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Letter to Editor of Bernama News Agency11 September 2003 Dear Sir: I write in response to the article which was carried by Bernama (10 September 2003), which repeats The Jakarta Post article of yesterday (Prakosa targets Singapore, Malaysia to curb log smuggling). In this article, Apkindo, the Indonesian Wood Panel Association is reported as saying that exports of plywood from Indonesia plunged by 15% in the first semester of this year as China and Malaysia had "flooded the export market with cheaper plywood made from logs taken illegally from Indonesia". Firstly the rationale for falling Indonesian plywood exports - Apkindo itself had reported in the International Tropical Timber Market Report of August 16-31, 2003 (available on the Internet at www.itto.or.jp) as saying that "Indonesia's exports of wood products could fall by about 50% this year because of the various restrictions imposed by the government. By only allowing registered exporters to trade, Apkindo spokesman, Abbas Adhar said exports will fall sharply. In recent months the government of Indonesia has issued several new regulations aimed at eliminating illegal logging and smuggling when regional administrations make a strong commitment to stamp out illegal activities". This offers a plausible reason for the falling Indonesian export figures.# We also have a problem with the allegation that we are able to "flood the export market with cheaper plywood". Malaysia's plywood production has never been able to match that of Indonesia's which is almost double Malaysia's volume. There has not been any noticeable increase in our production or export. In fact, there has been a gradual decrease in Malaysian plywood production, from 4.4 million m3 in 2000 to 4.2 million m3 last year (Annex 1 : Malaysia: Production of Selected Timber Products (1990-2002)). A comparison of Malaysian plywood exports for the first three months of years 2001-2003 (Annex 2 : Malaysia: Export Of Plywood (January – March)) also does not show any significant changes. We also attach an FAO world list of plywood producers (Annex 3 : Global Ranking of Plywood Products) - Malaysia's plywood export was around 3.58 million m3 last year, compared to Indonesia's 6.3 million m3. Apart from inability of Malaysia to flood the export market with plywood in terms of volume, we are also skeptical about the allegation that our plywood is cheaper. The same ITTO report mentioned above shows that Indonesian plywood prices have been decreasing whereas Malaysian plywood prices have been increasing. A comparison table of Malaysian and Indonesian plywood prices for the first quarter of this year shows the price differentials - for 2.7mm ply, we have consistently been higher priced and for 3mm ply, we have never fallen lower than Indonesian plywood prices.(Annex 4 : Comparison of Indonesian & Malaysian Plywood Prices) Plywood is processed from round logs, which are peeled. The Malaysian government banned the importation of round logs from Indonesia effective 25 June 2002. There are no round logs coming into the country as the government has stepped up enforcement to implement this log import ban. Thanks very much. Aimi Lee Abdullah # We forgot to mention that the softening of the market for Indonesian plywood in the first quarter could be due to market disruptions & economic slowdown due to the SARS epidemic in the Far East markets and the effect of the Iraq War on the Middle East markets. |
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