Indonesia plywood firms say temporary ban on log exports will push up prices
Copyright 2001 AFX News Limited
October 18, 2001
JAKARTA - The government's recent decision to impose a temporary ban on log exports will push up log prices, PT Adindo Foresta Indonesia's director Johanes Gozal said.
"The government's decision to temporary ban log exports over the next six months should prevent smuggling of illegal logs," he said in a letter to Jakarta Stock Exchange.
He added that if there is a decline in illegal logging, domestic price of logs should increase, which will have a positive impact on the company.
Earlier, the government imposed a temporary ban on the export of logs in an attempt to curb illegal felling.
Industry and Trade Minister Rini Suwandi said much of the illegal trade in logs has been camouflaged as legal exports and therefore her office agreed with the ban, at least for six months.
A halt in the illegal trade of logs, one of the reasons for the rapid deterioration of Indonesia's tropical forests, has been sought by several international donors to Indonesia, including the World Bank.
Meanwhile, another plywood producer, PT Tirta Mahakam Plywood Industry, said the government's decision to temporary ban log exports should have a limited impact on the company's operations and its bottom line as the company does not exports logs.
"The company only exports plywood or other derivative log products," he said.
PT Sumalindo Lestari Jaya's corporate secretary Julianto Kusnandar also said in a letter to JSX that the temporary ban on log exports should result in increased supplies in the domestic market and and reduce supplies in the world markets.
As a result, the move could increase log and plywood prices in the international market, ultimately benefiting local plywood companies, he said.
Kusnandar added the ban has no direct impact on the company because the company does not export logs.