RI plywood exports fall 35% due to tardy market
RI plywood exports fall 35% due to tardy market
JAKARTA (JP): Indonesia's plywood and other wood panel exports
fell by 35 percent in 1998 to US$2.5 billion due to a sluggish
overseas market, the Association of Indonesian Wood Panel
Producers (Apkindo) said on Tuesday.
The executive director of Apkindo, Tjipto Wignjoprajitno, said
in terms of volume, plywood exports dropped by only 3.6 percent
to 8 million cubic meters from 8.3 million cubic meters in 1997.
"The lower export value was due to weak demand and depressed
prices rising from economic crises affecting several main
importing countries, particularly Japan and South Korea," he
said.
The association initially projected $3 billion in earnings
from exports in 1998. Plywood exports were valued at $3.9 billion
in 1997.
Tjipto estimated that the world's depressed plywood market
would recover in the second quarter of this year and Indonesia's
exports would also pick up during this period.
"I am confident that we can export over 8 million cubic meters
of plywood this year," he said. However, he said he could not
predict Indonesia's foreign exchange earnings from the exports
because prices would remain uncertain,
Tjipto said the demand for Indonesian plywood had risen in the
last two months, especially after Malaysian plywood producers cut
their exports due to the scarcity of logs.
The higher orders mostly came from Japan, he said.
He said that the Japanese government had raised its proposed
budget by 1.7 percent for the 1999/2000 fiscal year, which begins
in April, adding that a large part of the budget would be
allocated for the crisis-hit property and construction sector.
He said that plywood prices in Japan currently ranged between
$380 and $540 per cubic meter.
Demand for plywood from other Asian countries, particularly
China, is also expected to increase significantly in April. China
imports birch wood from Europe to support the country's fancy
plywood industry.
"China will also need Indonesian base panel to make the fancy
plywood," Tjipto said, adding that the price of Indonesian
plywood in China was encouraging.
Meanwhile, he said, demand from South Korea was sluggish
because the country was still facing economic turmoil. The
country currently is able to import low quality plywood only,
which is usually sold on the domestic market.
Tjipto said demand from the Middle East was currently low
because business activities in the region had halted for the Haj
pilgrimage.
Demand and prices in European countries and the United States
are stable, while Mexico plans to directly import Indonesian
plywood, he said.
"Mexico want us to sell directly to the country. At present,
we export our plywood to the Unites States which then sells the
plywood to Mexico," he added.
Log exports
Tjipto also questioned the policies enacted by the
International Monetary Fund (IMF) to help the forestry sectors of
crisis-hit countries.
He quoted the Japan Lumber Report, which stated that the
Cameroon government banned log exports in accordance with its
agreement with the IMF to receive financial aid from the fund.
"Indonesia is obliged to ease export restrictions by reducing
export taxes from 200 percent to 30 percent. From my point of
view, the IMF sets different standards to help crisis-hit
countries. If the IMF was consistent, Cameroon would also be
required to open its log exports," he said.
According to the economic reform program agreed to by the
government and the IMF, in exchange for the agency-brokered
multibillion bailout fund, Indonesia has to gradually reduce its
export taxes.
In June, as part of its agreement with the IMF, the government
replaced the technical ban on log exports with a 30 percent
export tax, with a staggered reduction system which will lower
the export tax to 20 percent by the end of 1998 and 15 percent by
the end of 1999.
However, the government has asked the IMF to postpone the
reduction because many local wood-processing companies have
complained about the scarcity of logs on the domestic market.
(gis)