Yen depreciation not yet hurting plywood

Yen depreciation not yet hurting plywood

JAKARTA (JP): Japanese businesses expect to see prices of
Indonesian plywood decline soon as a result of the recent
depreciation of the yen against the U.S. dollar, an executive
said yesterday.

Vice chairman of the Association of Indonesian Wood Panel
Producers (Apkindo) Abbas Adhar said yesterday that, so far, the
depreciation of the yen had not affected the volume of
Indonesia's plywood exports.

"Indonesian plywood producers still want to keep prices as
they are now because they consider the yen has not dropped low
enough," he said.

Japan is one of Indonesia's major export destinations for
plywood. Some 3.5 million of Indonesia's nine million cubic
meters of plywood exports go to Japan each year.

Since exports to Japan are valued in U.S. dollars, any
strengthening of the greenback against the yen would cause
Indonesia's exports to be relatively more expensive.

The current rate is about 122 yen to a dollar.

Abbas said that later this week, Indonesia's plywood trading
arm in Japan, Nippindo, would meet with Apkindo executives to
discuss plywood prices.

Abbas said he was convinced prices would remain as they were
because stocks in Japan were thinning.

He said the decline of the yen to around 124 to a dollar was
not enough to cut prices of Indonesian plywood exports.

"I think that only when the yen falls to about 130 to 140 to a
dollar can we start considering cutting back plywood prices," he
said, as quoted by Antara.

He said although the depreciation of the yen now had no effect
yet on plywood prices, he acknowledged that in the long run it
could reduce the volume of Indonesia's plywood exports to Japan.

If Indonesia reduced its exports, he said, other countries,
such as Malaysia, would quickly fill in the market.

Minister of Forestry Djamaludin Suryohadikusumo said earlier
yesterday that he was not concerned about the effect of the yen's
depreciation on plywood exports as it was currently a sellers'
market. (pwn)