese plywood are currently very high due to the
scarce supply. It is cheaper for the country's plywood producers
to import Indonesian plywood to sell to its customers," he said.

Indonesian plywood is currently being sold at an average of
US$260 per cubic meter in China, an increase from $220 from the
January to February period. The current price, however, is still
lower than last year's average price of $400 per cubic meter,
Tjipto said.

Indonesian plywood is currently being traded at an average of
$240 per cubic meter on the world market. The price averaged over
$500 during last year's first semester.

The current low prices are a result of a lessened demand from
Indonesia's two main buyers, Japan and South Korea, which are
experiencing economic downturns.

Indonesia is currently the world's biggest plywood producer,
with an annual output of 10 million cubic meters of which 80
percent is exported.

Plywood, a wood panel product, is Indonesia's second largest
non-oil and non-gas foreign exchange earner after textiles and
textile products.

According to Apkindo, Indonesia's 1997 plywood exports totaled
7.85 million cubic meters worth $3.58 billion, down from the
previous year's 8.51 million cubic meters worth $4.01 billion.

Indonesia exported over 3 million cubic meters of its plywood
to Japan in 1996.

Tjipto projected that this year's plywood export volume would
total no less than last year's level.

He declined, however, to set a target for this year's export
value saying that international plywood prices were still low
compared to last year's prices. (gis)