Plywood market looking up, says Apkindo chief

Plywood market looking up, says Apkindo chief

JAKARTA (JP): Plywood prices in international markets have
gradually started to recover after a sharp decline since early
this year, according to the Association of Indonesian Wood Panel
Producers (Apkindo).

Apkindo executive director A. Tjipto Wignjoprajitno said
Saturday the price in Asian markets reached US$260 per cubic
meter late last month over $230 in June.

He said the demand for Indonesian plywood had also showed
signs of increasing in the last two months, especially after
Malaysian plywood producers cut their exports.

Demand from other Asian countries, especially from China, has
increased significantly, he added. China signed a contract last
month to buy about 100,000 cubic meters of Indonesian plywood.

He said the price of Indonesian plywood in China was
encouraging because high quality plywood could fetch prices of
between $250 and $260 per cubic meter.

The price is still lower than last year's average of $400 per
cubic meter, Tjipto said.

He said the increase in overseas demand for the Indonesian
plywood was partly due to a decline in Malaysian plywood exports,
Indonesia's main competitor in the market.

The decline was due to the country's deficiency in the supply
of logs, he said.

Indonesia is currently the world's biggest plywood producer
with an annual output of 10 million cubic meters, of which 80
percent is exported.

Plywood, a wood panel product, is Indonesia's second largest
non-oil and non-gas foreign exchange earner after textiles and
textile products.

Apkindo estimates that Indonesia's foreign exchange earnings
from plywood exports is expected to fall by 16 percent this year
to US$3 billion from $3.58 billion last year, due to the drop in
prices and export volume.

Tjipto said Indonesia's log production could slow down in the
coming months as bad weather and heavy rainfall might hamper
logging and log transportation activities.

He noted that the recent devastating flood in Samarinda, East
Kalimantan -- the country's main producer of logs -- had
significantly affected logging activities in the province.

"I've heard that several wood processing factories have been
studying the possibility of importing logs to sustain their
industry during the rainy season," Tjipto said. (gis)