Plywood income likely to fall by 16 percent
Plywood income likely to fall by 16 percent
JAKARTA (JP): Indonesia's foreign exchange earnings from
plywood exports is expected to fall 16 percent this year to US$3
billion from $3.58 billion last year, the Association of
Indonesian Wood Panel Producers (Apkindo) estimates.
Apkindo executive director A. Tjipto Wignjorajitno said
yesterday the lower estimate was partly due to the fall in prices
and export volume.
"If the market is still unfavorable through this year, plywood
exports are expected to stand below $3 billion, a record low
since 1992," Tjipto said.
He said current low prices were the result of a smaller demand
from Indonesia's two main buyers, Japan and South Korea, which
are experiencing economic downturns.
He added that the government's reduction of the plywood export
quota imposed on Indonesian plywood producers to 6.9 million
cubic meters from 8 million cubic meters last year was also a
main cause of the lower estimate.
The government limits plywood exports to ensure that forests
are managed in a sustainable manner.
Indonesia is currently the biggest plywood producer in the
world, turning out 10 million cubic meters of plywood annually.
Plywood, a wood panel product, is Indonesia's second largest
non-oil and non-gas foreign exchange earner after textiles and
textile-products.
Last year, the country exported 7.58 million cubic meters of
plywood worth $3.58 billion.
Tjipto said the government cut of the export tax on logs to 30
percent from 200 percent would not pose another blow to
Indonesian plywood industries.
He said timber companies preferred selling processed wood
products such as sawn timber because it was more profitable than
exporting logs.
"Indonesian timber companies mostly supply logs to their own
processing industries because it's more profitable for them to
process the wood and then export it rather than exporting logs,"
he said.
He said the export tax reduction would stimulate timber
companies to export sawn timber and processed wood besides
plywood, due to a growing demand from European countries, Hong
Kong and Taiwan. (gis)