Wood exports predicted to rise by 12%

Wood exports predicted to rise by 12%

JAKARTA (JP): The Indonesian Forestry Society expects exports
of wood products to grow by 12.3 percent this year to a value of
US$7.19 billion.

The society's chairman, Mohamad Hasan, told a hearing with the
House of Representatives' Commission on Forestry, Agriculture and
Transmigration yesterday that the this year would be better than
last year because a number of major importing countries were
recovering from economic recessions.

Hasan said a number of major importing countries, including
China, Japan, South Korea and Hong Kong, are expected to import
more plywood this year.

"China is planning to build 15 million houses within the next
five years and Japan will spend a lot of money to rebuild the
earthquake-hit town of Kobe.... all indicating that demand for
plywood and other wood products will increase," Hasan said.

He said that exports of wood products were expected increase
significantly over the next three years. Exported wood products
are predicted to earn $8.09 billion next year, $9.42 billion in
1997 and $11.72 billion in 1998.

Exports of wood products, mostly plywood, currently account
for 14 percent of Indonesia's overall annual export earnings.

Last year, revenues from plywood exports dropped by eight
percent to $4.07 billion, down from $4.59 billion in 1993.

A number of critics have blamed Hasan's rigid leadership of
the Association of Indonesian Wood Panel Producers (Apkindo) for
last year's drop in plywood exports. The association is
authorized to control plywood exports.

Hasan has contended that last year's drop was mainly caused by
economic recessions in the United States, Europe and Japan.

He argued that Indonesia was not the only country which had
suffered declines in plywood exports, saying that Malaysia had
encountered a similar drop last year.

Indonesia, which exports almost 10 million cubic meters of
plywood annually, is the largest plywood exporter in the world.
Other plywood-exporting countries are Malaysia, Brazil and a
number of African countries.

Price drop

Commenting on last year's drop in plywood prices to $457 per
cubic meter, from an average of $474 in 1993, Hasan said that the
1993 prices were abnormally high and therefore did not provide a
valid reference.

Hasan said that importers had been responsible for the sharp
increases in plywood prices in 1993, which rose by $110 over the
previous year. "They were afraid of not getting enough supply,"
he said.

He said he favored a slight but steady increase in plywood
prices to a large, sudden increase like the one seen in 1993.

As the volume of plywood exports is projected to remain at an
average of 10 million cubic meters for the next three years, the
increase in revenues from plywood exports is expected to come
from a steady rise of plywood prices.

Hasan defended Apkindo's plywood export monopoly, which has
been subjected to strong criticism from many quarters, saying it
aimed to ensure high plywood prices.

Hasan said that current plywood prices were very much higher
than those paid in 1983, of below $200 per cubic meter, when
Apkindo was assigned to coordinate plywood exports. (rid)