Indonesian log prices drop to $70 per cubic meter
Indonesian log prices drop to $70 per cubic meter
JAKARTA (JP): The price of Indonesian logs dropped sharply to
about US$70 per cubic meter in the second half of last year due
to sluggish demand in overseas markets, according to the
Association of Indonesian Forest Concessionaires.
The association's executive director, Hendro Prastowo, said
yesterday the drop in demand for logs had forced Indonesian log
producers to cut prices to $70 per cubic meter from the average
price of $92 per cubic meter in the first half.
He said the regional monetary crisis, which also affected
buyers such as Japan and Korea, had resulted in a decline in the
regional property sector.
"The monetary crisis has hit the property sector in Japan,
China and Korea. Since most logs and wood products are used by
the property business, the demand for logs and wood has also been
affected," he said.
He said demand from Japan, the biggest importer of Indonesian
logs and wood, had significantly dropped due to a delay in
property projects in the country.
Other importing countries, like China and Korea, had also cut
their import of Indonesian wood paneling, he said.
He said the falling price of logs in the international market
had resulted in a drop in domestic prices.
He said the monetary crisis had also hit the local property
sector which resulted in declining demand for logs.
"Even the local wood industry can't take on the currency
crisis, even though prices are lower, because demand for wood
products has been sluggish," he said.
Minister of Forestry Djamaludin Suryohadikusumo said last week
the value of wood and wood-related exports in 1997 was likely to
drop by 25 percent to $6.24 million from $8.3 million in 1995 due
to lowered demand.
Timber tycoon Mohammad "Bob" Hasan, who is also chairman of
the Association of Indonesian Wood Panel Producers, urged
Indonesian wood producers to maintain the market despite relaxed
demand and the drop in prices of wood products.
"We have to keep exporting our wood to prevent other countries
from taking away our market share," he said.
Djamaludin said yesterday that his ministry, in cooperation
with the Ministry of Industry and Trade, had set up a
coordinating team for the forest products industry to boost
Indonesian wood exports.
"The team will comprise the Association of Indonesian Wood
Panel Producers, the Association of Indonesian Furniture and
Handicraft Producers and other wood-related associations," he
said.
He said his ministry was trying to boost the export of sawed
timber and furniture, because the industry absorbed a lot of
workers. (gis)