Log supply falls 50% due to reduced logging activities

JAKARTA (JP): Indonesia's log supply has dropped 50 percent to around 11 to 13 million tons this year because of reduced logging activities by timber companies, according to the Indonesian Forestry Society (MPI).

MPI's chairman Sudradjat DP said on Saturday the scarcity of logs would likely continue until the middle of 1999.

"The sharp drop in the log supply has been especially caused by the heavy rainy season, which is expected to run until March," he said during a breaking of the fast meal.

The heavy rainy season, brought on by the La Nia weather pattern, has disrupted logging activities and log transportation from the logging areas to timber mills.

In addition, many timber companies normally reduced logging activities during the Christmas, New Year, Muslim fasting month and Idul Fitri holidays, which will run through late January.

Sudradjat predicted that logging activities would also be affected by political events in the country, especially run-up activities to the planned general election in June.

"Many timber companies will stop their activities during this period," he said.

That would force wood-processing industries to continue working much below capacity.

Wood-processing industries, he said, are currently operating at 30 percent to 40 percent of their total production capacity due to the scarcity of logs.

"Wood-related industries are also rejecting big orders because they are wary of the scarcity of logs," he said.

Local wood-processing businesses would need about 36 million cubic meters of logs a year, while the supply of logs would only reach 22 and 26 million cubic meters. But this year, the supply has dropped much lower.

National demand for logs was initially projected at about 36.2 million cubic meters in the 1998/1999 fiscal year, of which 12.6 million cubic meters would be needed for the sawmill and woodworking industry, 18.5 million cubic meters for the plywood industry and 430,000 cubic meters for the furniture industry and 4.64 million cubic meters for the pulp and paper industry.

Sudradjat said that the government's recent decision to cut the export tax on logs to 30 percent from 200 percent has had no big impact on the supply of logs on the domestic market because many Indonesian timber companies were currently reluctant to export their logs as local sales were now more profitable.

He said the Ministry of Forestry and Plantations had issued log export licenses to 20 out of the 43 companies that had applied. The licenses will allow the companies to export a total of 460,000 cubic meters of logs.

"But so far less than 20,000 cubic meters of logs have been exported. How can we export if there is not enough supply?" he said. (gis)