Indonesia: Competitive China
In contrast to the confident mood in Malaysia, the
chairman of the Association of Indonesian Furniture and
Handicraft Exporters (Asmindo), has reportedly said that
the furniture industry in all ten member countries of
ASEAN share a common appreciation of the challenges
and risks of the ASEAN-China FTA.
In particular Asmindo thinks that furniture producers are
not ready to face the competition from Chinese producers.
The fear expressed is that furniture imports into ASEAN
countries from China could capture a major slice of the
domestic market. Imports currently account for around
30% of the domestic market and this could grow as
imports become cheaper as tariffs are removed.
Currently, there are 314 tariff items from eight sectors listed under the FTA. Asmindo is said to have been lobbying the Indonesian authorities to modify or suspend at least 5 of the 12 tariff items listed within the furniture sector. Export performance Exports of Indonesian timber products, especially sawnwood and plywood, have been on a decline since 2003, when exports were over 5 million cubic metre However, exports in the following year fell to 4.5 million cubic metre; to 3.5 million cubic metre in 2005; 3 million cubic metre in 2006; 2.9 million cubic metre in 2007, and 1.68 million m3 in 2008. Total exports for year 2009 only managed to reach 1.2 million cubic metres up to November 2009. Indonesian timber companies have reportedly said that it is inappropriate government policies and the failure to grasp present day market realities had contributed to this decline. The trade says that while the size of the international timber market has expanded over the past decade, Indonesia’s share of that market had declined. They added that China trade model was good as the sector has diversified its products and improved its value-added production technology. The industry also said that Malaysia is another good example to emulate; here industries manage pricing of timber products by spreading costs over a range of products including logs. Indonesian companies do not have this opportunity because of a log export ban in Indonesia.
Indonesia Log Prices
Currently, there are 314 tariff items from eight sectors listed under the FTA. Asmindo is said to have been lobbying the Indonesian authorities to modify or suspend at least 5 of the 12 tariff items listed within the furniture sector. Export performance Exports of Indonesian timber products, especially sawnwood and plywood, have been on a decline since 2003, when exports were over 5 million cubic metre However, exports in the following year fell to 4.5 million cubic metre; to 3.5 million cubic metre in 2005; 3 million cubic metre in 2006; 2.9 million cubic metre in 2007, and 1.68 million m3 in 2008. Total exports for year 2009 only managed to reach 1.2 million cubic metres up to November 2009. Indonesian timber companies have reportedly said that it is inappropriate government policies and the failure to grasp present day market realities had contributed to this decline. The trade says that while the size of the international timber market has expanded over the past decade, Indonesia’s share of that market had declined. They added that China trade model was good as the sector has diversified its products and improved its value-added production technology. The industry also said that Malaysia is another good example to emulate; here industries manage pricing of timber products by spreading costs over a range of products including logs. Indonesian companies do not have this opportunity because of a log export ban in Indonesia.
| Indonesia Log Prices |
||
| Indonesia logs, domestic prices | US$ per m³ | |
| Plywood logs | Face Logs | 187-230 |
| Core logs | 169-202 | |
| Sawlogs (Meranti) | |
178-239 ⇑ |
| Falcata logs | |
147-181 ⇑ |
| Rubberwood | |
50-74 ⇑ |
| Pine | |
160-199 ⇑ |
| Mahoni (plantation mahogany) | |
468-495 ⇑ |
| |
||
| Indonesia Sawnwood Prices | ||
| Indonesia, construction material, domestic | US$ per m³ | |
| Kampar (Ex-mill) | AD 3x12-15x400cm | 175-194 ⇑ |
| KD | 197-231 ⇑ | |
| AD 3x20x400cm | 218-241 ⇑ | |
| KD | 222-249 ⇑ | |
| Keruing (Ex-mill) | AD 3x12-15x400cm | 233-247 |
| AD 2x20x400cm | 220-238 ⇑ | |
| AD 3x30x400cm | 203-222 ⇑ | |
| |
||
| Indonesia Plywood Prices | ||
| Indonesia ply MR BB/CC, FOB | |
US$ per m³ |
| 2.7mm | |
392-449 |
| 3mm | |
349-390 |
| 6mm | |
328-370 |
| MR Plywood (Jakarta), domestic | ||
| 9mm | |
250-261 |
| 12mm | |
242-252 |
| 15mm | |
231-245 |
| |
||
| Other Indonesia Panel Prices | ||
| Indonesia, Other Panels, FOB | |
US$ per m³ |
| Particleboard | Export 9-18mm | 215-224 |
| Domestic 9mm | 191-203 | |
| 12-15mm | 184-195 | |
| 18mm | 174-186 | |
| MDF | Export 12-18mm | 248-261 |
| Domestic 12-18mm | 230-241 | |
| |
||
| Indonesia Added Value Product Prices | ||
| Indonesia, Mouldings, FOB | |
US$ per m³ |
| Laminated Boards Falcata wood | 297-309 ⇑ | |
| Red Meranti Mouldings 11x68/92mm x 7ft up | ||
| |
Grade A | 484-518 ⇑ |
| Grade B | 440-461 ⇑ | |