Indonesian wood products prices increase

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ITTO
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Indonesia’s domestic demand continues to be robust, offsetting the slow growth in exports.
According to research by McKinsey Indonesia, 90 million Indonesians will by 2030 be considered the “consumer class”, a group with annual incomes surpassing $3,600. This, says the McKinsey report, opens up business opportunities which could be as high as US$1.8 trillion.

In a press release the Bank of Indonesia (BoI) has said that it expected the economy to expand by 6.1 percent in 2013 and by around 6.4 to 6.8 in 2014.

On the other hand, the World Bank is now forecasting the Indonesian economy to grow 5.9 percent in 2013, down from its previous forecast of 6.2 percent in March.

However, the Bank report notes that expectations are for a moderate slowdown in 2013 but the risk of a more pronounced slowdown is high as recovery in exports is expected to be slow and domestic investment is likely to weaken.

Inflation in June 2013 increased 1.03% compared to one month earlier, equivalent to 5.90% year on year which is consistent with the BoI projections.

The escalation of inflationary pressures was anticipated because of the recent lowering of fuel subsidies. The BoI expects the impact of higher fuel prices to be temporary lasting approximately three months followed by a subsequent easing.

The BoI press release also notes that increased exports reduced the trade deficit in May. According to a Press Release issued today by BPS-Statistics Indonesia, the trade deficit in May was amounted to US$ 0.6 billion, which is smaller than that posted in April at US$ 1.7 billion. This was made possible by an increase in exports.

Encouragingly, the pace of export growth is most pronounced for manufactured goods, followed by primary goods.

Rupiah weakens sharply

On July 23 the rupiah was traded in the range of Rp10,120 – Rp10,265 to the dollar, a sharp drop from a month ago. The US dollar has strengthened recently. Adding to the downward pressure on the rupiah has been large foreign exchange transactions by companies as well exchange transactions for repatriation of dividend and investment returns.

Compared to the exchange rate at the beginning of 2013 the rupiah has depreciated almost 6%. Bank Indonesia Governor, Agus D.W. Martowardojo has said, “In the last few days, the rupiah has been converging to a new equilibrium level which reflects the Indonesian economic fundamentals”.

He urged everyone to remain calm saying the BoI will continue to conduct thorough surveillance and protect the stability of the currency in relation to economic fundamentals.
Indonesia to host market dialogue in August

The Indonesian Exporters Association (GPEI), in collaboration with PT Mutu Hijau Indonesia, will host the third High Level Market Dialogue - 2013 on “The New Era of Indonesian Legal Timber Products to meet Global Markets”.

Up for discussion will be the Indonesian SVLK (Timber Legality Assurance System), the Australian Illegal Logging Prohibition Bill, the EUTR (European Union Timber Regulation) and developments in other markets for verified legal timber products from Indonesia as well as how consumers are taking action to eliminate illegal timber from their markets.

With the introduction of Australia’s Illegal Logging Prohibition Act and the coming into effect of the EU Timber Regulation, along with further developments in the United States related to the U.S Lacey Act, as well as developments in China and Japan, GPEI together with PT. Mutu Hijau Indonesia see the value in once again convening a market dialogue, bringing together Indonesian and international trading partners from the forestry and timber sector.

The High Level Market Dialogue will be addressed by HE the Minister of Forestry, HE the Minister of Trade, HE the Minister of Industry and Minister of Cooperatives and Small and Medium Enterprises along with representation from Australia’s Department for Agriculture, Fisheries and Forestry, the UK Permanent Under Secretary of State for International Development and the EC Trade Commissioner.

Domestic Log Prices

Indonesia logs, domestic prices US$ per m³
Plywood logs
    core logs
220-240
Sawlogs (Meranti) 235-260
Falcata logs 200-230
Rubberwood 100-120
Pine 140-160
Mahoni (plantation mahogany) 150-200

                                                                                                                                          Domestic Ex-mill Sawnwood Prices

Indonesia, construction material, domestic US$ per m³
Kampar (Ex-mill)
AD 3x12-15x400cm
KD
AD 3x20x400cm
KD

445-500
-
655-700
-
Keruing (Ex-mill)
AD 3x12-15x400cm
AD 2x20x400cm
AD 3x30x400cm

400-490
520-580
440-500

                                                                                                                                              Export Plywood Prices

Indonesia ply MR BB/CC, export FOB US$ per m³
2.7mm 620-670
3mm 670-700
6mm -

                                                                                                                                          Domestic Plywood Prices

MR Plywood (Jakarta), domestic US$ per m³
9mm
410-450
12mm
390-440
15mm
300-340

                                                                                                                                              Export and Domestic Other Panel Prices

Indonesia, Other Panels, FOB US$ per m³
Particleboard
Export 9-18mm
Domestic 9mm
12-15mm
18mm
-
-
-
-
MDF
Export 12-18mm
Domestic 12-18mm

660-690
550-600

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