Malaysia, Indonesia agree on plywood price

Malaysia, Indonesia agree on plywood price

KUALA LUMPUR (Reuter): Malaysia and Indonesia have for the
first time reached a mutual understanding on the export volume
and price of plywood, the national Bernama news agency said
yesterday.

The pact between the Malaysian Panel-Products Manufacturers'
Association (MPMA) and APKINDO, the Indonesian association of
plywood manufacturers, aims to maintain and stabilize the plywood
industry of both countries.

MPMA chairman Stephen Lau said under the agreement reached in
Singapore on Dec. 2, a minimum price of US$440 per cubic metre
would be imposed on 3.0 mm thick plywood exported to China in the
first quarter of 1996.

During the same period, 2.7 mm thick plywood shipped to South
Korea would cost $475 per cubic metre.

The two producers also agreed to control export volumes for
the two markets for the whole of 1996.

Indonesia would sell 640,000 cubic metres of plywood to China
and 800,000 cubic metres to South Korea.

Malaysia would export 720,000 cubic metres to China and
320,000 cubic metres to South Korea.

Lau said from January to September this year, Malaysia and
Indonesia exported 2.4 million cubic metres and 6.5 cubic metres
respectively.

Total export from the two countries was projected to reach 12
million cubic metres by end of 1995, he added.

China and South Korea were expected to import 1.6 million and
1.3 million cubic metres respectively until the end of this year.

Japan was likely to remain the biggest market with a combined
import of 3.9 million cubic metres from Malaysia and Indonesia.

Lau said although supplies from Malaysia and Indonesia were
not expected to rise next year due to environment-friendly forest
policies, demand from Japan could still increase.

Chinese demand was also expected to be bullish with
improvements in its economy. The South Korean market, in
contrast, is expected to be stable.

Lau said the two producers would continue to meet regularly to
review market demand and supply.