KUCHING: Indonesia’s log production from natural forest and plantation forest concessions has significantly increased in March.
Logs harvested from natural forest concessions jumped by 19.92 per cent in March, from the previous month while logs produced from plantation forests climbed by 7.09 per cent month-on-month.
This condition, according to Global Timber Index (GTI) Indonesia report, was caused by the declining number of log stocks from the 2023 felling and the increasing number of concession companies working on the 2024 work plan approved by the government.
“Interestingly, however, when compared on a year-to-year basis with March 2023, the amount of log production in March 2024 was almost the same, for both natural and plantation forests.
“Overall, prices for logs from natural forests are still low as a result of low industrial demand and sluggish markets (domestic and export), but in some areas, there has been a slight increase in log prices from natural forests for some species.
“Natural forest logs that are still preferred by buyers are Keruing (Dipterocarpus spp), Bangkirai (Shorea laevis) and Kaput (Dryobalanops spp). In addition, buyers preference for Merbau (Intsia sp) products is trending upwards.
“Meanwhile, the price of logs from plantation forests is relatively stable, especially those used as raw materials for the pulp and paper industry,” added the report.
On exports of processed wood products, the report said products that recorded increase in March were crafts, wood furniture, woodworking and panels while products that registered decrease were prefabricated buildings, veneer, chipwood as well as pulp and paper.
In March, the benchmark export price (HPE) for wood products was raised for several products, including veneer from natural forests, sawn wood with a cross-sectional area of 1,000 sq mm to 4,000 sq mm from ebony and teak while the HPE was lowered for sawn wood with a cross-sectional area of 1,000 sq mm to 4,000 sq mm from Merbau and some other products.
On deforestation, data from the Indonesian Ministry of Environment and Forestry showed that the country’s net deforestation came down to 104,000 hectares in the 2021-2022 period from 114,500 hectares in 2020-2021.
In March 2024, the GTI-Indonesia index registered 37.1 per cent, a decrease of 6.9 percentage points from the previous month, was below the critical value (50%) for eight consecutive months. This indicated that the business prosperity of the superior timber enterprises represented by the GTI-Indonesia index shrank from February.
In March, the demand side for wood products was relatively stable in Indonesia. However, the production side contracted with a decrease in both the purchase quantity of raw materials and the production volume of main wood products.
“As for the 11 sub-indexes, the harvesting index and the existing orders index were above the critical value of 50%. The indexes for new orders, export orders and purchase price were equal to the critical value while the remaining 6 indexes were all below the critical value.
“Compared to the previous month, the indexes for new orders, export orders, existing orders, purchase price, employees and delivery time increased by 1.5-10.0 percentage points. And the indexes for harvesting, production, inventory of finished products, purchase quantity and inventory of main raw materials declined by 9.8-30.0 percentage point.”
