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ood-based industrial associations have called on the government to take a number of measures to ensure sufficient supply for the domestic industry and increase the competitiveness of wood products.

Indonesian Rattan Furniture and Craft Association (AMKRI) chairman Hatta Sinatra said on Friday that the government should ban exports of natural rattan to help the rattan furniture industry survive.

“The government should revoke a 2009 ministerial regulation on rattan export terms and conditions to secure raw materials for the industry,” he said after a meeting among various wood industry stakeholders at the Industry Ministry.

The regulation, implemented in Aug. 11, 2009, allows the annual export of 35,000 tons of washed and sulphurized rattan with a diameter of 4 to 16 millimeters.

Exports of semi-finished rattan, from sega, irit and other types, can be sold as long as farmers get letters from the local rattan industry stating that the former will provide sufficient supplies to the latter.

Hatta said the number of rattan-craft firms in Cirebon, West Java, once accounting for more than 75 percent of the country’s total rattan craft firms, has declined sharply.

“Around 50 to 60 percent of the firms have gone bankrupt since the regulation went into effect,” he said.

He added that raw material shortages caused a price jump, while higher production costs could not be balanced by higher prices due to dwindling demands. Hatta also said rattan products depended solely on exports, as the domestic market was flooded with Chinese products.

He said exports of rattan products declined significantly since 2009. In 2008, for example, the rattan export was around US$300 million, before decreasing to $167 million in 2009 and to $138 million in 2010.

“If the government does not take significant steps, exports will only reach $100 million this year,” he said.

Indonesian Sawmill and Wood Working Association (ISWA) chairwoman Soewarni said the government should maintain a ban on log exports to ensure the supply to domestic industries and add a wood quota from natural forests to help the wood working sector grow.

“We really find it difficult to get wood from natural forests such as meranti and merbau because the government has reduced the quota for the industry,” she said.

The association, whose members produce housing components such as doors and floor materials, can currently only acquire some 22 million cubic meters of wood, down from about 40 million cubic meters several years ago.

ISWA data shows wood product exports have dwindled recently. In 2006, 2.3 million cubic meters were exported, while in 2009 and 2010 1.4 million and 1.7 million cubic meters were exported, respectively.

The export value in 2006 reached $1.295 billion, while in 2009 and 2010 it reached $957 million and $1.127 billion, respectively.

An Industry Ministry survey shows that, as of January 2010, the furniture industry was one of five local sectors most affected by the implementation of the ASEAN-China Free Trade Agreement (ACFTA).

Meanwhile, Industry Minister MS Hidayat said the government would improve relevant regulations to help the local wood industry.

“I will take the initiative to discuss it with the Trade Minister, Finance Minister and Forestry Minister to improve the competitiveness of our industry,” he said. (lnd)