Playwood exports expected to decline 25% in 1998

Playwood exports expected to decline 25% in 1998

JAKARTA (JP): Indonesia's foreign exchange earnings from
plywood exports is expected to fall by 25 percent this year to
about US$2.6 billion from $3.58 billion last year, the
Association of Indonesian Wood Panel Producers (Apkindo) said
Saturday.

Apkindo chairman Abbas Adhar said yesterday the lower estimate
was partly due to a 20 percent fall in export volume, caused by
sluggish demand and a reduction in production.

"If the market remains unfavorable throughout the year,
plywood exports are expected to stand at about $2 billion, a
record low since 1990," Abbas said.

Last year, Indonesia exported 7.58 million cubic meters of
plywood worth $3.58 billion.

He said the 25 percent fall was based on an assumption that
plywood prices in the world market would increase to $300 per
cubic meter in the third quarter of this year.

He added that international prices of Indonesian plywood had
slightly increased last month to $270 per cubic meter from $260
per cubic meter in March.

Many Indonesian plywood producers cut their production this
year following sluggish demand and an increase in production
costs. But Abbas said Apkindo would not revise its target to
export eight million cubic meters this year.

Indonesia is the world's biggest plywood producer, turning out
10 million cubic meters of plywood annually.

He said some plywood importing countries had started buying
Malaysian plywood due to the declining volume of Indonesian
plywood in the past few months.

But Abbas is optimistic that Malaysia, the world's second
biggest plywood producer, will not replace Indonesia's position
due to its higher prices.

"Malaysian plywood is more expensive because the price of
their logs are higher than our logs," Abbas said, adding that
Malaysian logs sold at $90 per cubic meter while Indonesian logs
sold at Rp 300,000 ($30) per cubic meter. (gis)