Plywood prices may recover

JAKARTA (JP): Export prices of plywood are showing signs of recovery, thanks to a sharp rise in the demand for products made of waste wood, a forestry executive says.

The executive chairman of the Association of Indonesian Wood Panel Producers, A. Tjipto Wigjoprajitno, said yesterday that plywood prices were now nearing US$500 per cubic meter.

"During the first four months of this year, the prices of Indonesian plywood averaged $496 a cubic meter, higher than the $426 in the same period of last year," he said.

The improved prices were recorded in almost all of Indonesia's 13 major plywood markets, which include the United States, Canada, Europe, China, Hong Kong, Taiwan, Southeast Asia, Japan, South Korea and the Middle East, he said.

Prices in Singapore, which showed a record increment of almost 99 percent, shot up to $684 per cubic meter in April from an average of $344 in the corresponding period of last year.

Meanwhile, in the United States and Canada, prices escalated by 31 percent from $492 to $648 per cubic meter. In South Korea, prices went up by 23 percent from $352 to $443 and in China by 18.4 percent from $467 to $553.

Tjipto said, however, prices dropped in Southeast Asia -- except Singapore -- and in the Middle East, from an average of $560 and $449 per cubic meter to $485 and $376, respectively.

During the January to April period, Indonesia reaped some $280 million in revenues from plywood exports.

Tjipto said he was optimistic that plywood could become a major foreign exchange earner this year, particularly with the development of the secondary panel-wood industry which processes waste wood and timber in small diameters.

He was confident that secondary panel-wood products, such as particle boards and fiberboards, would gain a larger share of the export market in the future.

Currently, secondary panel-wood products make up 15 percent of the country's plywood exports.

"In the next five years, this share is likely to reach 30 percent to 35 percent," Tjipto said.

Demand

Higher demands for secondary panel-wood products, particularly in Japan, South Korea and Taiwan, would arise as a result of high labor costs in those countries, he said.

He was optimistic that secondary panel-wood products such as medium density fiberboard, oriented strand board and laminated veneer lumber which are all value-added products made of small- diameter timber, would bring in large revenues in the future.

Total exports of forestry products increased from $3.85 billion in 1990 to $4.37 billion in 1991, $5.03 billion in 1992 and $6.56 billion in 1993. They dropped slightly to $6.41 in 1994 before rising to $7.16 billion last year.

According to statistics of the Indonesian Forestry Society, in 1994 the export volume and value of almost all forest products, except plywood, increased from their 1993 levels.

The value of plywood exports in 1994 dropped to $4.05 billion from $4.6 billion in 1993, while the export volume declined to 8.85 million cubic meters from 9.72 million cubic meters.

But in 1995, the forest-based commodities which maintained high growth levels for export value and volume were pulp, paper, furniture and finished wood products.

The value of pulp and paper exports increased to $1.24 billion in 1995 from $529.5 million in 1994, while their volume increased to 1.5 million tons from only one million tons in the previous year.

Exports of furniture and finished wood products in 1995 increased to $458.72 million from $402.43 million in 1994, while their volumes grew to 213.72 million kilograms from 188.64 million kg in the previous year.

Meanwhile, exports of rattan, rattan-based products and processed wood increased in value but decreased in volume. Exports of sawn timber and plywood decreased both in value and volume.

Exports of sawn timber plunged from 7,582 cubic meters in 1994 to 1,243 in 1995 in volume and from $6.54 million to $1.13 million in value.

The volume of plywood exports dropped from 8.85 million cubic meters in 1994 to 8.74 million in 1995 and their volume from $4.05 billion to $3.94 billion. (pwn)