Forest export earnings to exceed $8b in 2000

JAKARTA (JP): The Indonesian Forestry Society (MPI) forecasts the country's foreign exchange earnings from exports of wood and other forest-related products this year to reach more than US$8 billion.

MPI executive director Kristiyono Fajari said on Sunday the export target was comparatively the same as last year's target.

Kristiyono was optimistic that the 1999 export target could be obtained despite the sluggish market between January and August helped by higher international prices of pulp and paper products.

He was quoted by Antara as saying that prices of wood and wood-related products had stabilized in November and started to pick up in December.

Forest products, particularly plywood, have been one of Indonesia's major non-oil and gas foreign exchange earners.

But plywood prices started to plunge in 1998 as the regional economic crisis hit Japan and South Korea, the two main markets for Indonesian plywood.

The average price of Indonesian plywood products in 1999 was $310 per m3 compared to $470 per m3 in 1997.

Kristiyono said Indonesia's plywood export earnings from January until August 1999 were $1.6 billion compared to the full year target of $2.5 billion.

Kristiyono urged the government to delay the planned increase in the so-called reforestation fee, reasoning that the increase would have a serious impact on the domestic plywood industry.

He said that the country's plywood industry was still in a difficult situation as the current market price of $310 per m3 for plywood was lower than the total production cost, including the reforestation fee, of $314 per m3.

Reforestation fees and forest loyalties are mandatory fees imposed by the government on forest concessionaires for every log cut in their concession areas to ensure sustainable forest management.

The size of the fee depends on the volume and type of timber felled.

Several senior government officials have proposed an increased in the reforestation fee. (rei)