International demand good news for Indonesian upstream companies

By | 2021-06-25T06:32:51+00:00 June 25th, 2021|

First published in the International Tropical Timber Market Report (ITTR)

The chairman of the Association of Indonesian Forest Concessionaires (APHI), Indroyono Soesilo, says that as of April 2021, the forest products industry achieved a 21% increase in export earnings to USD4.42-billion.

Timber products being made in Indonesia. Photo by Flickr

Timber products being made in Indonesia. Photo by Flickr

According to Indroyono the export performance by downstream manufacturers in Indonesia was good news for upstream producers and the reports he has seen suggest orders for raw materials will remain firm for the next 5 months.

He added that to expand exporters need to diversify markets so as not to rely too heavily on traditional markets.

Indroyono added there is scope for expanding markets as in the EU Indonesia’s exports are worth only USD1-billion annually while the overall market is worth around USD52-billion.

Likewise, in the US Indonesia’s exports are only around USD1-1.52 billion whereas China exports to the US were around USD5-36 billion annually.

In related news the Ministry of Trade is encouraging light wood exports to the European market as this market has great potential to become a growth market for the light wood sector.

The Indonesian Light Wood Association (ILWA) has reported world demand for wood products is growing and, as a raw material for building materials and furniture, light wood such Albasia (Albizia sp) and Jabon (Anthocephalus cadamba) are in demand in international markets.