Study of Legal Timber Product Demand in Major Markets

Forest Governance and Multistakeholder Forestry Programme

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Study of Legal Timber Products Demand In Major Markets

Bintang C. H. Simangunsong, Ph.D.

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© 2010 Forest Governance and Multistakeholder Forestry Programme Printed by MFP Bintang C. H. Simangunsong, 2011, Study of Legal Timber Products Demand In Major Markets Photo credits : M Syukur Cover design : Basuki Design and layout : M Syukur Dipublikasi oleh Forest Governance and Multistakeholder Forestry Programme Gd. Manggala Wanabhakti Blok IV Lt 6 Wing B, R. 615-616 Jl. Jend. Gatot Subroto, Jakarta Tlp : + 62 - 21 - 570 1107 Fax : + 62 - 21 - 570 4397 www.mfp.or.id

Forest Governance and Multi-stakeholder Forestry Programme (MFP-II) Forest Governance and Multi-stakeholder Forestry Programme (MFP-II) merupakan program kerjasama bilateral bidang Kehutanan antara Pemerintah Indonesia dengan Pemerintah Inggris. Orientasi fokus kegiatan MFP-II diarahkan terhadap isyu Sistem Verifikasi Legalitas Kayu (SVLK) sebagai instrumen dalam rangka perbaikan tata kelola kehutanan dan kerjasama perdagangan kayu legal seperti Voluntary Partnership Agreement (VPA) sebagaimana diperkenalkan oleh Uni Eropa. Kegiatan MFP-II diarahkan untuk mencapai 3 (tiga) keluaran utama, yakni: (1) Kesiapan kapasitas para pihak dalam rangka implementasi SVLK, (2) Keberterimaan SVLK di pasar-pasar kayu utama, dan (3) Penguatan implementasi SVLK melalui mekanisme review sistemik.

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Contents

Page I. Introduction 1 II. World forest products production, imports, exports,

and consumptions 3 2.1. Plywood 3 2.2. Veneer Sheets 7 2.3. Particleboard 11 2.4. Fiberboard 15 2.5. Woodpulp 19 2.6. Paper and Paperboard 23

III. Indonesia forest product production, imports, exports,

and consumptions 27 3.1. Plywood 27 3.2. Veneer Sheets 29 3.3. Particleboard 31 3.4. Fiberboard 32 3.5. Woodpulp 34 3.6. Paper and Paperboard 35

IV. Shares of forest product imports from Indonesia to total imports

as reported by major importer countries 38 4.1. Plywood 38 4.2. Veneer Sheets 39 4.3. Particleboard 40 4.4. Fiberboard 41 4.5. Woodpulp 42 4.6. Paper and Paperboard 43

V. Drivers and principal policies affecting forest products markets 44

5.1. Drivers 44 5.2. Principal policies 46

VI. Indonesia’s Forest Industry Revitalization 52 VII. Conclusions 56

References 57

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List of Tables Page

Table 1. World World production, imports, and exports of plywood

in 2002-2009 3 Table 2. Apparent consumption and net export of plywood in major

consumer countries, 2002-2009 6 Table 3. World World production, imports, and exports of veneer sheets

in 2002-2009 7 Table 4. Apparent consumption and net export of veneer sheets in

major consumer countries, 2002-2009 10 Table 5. World production, imports, and exports of particleboard

in 2002-2009 11 Table 6. Apparent consumption and net export of particleboard in

major consumer countries, 2002-2009 14 Table 7. World production, imports, and exports of fiberboard

in 2002-2009 15 Table 8. Apparent consumption and net export of fiberboard in

major consumer countries, 2002-2009 18 Table 9. World World production, imports, and exports of woodpulp

in 2002-2009 19 Table 10. Apparent consumption and net export of woodpulp in

major consumer countries, 2002-2009 22 Table 11. World production, imports, and exports of paper and

paperboard in 2002-2009 23 Table 12. Apparent consumption and net export of paper and

paperboard in major consumer countries, 2002-2009 26 Table 13. Production, imports, and exports of Indonesia plywood

in 2003-2008 (MOF 2008-2009) 27 Table 14. Production, imports, and exports of Indonesia plywood

in 2002-2009 (FAO 2010) 28 Table 15. Production, imports, and exports of Indonesia veneer sheets

in 2003-2008 (MOF 2008-2009) 29

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Table 16. Production, imports, and exports of Indonesia veneer sheets in 2002-2009 (FAO 2010) 30

Table 17. Production, imports, and exports of Indonesia particleboard

in 2003-2008 (MOF 2008-2009) 31 Table 18. Production, imports, and exports of Indonesia particleboard

in 2002-2009 (FAO 2010) 31 Table 19. Production, imports, and exports of Indonesia fiberboard

in 2003-2008 (MOF 2008-2009) 32 Table 20. Production, imports, and exports of Indonesia fiberboard

in 2002-2009 (FAO 2010) 33 Table 21. Production, imports, and exports of Indonesia woodpulp

in 2003-2008 (MOF 2008-2009) 34 Table 22. Production, imports, and exports of Indonesia woodpulp

in 2002-2009 (FAO 2010) 34 Table 23. Production, imports, and exports of Indonesia paper and

paperboard in 2003-2008 (MOF 2008-2009) 36 Table 24. Production, imports, and exports of Indonesia fibreboard

in 2002-2009 (FAO 2010) 36 Table 25. Shares of plywood imports from Indonesia to total imports

as reported by major importer countries over the period 2002-2008 38

Table 26. Shares of veneer sheets imports from Indonesia to total imports


Table 27. Shares of particleboard imports from Indonesia to total imports


Table 28. Shares of fibreboard imports from Indonesia to total imports


Table 29. Shares of woodpulp imports from Indonesia to total imports


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Table 30. Shares of paper and paperboard imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008 43

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List of Figures

Page Figure 1. Plywood production, export, and import and their trends

by major world producers, exporters, and importers in the period 2002-2009 5

Figure 2. Veneer sheets production, export, and import and their trends


Figure 3. Particleboard production, export, and import and their trends


Figure 4. Fiberboard production, export, and import and their trends


Figure 5. Woodpulp production, export, and import and their trends


Figure 6. Paper and paperboard production, export, and import and

their trends by major world producers, exporters, and importers

in the period 2002-2009 25 Figure 7. Major importers of Indonesia's plywood over the

period 2003-2008 28 Figure 8. Major importers of Indonesia's veneer sheets over the

period 2003-2008 30 Figure 9. Major importers of Indonesia's particleboard over the

period 2003-2008 32

Figure 10. Major importers of Indonesia's fiberboard over the

period 2003-2008 33 Figure 11. Major importers of Indonesia's woodpulp over the

period 2003-2008 35 Figure 12. Major importers of Indonesia's paper and paperboard over

the period 2003-2008 37

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Kata Pengantar

Forest Governance and Multitakeholder Forestry Program (MFP II-Kehati)

merupakan program yang mendorong tata keloal kehutanan yang baik

melalui Sistem Verifikasi Legalitas Kayu (SVLK), serta mempromosikan

kimtimen Indonesia dalam meyakinkan dunia bahwa kayu yang keluar

dari Indonesia adalah legal dan dapat dipertanggungjawabkan sumbernya.

Salah satu yang akan dilakukan oleh MFP II dalam kerangka kerja ini

adalah melakukan Study Of Legal Timber Products Demand In Major

Markets sebagai bagian dari capaian MFP II untuk mendorong

keberterimaan SVLK oleh pasar internasional.

Buku yang Anda pegang ini bersumber dari laporan Study Of Legal Timber

Products Demand In Major Markets tersebut. Study ini memberikan

analisis proyeksi dan kecenderungan perdagangan dan konsumsi kayu

legal dan pangsa pasar kayu legal di pasar-pasar utama seperti Eropa,

Amerika, Jepang, China dan Korea. Perkembangan pasar kayu di negara-

negara tersebut memang dalam satu dasawarsa terakhir memperlihatkan

perkembangan yang dinamis. Salah satu perkembangan itu adalah

berubahnya sifat permintaan konsumen terhadap kayu. Dimana

sebelumnya permintaan terhadap kayu hanya berkaiatan dengan harga,

kualitas, dan pengiriman (delivery order). Saat ini ditengarai, konsumen

juga menginginkan kayu yang legal dan berasal dari hutan lestari, kayu

yang dipakai tidak membahayakan keamanan dan keselamatan

pemakaiannya, perusahaannya (baik pengelola hutan maupun industri

ix

pengolahan kayu ) memenuhi tanggung jawab sosial perusahaan, dan lain-

lain.

Paralel dengan itu, berbagai lembaga di negara-negara maju, baik lembaga

pemerintah maupun swasta, sudah mulai menerapkan kebijakan

pengadaan barang (procurement) baru, yaitu mensyaratkan supaya kayu

yang dipakai/dibutuhkan juga harus legal dan berasal dari hutan yang

dikelola secara lestari. Perkembangan ini mendorong lahirnya babak baru

pasar dan perdagangan kayu; yaitu munculnya rejim perdagangan kayu

yang legal dan lestari.

Beberapa negara tropis pengekspor kayu, termasuk Indonesia,

menunjukan keprihatinan yang serius dan mendalam terhadap

perkembangan ini. Sebab skema perdagangan kayu yang legal dan lestari

ini selain potensial memperbaiki lingkungan dan tata kelola kehutanan.

Juga potensial menghambat akses mereka pada pasar yang adil. Ada yang

menilai persyaratan legal dan lestari atas kayu dan produk-produk

kehutanan merupakan bentuk baru restriksi perdagangan. Hal ini dapat

menjadi hambatan perdagangan non tarif. Pemerintah Indonesia sendiri

sudah mengambil langkah-langkah penting merespon perkembangan ini

diantaranya dengan mengeluarkan Permenhut No .38/2009 tentang

Standar dan Pedoman Penilaian Kinerja Pengelolaah Hutan Produksi

Lestari dan Verifikasi Legalitas Kayu pada pada Pemegang Izin atau Pada

Hutan Hak, Standar dan Pedoman Penilaian Pengelolaan Hutan Produksi

Lestari dan verifikasi legalitas kayu. Serta Peraturan Dirjen BPK No 6/2009

tentang Standar dan Pedoman Penilaian Kerja PHPL dan Verifikasi

Legalitas Kayu. Kedua peraturan ini merupakan tekad dan komitmen

pemerintah untuk melembagakan perdagangan dan pasar kayu legal dan

lestari.

Dinilai juga perkembangan ini akan membatasi perluasan, diversifikasi

produk-produk kayu dan furniture di pasar internasional. Secara spesifik

keprihatinan dan perhatian kelihatannya harus diberikan kepada

kehutanan masyarakat, usaha kecil dan sektor informal yang mungkin

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kurang kemampuannya dalam memenuhi persyaratan baru dari skema

perdagangan kayu legal dan lestari. Mereka riskan terusir dari

perdagangan ekspor untuk pasar-pasar yang mensyaratkan legalitas dan

lestari.

Pada 2007 struktur ekspor produk-produk kehutanan Indonesia

berdasarkan nilai menunjukkan bahwa sekitar 33 % diantaranya di eskpor

ke pasar EU-27, 23 % ke Jepang, 18 % ke USA, 4 % ke Korea, 4% ke Cina, 3

% ke Taiwan, 1 % ke Malaysia, dan 14 % ke negara-negara yang lainnya. Ini

menunjukkan bahwa terjadinya perubahan kualitas permintaan konsumen-

konsumen di negara-negara khususnya Eropa, Jepang dan Amerika

terhadap produk produk kehutanan, termasuk kayu legal dan lestari, akan

punya implikasi serius terhadap ekonomi, perdagangan dan tata kelola

kehutanan. Multi stakeholder kehutanan Indonesia dituntut harus mampu

menyesuaikan diri dengan aturan dan persyaratan pasar dan perdagangan

kayu legal dan lestari.

Perkembangan ini akan memiliki implikasi terhadap peekonomian

perekonomian, perdagangan dan pasar kayu domestik dan tata kelola

kehutanan sehingga diperlukan pemetaan kepada publik dan dipahami

dengan baik.

Kami mengucapkan terima kasih kepada Bintang C.H. Simangunsong, Ph.D.

dari Forest Economist Fakultas Kehutanan Institut Pertanian Bogor yang

telah melakukan study ini. Kementerian Kehutanan RI, Kementerian

Perdagangan RI, dan Kementarian Luar Negeri RI serta kepada semua

pihak yang telah memberikan masukan dan mereview terhadap laporan

study ini.

Kami berharap buku ini dapat bermanfaat bagi pembaca. Selamat

membaca.

Diah Raharjo

Directur Program

Introduction

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THIS PAPER reviews market data and examine trends to understand what

forest products are sold today and where are they sold with emphasis to

Indonesia’ forest products. The potential for future market growth for

forest products were also reviewed.

The review and analysis are focused plywood, veneer sheets, particleboard,

fiberboard, woodpulp and paper and paperboard. These are known

commodities and have been proven in the marketplace. Industrial

roundwood and sawnwood were not analyzed in this paper. This was is

due to log export ban policy for the former and due to prohibited export

tax policy for the latter. Engineered wood products such as glued-

laminated timber, laminated veneer lumber and parallel strand lumber that

represent emerging markets for tropical timber were also not analyzed

due to the lack of data on production and trade for those products,

In the case of Indonesia, plywood product includes block board and

“laminated veneer lumber” and particleboard includes oriented strand

board (OSB) product. Moreover, as Indonesia’s forest products industry

facing a wood raw materials deficit and government policy and industry

push for innovation and value addition to resources, utilization of small-

diameter logs from plantations, logging waste, community forests, and

rubber estates by this industry continues to rise.

The analysis is based on statistics from the FAOSTAT database (FAO 2010),

the latest summary of global forest statistics available. For each product,

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year and country, apparent consumption was estimated by production +

imports - exports. The data on production, imports and exports were

obtained from the FAOSTAT database (FAO 2010). Similar data reported

in Forest Products Annual Market Review published by United Nations

Economic Commission for Europe (UNECE) and in Annual Review and

Assessment of the World Timber Situation published by ITTO was also

considered. In addition, data on production and trade provided by Ministry

of Forestry of Indonesia (MOF) and related agencies such as Central

Bureau of Statistics of Indonesia (BPS) and Indonesia Wood Based Panel

Association (APKINDO) were also used. Further, description of the drivers

and principal policies affecting forest products markets in the future was

based on Forest Products Annual Market Review published by UNECE and

on Annual Review and Assessment of the World Timber Situation

published by ITTO.

There are few data on domestic prices of forest products, and those that

are reported are often export or import prices. For countries that have

both import/export and domestic price, the two are usually highly

correlated, as they should be in competitive markets. Therefore, for this

study, the unit values of imports or exports were used to build the price

index. Quantities and values, in current United States dollars, of imports

and exports have been obtained from the FAOSTAT database. The nominal

price in each country, in current United States dollars, was estimated as the

weighted arithmetic average of the unit value of imports and exports.

The paper first review productions, exports, imports, consumptions, and

trade of forest products for the world and Indonesia. Then, drivers and

principal policies that are likely to affect the global and regional markets

for forest products were described. Finally, the need for Indonesia to

restructure and revitalize its forest products industry was explained.

Word forest product production, imports, exports, and consumptions

2

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2.1. Plywood DURING the period 2002-2009, world’s plywood production increased

from 59.25 millions m3 in year 2002 to 78.20 millions m3 in year 2009, a

32% increase (Table 1). Table 1 also shows world’s plywood export

quantity, import quantity, and price increased by 16%, 1%, and 41% over

the period 2002-2009, respectively.

Table 1. World production, imports, and exports of plywood in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 59.27 68.79 68.64 73.24 73.75 84.46 81.10 78.20 32% 4%Imports Quantity Million M3 20.85 21.96 24.56 24.56 26.47 25.45 22.21 21.07 1% 0%Imports Value US$ Million 7.35 7.88 10.02 10.31 11.91 12.02 11.89 9.57 30% 4%Exports Quantity Million M3 20.75 21.49 24.45 25.30 28.64 28.44 24.99 23.98 16% 2%Exports Value US$ Million 6.69 7.42 9.30 10.25 12.06 13.56 13.27 11.85 77% 9%Price US$/M3 338 352 394 412 435 475 533 475 41% 5%

Item Unit Year Growth (%)

Source: FAO (2010)

Major world’s producers were China, United States of America (USA),

Indonesia, Malaysia, Brazil and Japan, which together accounted for 78% of

world’s production (Figure 1a). The production increase has occurred

mainly in China followed by Malaysia, Brazil and Japan. In Indonesia and

USA, production decreased (Figure 1b)

Major world’s exporters were China, Malaysia, Indonesia, Brazil, and

Russian Federation, which together accounted for 72% of world’s export

(Figure 1c). The export increase has occurred mainly in China, Malaysia

and Russian Federation, while production decreased in Indonesia (Figure

1d).

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In order of importance, major world’s importers were United States of

America (USA), Japan, China, United Kingdom, the Republic of Korea, and

Germany, which together accounted for 61% of world’s import (Figure

1e). The import slightly decreased in those major world’s importers,

except Germany (Figure 1f).

Although China, United States of America and Japan were three of the

largest world’s producers, which together accounted for 59% of world’s

production, they were also importers, which together accounted for 45% of

world’s import.

During the period 2002-2009, world’s plywood consumption

significantly increased from 59.3 millions m3 in year 2002 to 78.2

millions m3 in year 2009, a 32% increase (Table 2). Over this period,

about 491.4 million m3 of plywood were consumed by only 16 countries,

which accounted for 84% of world’s plywood consumption. Three largest

consumers were China, United States of America and Japan, which together

accounted for 65% of world’s plywood consumption. Other important

consumers were Canada, India and the Republic of Korea. Total

consumption all European countries was about 57.5 millions m3 (or 9.8%),

mainly consumed by United Kingdom, Germany, Italy, French, Netherlands,

Denmark and Spain.

Although consumption in Malaysia (524%) and China (156%) were among

the fastest, not only these countries were net exporters but also major

world exporters. Meanwhile, although consumption decreased in United

States of America (-41%), the Republic of Korea (-33%), Japan (-21%) and

United Kingdom (-11%), but these countries were net and major world

importers, which together accounted for 38% of world’s plywood

consumptions (Table 2).

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China37%

USA18%

Malaysia9%

Indonesia6%

Brazil4%

Japan4%

Others22%

Major World Producers of Plywood over the period 2002-2009

(a)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Plywood production by Major Producer in the period 2002-2009

Others

Japan

Brazil

Indonesia

Malaysia

USA

China

(b)

China24%

Malaysia18%

Indonesia15%

Brazil10%

Russian Federation

5%

Others28%

Major World Exporters of Plywood over the period 2002-2009

(c)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Plywood export by Major Exporter in the period 2002-2009

Others

Russian Federation

Brazil

Indonesia

Malaysia

China

(d)

USA19%

Japan19%

China7%United

Kingdom6%

Korea, Rep.5%

Germany5%

Others39%

Major World Importers of Plywood over the period 2002-2009

(e)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Plywood import by Major Importer in the period 2002-2009

Others

Germany

Korea, Rep.

United Kingdom

China

Japan

USA

(f)

Figure 1. Plywood production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

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Table 2. Apparent consumption and net export of plywood in major consumer countries, 2002-2009

Source: FAO (2010)

Amount % Cum.% annual 2002-2009 China 11.7 21.3 19.0 21.7 21.0 28.7 30.0 30.0 183.6 31% 31% 14% 156% 0.4 0.5 2.8 4.2 7.1 7.7 6.2 6.2 United States of America 18.7 18.6 20.2 20.1 19.6 16.4 12.9 10.9 137.4 23% 55% -7% -41% -3.4 -3.7 -5.4 -5.7 -5.9 -4.0 -2.6 -2.1 Japan 7.8 7.2 8.3 7.9 8.3 7.1 6.2 6.2 59.1 10% 65% -3% -21% -5.1 -4.2 -5.1 -4.7 -5.0 -4.1 -3.6 -3.6 Canada 1.6 1.7 1.7 1.9 2.0 3.5 3.5 2.7 18.6 3% 68% 8% 67% 0.6 0.5 0.7 0.4 0.3 -0.9 -1.3 -0.6 India 1.6 1.7 1.9 2.1 2.1 2.1 2.2 2.2 15.9 3% 71% 4% 34% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Korea, Republic of 2.2 2.3 1.9 1.9 1.8 1.9 1.5 1.5 14.9 3% 73% -6% -33% -1.3 -1.4 -1.1 -1.2 -1.3 -1.2 -0.8 -0.8 United Kingdom 1.2 1.2 1.4 1.3 1.4 1.6 1.4 1.1 10.6 2% 75% -2% -11% -1.2 -1.2 -1.4 -1.3 -1.4 -1.6 -1.4 -1.1 Germany 1.0 1.1 1.2 1.1 1.2 1.4 1.2 1.0 9.2 2% 76% -1% -6% -0.7 -0.9 -0.9 -0.9 -1.0 -1.1 -1.0 -0.8 Malaysia 0.7 0.8 0.4 0.5 0.6 0.8 0.2 4.6 8.7 1% 78% 30% 524% 3.6 3.9 4.3 4.5 4.9 4.8 5.4 4.6 Indonesia 1.7 1.0 0.5 1.2 0.8 0.8 0.9 0.9 7.8 1% 79% -9% -50% 5.8 5.1 4.0 3.4 3.0 2.7 2.5 2.5 Italy 0.9 0.9 0.9 0.8 0.7 0.7 0.8 0.6 6.1 1% 80% -5% -31% -0.4 -0.3 -0.4 -0.4 -0.3 -0.3 -0.3 -0.3 France 0.6 0.6 0.6 0.6 0.7 0.6 0.6 1.0 5.3 1% 81% 7% 58% -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.3 -0.6 Netherlands 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.4 4.0 1% 82% -4% -24% -0.5 -0.5 -0.5 -0.5 -0.5 -0.6 -0.6 -0.4 Denmark 0.2 0.3 0.3 0.3 0.3 0.3 0.1 2.2 4.0 1% 83% 41% 990% -0.2 -0.3 -0.3 -0.3 -0.3 -0.3 -0.1 -2.2 Saudi Arabia 0.3 0.4 0.3 0.4 0.4 0.4 0.5 0.5 3.1 1% 83% 6% 50% -0.3 -0.4 -0.3 -0.4 -0.4 -0.4 -0.5 -0.5 Spain 0.4 0.4 0.4 0.6 0.5 0.5 0.1 0.2 3.1 1% 84% -10% -52% 0.0 0.0 0.0 0.0 0.0 -0.1 0.1 0.1 Others 8.0 8.7 9.2 10.3 11.9 17.0 18.6 12.4 96.1 16% 100% 6% 55%

European Union 6.4 6.5 6.9 6.9 7.6 8.1 7.0 8.1 57.5 10% 3% 26% -2.2 -2.4 -2.6 -2.6 -3.1 -3.6 -3.0 -4.7 World Production 59.3 68.8 68.6 73.2 73.7 84.5 81.1 78.2 587.5 100% 4% 32%

2004 2005 2006 2007 2008 2009 2008 2009 2002-2009 Change (%) 2002 2003 Major Consumers Apparent consumption (million m3) Net Export = Export - Import (million m3)

2002 2003 2004 2005 2006 2007

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2.2. Veneer sheets

During the period 2002-2009, world’s veneer sheets production increased

from 8.49 millions m3 in year 2002 to 12.06 millions m3 in year 2009, a 42%

increase (Table 3). World’s veneer sheets export and import quantities

decreased by 36% and 39%, respectively, whereas price sharply increased by

76% during the period 2002-2009.

Table 3. World production, imports, and exports of veneer sheets in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 8.49 11.04 11.50 12.37 11.82 11.98 12.23 12.06 42% 5%Imports Quantity Million M3 4.22 4.08 4.56 3.53 3.39 3.96 3.73 2.58 -39% -7%Imports Value US$ Million 2.60 2.90 3.34 3.44 3.81 4.08 3.58 2.86 10% 1%Exports Quantity Million M3 4.22 4.06 4.56 3.98 3.83 3.74 3.05 2.71 -36% -6%Exports Value US$ Million 2.48 2.70 3.19 3.37 3.47 3.67 3.38 2.72 10% 1%Price US$/M3 602 688 716 906 1,008 1,006 1,028 1,056 76% 8%

Item UnitYear Growth (%)

Source: FAO (2010)

Major world’s producers were China, Malaysia, Canada, Brazil, New Zealand,

the Republic of Korea, and Indonesia, which together accounted for 56% of

world’s production (Figure 2a). The production increase has occurred mainly

in China and Malaysia. In the Republic of Korea, Canada and New Zealand

production decreased (Figure 2b).

Major world’s exporters were Canada, United States of America, Malaysia,

Brazil, Côte d'Ivoire, China, and New Zealand, which together accounted for

65% of world’s export (Figure 2c). The export increase has occurred mainly

in Canada, Brazil and New Zealand, while production decreased sharply in

United States of America and Malaysia (Figure 2d).


America (USA), China, the Republic of Korea, Canada, and Italy, which together

accounted for 50% of world’s import (Figure 2e). The import decrease has

occurred mainly in United States of America (USA) followed by China, the

Republic of Korea and Canada (Figure 2f).

Although China, Canada and the Republic of Korea among the largest world’s

producers, which together accounted for 36% of world’s production, they

were also importers, which together accounted for 23% of world’s import. On

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the other hand, although, United States of America’s import significantly

decreased, it was still the largest single importer country.

During the period 2002-2009, world’s veneer sheets consumption

significantly increased from 8.5 millions m3 in year 2002 to 12.1 millions m3

in year 2009, a 42% increase (Table 4). Over this period, about 62.6 million m3

of veneer sheets were consumed by only 16 countries, which accounted for

68% of world’s veneer sheets consumption. The largest single consumer was

China (26%). Other important consumers were the Republic of Korea (7%), Italy

(5%), United States of America (5%), and New Zealand (4%). Total consumption

all European countries was about 16.7 millions m3 (or 18%), mainly consumed

by Italy, Germany, French, Spain, Denmark and Poland.

Consumption grew fastest in Indonesia (742%) followed by Malaysia (216%),

China (182%), and Canada (73%). However, Malaysia and Canada were net and

major world exporters, whereas China was a net and one of major world

importers. Although consumption decreased in United States of America and

the Republic of Korea, these countries were still net and major world importers.

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China25%

Indonesia3%

Canada6%

New Zealand5%

Brazil5%Malaysia

7%

Korea, Rep.5%

Others44%

Major World Producers of Veneer Sheetsover the period 2002-2009

(a)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Veneer Sheets production by Major Producer in the period 2002-2009

Others

Korea, Rep.

Malaysia

Brazil

New Zealand

Canada

Indonesia

China

(b)

Canada21%

USA17%

Malaysia11%Brazil

4%Côte d'Ivoire

3%

China5%

New Zealand4%

Others35%

Major World Exporters of Veneer Sheetsover the period 2002-2009

(c)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Veneer Sheets export by Major Exporter in the period 2002-2009

Others

New Zealand

China

Côte d'Ivoire

Brazil

Malaysia

USA

Canada

(d)

China9%

USA21%

Canada7%

Korea, Rep.7%

Italy6%

Others50%

Major World Importers of Veneer Sheetsover the period 2002-2009

(e)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Veneer Sheets import by Major Importer in the period 2002-2009

Others

Italy

Korea, Rep.

Canada

USA

China

(f)

Figure 2. Veneer sheets production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

13

Table 4. Apparent consumption and net export of veneer sheets in major consumer countries, 2002-2009

Amount % Cum.% annual 2002-2009China 1.1 3.3 3.3 3.3 3.2 3.2 3.2 3.2 23.9 26% 26% 16% 182% -0.3 -0.2 -0.2 -0.2 -0.1 -0.1 -0.1 -0.1Korea, Republic of 1.1 1.0 0.9 0.9 0.8 0.7 0.6 0.6 6.6 7% 33% -8% -46% -0.4 -0.3 -0.3 -0.3 -0.3 -0.3 -0.2 -0.2Italy 0.6 0.6 0.6 0.6 0.6 0.8 0.6 0.5 5.0 5% 39% -4% -24% -0.2 -0.2 -0.2 -0.2 -0.2 -0.3 -0.2 -0.2United States of America 0.7 0.6 0.9 0.6 0.5 0.4 0.4 0.4 4.5 5% 44% -8% -44% -0.3 -0.2 -0.5 -0.2 -0.1 0.0 0.0 0.0New Zealand 0.5 0.5 0.5 0.5 0.5 0.6 0.4 0.4 3.9 4% 48% -3% -20% 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Germany 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.4 3.6 4% 52% 0% 3% 0.0 0.0 0.0 -0.1 -0.1 -0.1 -0.1 0.0Malaysia 0.2 0.3 0.3 0.3 0.3 0.4 0.5 0.7 3.1 3% 55% 18% 216% 0.4 0.3 0.3 0.4 0.3 0.3 0.1 0.3Indonesia 0.0 0.3 0.1 1.0 0.2 0.3 0.4 0.4 2.7 3% 58% 36% 742% 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0India 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 2.1 2% 60% 2% 15% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0France 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 1.4 1% 62% -9% -50% -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 0.0Canada 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 1.3 1% 63% 8% 73% 0.6 0.6 0.8 0.8 0.7 0.4 0.3 0.2Japan 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 1.2 1% 65% -3% -18% -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Spain 0.1 0.1 0.2 0.2 0.2 0.2 0.1 0.1 1.2 1% 66% -5% -28% -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 0.0Denmark 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.8 1% 67% 5% 45% -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 0.0 0.0Poland 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.8 1% 68% 1% 7% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Viet Nam 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.7 1% 68% -255% -2289% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Others 2.8 2.9 3.3 3.5 3.8 3.8 4.5 4.4 28.9 32% 100% 6% 54%

European Union 2.0 1.9 2.1 2.2 2.2 2.4 2.1 1.7 16.7 18% -2% -15% -0.4 -0.4 -0.5 -0.6 -0.6 -0.8 -0.6 -0.3World Production 8.5 11.0 11.5 12.4 11.8 12.0 12.2 12.1 91.5 100% 5% 42%

2007 2008 20092004 2005 20062005 2006 2007 2008 2009 2002-2009Major ConsumersApparent consumption (million m3) Net Export = Export - Import (million m3)

2002 2003 2004 Change (%) 2002 2003

Source: FAO (2010)

14

2.3. Particleboard

During the period 2002-2009, world’s particleboard production significantly

increased from 85.81 millions m3 in year 2002 to 93.95 millions m3 in year

2009, a 9% increase (Table 5). Table 3 also shows world’s particleboard

export quantity and import quantity were decreased by 9% and 11%,

respectively, whereas particleboard price increased by 51% over the period

2002-2009,

Table 5. World production, imports, and exports of particleboard in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 85.81 92.08 100.50 102.71 108.68 110.77 103.61 93.95 9% 1%Imports Quantity Million M3 24.11 25.15 28.68 29.28 30.40 28.81 26.00 21.36 -11% -2%Imports Value US$ Million 3.99 5.39 7.22 7.27 7.05 7.29 6.86 5.34 34% 4%Exports Quantity Million M3 24.32 25.48 28.72 29.38 31.71 32.00 26.70 22.24 -9% -1%Exports Value US$ Million 4.16 5.47 7.43 7.36 7.49 10.34 7.50 5.74 38% 5%Price US$/M3 168 214 255 249 234 290 272 254 51% 6%


Source: FAO (2010)

Major world’s producers were United States of America (USA), Canada,

Germany, China, and France, which together accounted for 53% of world’s

production (Figure 3a). The production increase has occurred mainly in China

followed by French and Germany, whereas in United States of America (USA),

and Canada, production drastically decreased (Figure 3b).

Major world’s exporters were Canada, Germany, Austria, Belgium, and France,

which together accounted for 61% of world’s export (Figure 3c). The export

decrease has occurred mainly in Canada and France, while production

increased in Germany (Figure 3d).

The single largest importer country was United States of America followed by

Germany, United Kingdom, China, Poland, and the Republic of Korea, which all

together accounted for 51% of world’s import (Figure 3e). The import

decrease has occurred mainly in United States of America (USA) followed by

United Kingdom, Republic of Korea and China. In Germany and Poland, import

slightly increased (Figure 3f).

Although United States of America, Germany and China were among of the


15


world’s import.

During the period 2002-2009, world’s particleboard consumption

significantly increased from 85.8 millions m3 in year 2002 to 93.9 millions m3

in year 2009, a 9% increase (Table 6). Over this period, about 588.2 million m3

of particleboard were consumed by only 16 countries, which accounted for

74% of world’s particleboard consumption. The largest single consumer was

United States of America (27%). Other important consumers were Germany

(9%), and China (8%). Total consumption all European countries was about

292.4 millions m3 (or 37%), mainly consumed by Germany, Poland, Italy,

French, United Kingdom and Spain.

Consumption grew fastest in Romania (244%), followed by China (159%),

Poland (71%), Greece (35%) and Canada (33%). China was a net and major

importer, whereas Canada was a net and major exporter. Although

particleboard consumption in United States of America and United Kingdom

were sharply decreased by 41% and 25%, respectively, these two countries

were net and major importers in the world. Other important net importers were

Japan, the Republic of Korea, and Denmark.

16

USA20%

Canada11%

Germany10%

China8%

France4%

Others47%

Major World Producers of Particleboardover the period 2002-2009

(a)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Particleboard production by Major Producer in the period 2002-2009

Others

France

China

Germany

Canada

USA

(b)

Canada29%

Germany13%

France6%Austria

7%

Belgium6%

Others39%

Major World Exporters of Particleboardover the period 2002-2009

(c)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Particleboard export by Major Exporter in the period 2002-2009

Others

Belgium

Austria

France

Germany

Canada

(d)

USA30%

Germany8%

United Kingdom

4%China

3%Poland

3%

Korea, Rep.3%

Others49%

Major World Importers of Particleboardover the period 2002-2009

(e)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Particleboard import by Major Importer in the period 2002-2009

Others

Korea, Rep.

Poland

China

United Kingdom

Germany

USA

(f)

Figure 3. Particleboard production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

17

Table 6. Apparent consumption and net export of particleboard in major consumer countries, 2002-2009

Amount % Cum.% annual 2002-2009United States of America 27.2 29.7 31.5 32.4 32.1 27.5 21.4 16.2 218.1 27% 27% -7% -41% -8.3 -9.0 -9.7 -10.2 -9.7 -6.4 -3.2 -2.7Germany 7.7 8.2 9.0 9.1 9.2 10.1 9.4 8.1 70.8 9% 36% 1% 5% 1.0 1.1 1.6 1.8 1.6 0.8 0.8 1.2China 4.6 6.4 7.4 6.7 9.2 9.0 12.0 12.0 67.3 8% 45% 15% 159% -0.9 -0.9 -0.8 -0.8 -0.7 -0.7 -0.5 -0.5Poland 2.9 3.4 4.1 3.9 4.6 5.5 5.4 5.0 34.9 4% 49% 8% 71% 0.2 0.3 0.0 0.0 -0.1 -0.2 -0.3 -0.3Italy 3.5 3.6 3.9 3.8 3.8 3.7 3.7 3.0 29.0 4% 53% -2% -15% -0.2 -0.2 -0.2 -0.3 -0.1 -0.1 -0.4 -0.3France 3.1 3.1 3.4 3.4 3.1 3.7 3.5 4.1 27.4 3% 56% 4% 33% 0.7 0.8 1.0 1.2 1.7 1.2 1.0 0.4United Kingdom 3.7 3.5 3.7 3.5 3.6 3.6 2.7 2.8 27.0 3% 59% -4% -25% -1.2 -1.0 -1.0 -1.0 -0.9 -0.9 -0.7 -0.4Canada 3.2 2.8 1.9 3.1 3.6 3.7 2.9 4.2 25.4 3% 63% 4% 33% 8.1 8.9 9.4 9.3 8.9 8.7 5.1 2.9Spain 3.6 3.5 3.6 3.5 3.5 3.5 2.1 1.9 25.2 3% 66% -9% -48% -0.2 -0.3 -0.3 -0.3 -0.2 -0.2 0.3 0.5Japan 1.6 1.7 1.6 1.6 1.7 1.7 1.5 1.5 12.9 2% 67% -1% -7% -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4Korea, Republic of 1.6 1.5 1.8 1.6 1.7 1.7 1.5 1.5 12.8 2% 69% -1% -9% -0.9 -0.7 -0.9 -0.8 -1.0 -0.8 -0.5 -0.5Australia 1.0 1.1 1.1 1.0 1.0 1.0 1.0 1.1 8.3 1% 70% 1% 5% -0.1 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.1Romania 0.4 0.5 0.6 0.7 0.9 1.1 2.0 1.5 7.6 1% 71% 19% 244% -0.3 -0.1 -0.1 -0.2 -0.1 -0.3 -1.0 0.2Denmark 1.0 1.0 1.1 1.2 0.6 0.3 1.1 1.1 7.5 1% 72% 3% 20% -0.6 -0.6 -0.8 -0.8 -0.1 0.0 -0.8 -0.8Greece 0.7 0.9 0.8 0.8 1.0 1.0 1.0 1.0 7.2 1% 73% 4% 35% 0.0 0.0 0.0 0.0 -0.2 -0.1 -0.1 -0.1Austria 0.9 0.9 0.9 0.9 0.9 0.7 0.7 0.9 6.9 1% 74% 0% 2% 1.5 1.5 1.5 1.5 1.5 2.0 1.8 1.3Others 18.9 20.4 24.3 25.4 28.0 33.1 31.7 28.0 209.9 26% 100% 6% 48%

European Union 33.0 33.9 36.6 37.0 37.5 40.4 37.9 36.1 292.4 37% 1% 9% 2.9 3.4 3.6 3.7 5.4 4.2 3.6 3.2World Production 85.8 92.1 100.5 102.7 108.7 110.8 103.6 93.9 798.1 100% 1% 9%

2004 2005 2006 2007 2008 20092008 2009 2002-2009 Change (%) 2002 2003Major ConsumersApparent consumption (million m3) Net Export = Export - Import (million m3)

2002 2003 2004 2005 2006 2007

Source: FAO (2010)

18

2.4. Fiberboard

During the period 2002-2009, world’s fiberboard production increased from

41.00 millions m3 in year 2002 to 71.20 millions m3 in year 2009, a 74%

increase (Table 7). Table 4 also shows world’s fiberboard export quantity,

import quantity, and price increased by 31%, 9%, and 56% over the period

2002-2009, respectively.

Table 7. World production, imports, and exports of fiberboard in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 41.00 47.86 56.00 63.15 70.11 74.39 71.67 71.20 74% 8%Imports Quantity Million M3 17.31 18.90 21.57 22.44 23.05 24.74 21.26 18.91 9% 1%Imports Value US$ Billion 4.33 5.31 6.68 7.28 7.82 9.15 8.86 7.63 76% 8%Exports Quantity Million M3 16.87 17.58 19.92 21.69 22.39 27.07 23.61 22.11 31% 4%Exports Value US$ Billion 4.44 5.17 6.40 7.17 8.11 10.59 10.27 8.78 98% 10%Price US$/M3 257 287 315 327 351 381 426 400 56% 7%


Source: FAO (2010)

Major world’s producers were China, United States of America (USA),

Germany, Poland, Canada, and Brazil, which together accounted for 63% of

world’s production (Figure 4a). The production increase was mostly in China

followed by Germany, Poland, and Brazil. In Canada, production decreased

(Figure 4b).

Major world’s exporters were Germany, Canada, France, Malaysia, Poland,

China, and Spain, which together accounted for 50% of world’s export (Figure

4c). The export increase has occurred mainly in China, Poland and Spain,

while export decreased in Canada, French, Germany, and Malaysia (Figure 4d).


America (USA), China, Germany, United Kingdom, Belgium, and the Republic of

Korea, which together accounted for 37% of world’s import (Figure 4e). The

import increase has occurred mainly in United States of America (USA) followed

by Belgium. In China, Germany, United Kingdom, and the Republic of Korea,

import decreased (Figure 4f).

Although United States of America, China and Germany were three of the



world’s import.

19

During the period 2002-2009, world’s fiberboard consumption significantly

increased from 41.0 millions m3 in year 2002 to 71.2 millions m3 in year

2009, a 74% increase (Table 8). Over this period, about 376.2 million m3 of

fiberboard were consumed by only 16 countries, which accounted for 76% of

world’s fiberboard consumption. Two largest consumers were China and

United States of America, which together accounted for 48% of world’s

fiberboard consumption. Other important consumers were Germany, the

Republic of Korea, Japan, United Kingdom, Poland, Italy, Malaysia and Canada.

Total consumption all European countries was about 105.7 millions m3 (or

21%), mainly consumed by Germany, United Kingdom, Poland and Italy.

Although consumption grew fastest in Malaysia (860%) followed by Saudi

Arabia (242), French (223%), China (176%) and Poland (75%), in order of

importance, major world’s net importers were United States of America (USA),

United Kingdom, Japan, Italy, Saudi Arabia and the Republic of Korea.

20

China33%

USA11%

Germany9%Poland

4%

Brazil3%

Canada3%

Others37%

Major World Producers of Fiberboardover the period 2002-2009

(a)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Fiberboard production by Major Producer in the period 2002-2009

Others

Canada

Brazil

Poland

Germany

USA

China

(b)

Germany16%

China8%

France5%

Canada6%

Malaysia5%

Poland5%

Spain5%

Others50%

Major World Exporters of Fiberboardover the period 2002-2009

(c)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Fiberboard export by Major Exporter in the period 2002-2009

Others

Spain

Poland

Malaysia

Canada

France

China

Germany

(d)

USA13%

China9%

Belgium4%

Germany5%

United Kingdom

4%Korea, Rep.

2%

Others63%

Major World Importers of Fiberboardover the period 2002-2009

(e)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

M3

Year

Fiberboard import by Major Importer in the period 2002-2009

Others

Korea, Rep.

United Kingdom

Germany

Belgium

China

USA

(f)

Figure 4. Fiberboard production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

21

Table 8. Apparent consumption and net export of fiberboard in major consumer countries, 2002-2009

Amount % Cum.% annual 2002-2009China 9.8 13.6 17.4 20.8 24.0 25.4 27.1 27.1 165.0 33% 33% 16% 176% -2.2 -2.3 -1.7 -0.2 0.7 2.0 2.0 2.0United States of America 8.4 8.9 10.1 10.3 10.4 9.0 7.6 7.0 71.8 14% 48% -2% -16% -2.0 -2.2 -2.6 -2.6 -2.5 -2.0 -0.9 -0.7Germany 2.5 2.8 2.9 2.9 3.8 2.9 3.3 2.8 24.0 5% 53% 1% 9% 1.7 1.9 2.2 2.6 2.1 3.3 3.3 2.2Korea, Republic of 1.9 1.9 1.8 2.0 2.1 2.3 2.0 2.0 16.0 3% 56% 0% 3% -0.7 -0.5 -0.3 -0.4 -0.4 -0.5 -0.3 -0.3Japan 1.6 1.5 1.6 1.6 1.6 1.8 1.4 1.4 12.5 3% 58% -1% -9% -0.7 -0.7 -0.7 -0.8 -0.7 -0.8 -0.6 -0.6United Kingdom 1.6 1.6 1.7 1.5 1.7 1.6 1.3 1.2 12.3 2% 61% -4% -25% -0.8 -0.8 -0.8 -0.7 -0.8 -0.8 -0.7 -0.6Poland 1.0 1.2 1.1 1.5 1.8 1.9 1.8 1.8 12.2 2% 63% 8% 75% 0.4 0.5 0.8 0.8 0.6 0.7 0.7 0.8Italy 1.3 1.3 1.3 1.5 1.5 1.9 1.6 1.6 12.1 2% 66% 3% 21% 0.0 -0.3 -0.3 -0.4 -0.3 -0.7 -0.7 -0.8Malaysia 0.2 1.2 1.7 1.5 1.4 1.4 2.2 2.2 12.0 2% 68% 38% 860% 1.0 1.0 1.0 1.0 1.2 1.2 0.4 0.4Canada 1.0 0.8 1.2 1.2 1.3 1.6 1.7 1.4 10.3 2% 70% 5% 40% 0.9 1.1 0.9 0.8 0.6 0.4 0.1 -0.1Spain 0.8 0.9 0.9 1.0 1.4 1.1 0.6 0.5 7.1 1% 72% -8% -43% 0.3 0.2 0.4 0.3 -0.1 0.5 0.6 0.7France 0.5 0.5 0.7 0.7 0.9 1.0 1.1 1.5 6.9 1% 73% 18% 223% 0.6 0.7 0.6 0.6 0.5 0.4 0.1 -0.3Belgium 0.5 0.7 0.8 0.9 0.4 0.4 0.3 0.4 4.4 1% 74% -6% -33% -0.2 -0.4 -0.4 -0.5 -0.2 -0.1 -0.1 -0.1Australia 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.3 3.5 1% 75% -6% -37% 0.3 0.4 0.3 0.4 0.3 0.3 0.3 0.3Austria 0.4 0.3 0.4 0.5 0.6 0.3 0.4 0.4 3.3 1% 75% 1% 10% 0.5 0.5 0.4 0.3 0.4 0.5 0.5 0.5Saudi Arabia 0.2 0.2 0.2 0.2 0.2 0.6 0.7 0.7 2.9 1% 76% 19% 242% -0.2 -0.2 -0.2 -0.2 -0.2 -0.6 -0.7 -0.7Others 8.8 10.0 11.6 14.6 16.5 20.7 18.1 18.9 119.2 24% 100% 12% 116%


2007 2008 20092004 2005 20062005 2006 2007 2008 2009 2002-2009Major ConsumersApparent consumption (million m3) Net Export = Export - Import (million m3)

2002 2003 2004 Change (%) 2002 2003

Source: FAO (2010)

22

2.5. Woodpulp

During the period 2002-2009, world’s woodpulp production slightly

decreased from 167.91 millions ton in year 2002 to 162.30 millions ton in

year 2009, a 3% decrease (Table 9). Table 4 also shows world’s woodpulp

export quantity, import quantity, and price increased by 11%, 8%, and 47% over

the period 2002-2009, respectively.

Table 9. World production, imports, and exports of woodpulp in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 167.91 171.33 175.92 175.11 175.71 180.74 177.15 162.30 -3% 0%Imports Quantity Million M3 40.39 40.85 43.86 44.96 45.78 46.70 46.90 43.80 8% 1%Imports Value US$ Million 17.27 19.33 22.48 23.41 25.84 30.37 33.96 27.87 61% 7%Exports Quantity Million M3 40.04 40.15 42.41 42.57 46.34 47.94 48.91 44.38 11% 1%Exports Value US$ Million 15.93 17.49 20.32 20.85 23.99 28.62 31.81 25.67 61% 7%Price US$/M3 413 455 496 506 541 623 686 607 47% 6%

Growth (%)YearUnitItem

Source: FAO (2010)

Major world’s producers were United States of America (USA), Canada,

Sweden, Finland, Japan, Indonesia and China, which together accounted for

70% of world’s production (Figure 5a). The production decreased mostly in

United States of America (USA) and Canada. In China production increased

(Figure 5b).

Major world’s exporters were Canada, United States of America (USA),

Sweden, Indonesia and Finland, which together accounted for 57% of world’s

export (Figure 5c). The export increase has occurred mainly in United States of

America (USA), Indonesia, Belgium and Spain, while production decreased in

Canada and Finland (Figure 5d).

In order of importance, major world’s importers were China, United States of

America (USA), Germany, Italy, the Republic of Korea, Japan and France, which

together accounted for 65% of world’s import (Figure 5e). The import

increase has occurred mainly in China. In United States of America (USA), Italy,

Japan and France, import decreased (Figure 5f).

Although United States of America, Japan and China were among the largest

world’s producers, which together accounted for 40% of world’s production,

23

they were also importers, which together accounted for 37% of world’s

import.

During the period 2002-2009, world’s woodpulp consumption slightly

decreased from 167.9 million tones in year 2002 to 162.3 million tones in year

2009, a 3% decrease (Table 10). Over this period, about 1,143.3 million tones

of woodpulp were consumed by only 16 countries, which accounted for 82% of

world’s woodpulp consumption. The single largest consumer was United

States of America, which accounted for 31% of world’s woodpulp

consumption. Other important consumers were China, Canada, Japan, Finland,

Sweden and Germany, which together accounted for 37% of world’s woodpulp

consumption.

Consumption grew fastest in China (71%) followed by India (48%) and Spain

(15%), Germany (6%) and Austria (6%). However, in order of importance, major

world’s net importers were China, Germany, Italy, the Republic of Korea,

United Kingdom, India and Austria.

24

United States of America

31%

Canada13%

Sweden7%

Finland7%

Japan6%

Indonesia3%

China3%

Others30%

Major World Producers of Woodpulp over the period 2002-2009

(a)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

ne

Year

Woodpulp production by Major Producer in the period 2002-2009

Others

China

Indonesia

Japan

Finland

Sweden

Canada


(b)

Canada24%


14%

Sweden8%

Indonesia6%

Finland5%

Belgium2%

Portugal2%

Spain2%

Others37%

Major World Exporters of Woodpulp over the period 2002-2009

(c)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

nes

Year

Woodpulp export by Major Exporter in the period 2002-2009

Others

Spain

Portugal

Belgium

Finland

Indonesia

Sweden

United States of AmericaCanada

(d)

China19%


13%

Germany11%

Italy7%Korea, Repu

blic of5%

Japan5%

France5%

Others35%

Major World Importers of Woodpulp over the period 2002-2009

(e)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

nes

Year

Woodpulp import by Major Importer in the period 2002-2009

Others

France

Japan

Korea, Republic ofItaly

Germany

United States of AmericaChina

(f)

Figure 5. Woodpulp production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

25

Table 10. Apparent consumption and net export of woodpulp in major consumer countries, 2002-2009

Amount % Cum.% annual 2002-2009United States of America 54.5 54.0 54.9 55.1 54.0 55.6 51.5 45.5 425.1 31% 31% -3% -17% -0.9 -0.8 -0.5 -0.3 -0.3 0.0 1.4 2.2China 10.2 10.9 12.1 12.5 14.4 15.6 17.4 17.4 110.6 8% 39% 8% 71% -6.1 -6.9 -8.1 -8.4 -8.7 -9.2 -10.3 -10.3Canada 13.9 15.2 15.2 15.1 13.0 12.6 11.1 10.3 106.5 8% 46% -4% -26% 11.8 11.0 11.2 10.3 10.6 9.9 9.3 6.9Japan 13.0 12.8 13.0 12.9 13.0 12.7 12.5 10.4 100.3 7% 54% -3% -20% -2.4 -2.2 -2.3 -2.1 -2.1 -1.8 -1.8 -1.8Finland 9.8 9.7 10.5 9.4 10.7 10.7 9.8 8.1 78.7 6% 59% -3% -17% 2.0 2.2 2.1 1.8 2.4 2.1 1.8 1.1Sweden 8.4 8.7 9.0 9.0 9.5 9.5 9.2 8.6 71.9 5% 64% 0% 3% 3.0 3.0 3.1 3.1 2.9 3.1 3.1 3.0Germany 6.1 6.5 6.7 6.9 7.2 7.3 7.0 6.4 54.1 4% 68% 1% 6% -3.9 -4.1 -4.2 -4.0 -4.2 -4.3 -4.1 -3.5France 4.1 4.0 4.1 4.2 4.1 3.7 3.6 3.5 31.4 2% 71% -2% -16% -1.7 -1.6 -1.6 -1.7 -1.7 -1.5 -1.4 -1.2Italy 3.7 3.7 3.8 4.2 4.2 3.9 3.7 3.3 30.6 2% 73% -1% -9% -3.2 -3.2 -3.4 -3.7 -3.7 -3.4 -3.2 -3.0Indonesia 4.1 3.8 4.7 3.9 1.6 3.6 3.6 3.6 28.9 2% 75% -2% -11% 1.4 1.6 0.8 1.6 1.9 1.6 1.6 1.6Korea, Republic of 3.1 3.0 3.1 3.0 2.9 3.0 3.0 2.9 24.0 2% 77% -1% -4% -2.5 -2.5 -2.6 -2.5 -2.4 -2.6 -2.5 -2.5India 1.9 2.1 2.6 2.8 2.9 2.8 2.8 2.8 20.7 1% 78% 6% 48% -0.3 -0.3 -0.5 -0.5 -0.6 -0.5 -0.5 -0.5Austria 2.0 2.1 2.3 2.4 2.4 2.4 2.4 2.1 18.2 1% 79% 1% 6% -0.3 -0.3 -0.4 -0.4 -0.5 -0.4 -0.4 -0.3Spain 1.8 1.8 1.9 2.0 2.0 1.9 2.1 2.1 15.5 1% 81% 2% 15% -0.1 0.1 0.1 0.1 0.1 0.2 -0.1 0.0United Kingdom 2.1 2.0 1.9 2.0 1.7 1.6 1.5 1.6 14.4 1% 82% -3% -21% -1.6 -1.5 -1.6 -1.6 -1.4 -1.4 -1.3 -1.4Australia 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.6 12.2 1% 82% 0% -3% -0.3 -0.3 -0.4 -0.4 -0.3 -0.3 -0.3 -0.3Others 27.8 29.4 28.4 28.2 30.6 32.2 34.2 32.0 242.9 18% 100% 2% 15%

European Union 44.2 44.9 46.9 47.0 47.6 47.1 45.5 41.4 364.6 26% -1% -6% -6.8 -6.3 -6.9 -8.0 -6.1 -5.7 -5.7 -5.1World Production 167.9 171.3 175.9 175.1 175.7 180.7 177.1 162.3 1386.2 100% 0% -3%

2004 2005 2006 2007 2008 20092008 2009 2002-2009 Change (%) 2002 2003Major ConsumersApparent consumption (million tones) Net Export = Export - Import (million tones)

2002 2003 2004 2005 2006 2007

Source: FAO (2010)

26

2.6. Paper and Paperboard

During the period 2002-2009, world’s paper and paperboard production

increased from 331.26 millions ton in year 2002 to 372.91 millions ton in year

2009, a 13% increase (Table 11). Table 4 also shows world’s paper and

paperboard export quantity, import quantity, and price increased by 10%, 9%,

and 35% over the period 2002-2009, respectively.

Table 11. World production, imports, and exports of paper and paperboard in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 331.26 340.34 355.19 364.23 378.70 387.20 389.00 372.91 13% 2%Imports Quantity Million M3 96.92 103.23 109.51 111.88 113.44 119.05 114.71 105.56 9% 1%Imports Value US$ Million 67.10 76.83 85.12 88.29 92.85 104.96 111.74 97.88 46% 6%Exports Quantity Million M3 97.01 102.65 111.18 113.10 114.91 118.38 115.34 106.50 10% 1%Exports Value US$ Million 64.42 74.39 84.44 88.27 94.44 103.96 111.39 95.81 49% 6%Price US$/M3 678 735 768 785 820 880 970 913 35% 4%

Growth (%)YearUnitItem

Source: FAO (2010)

Major world’s producers were United States of America (USA), China, Japan,

Germany, Canada, Finland and Sweden, which together accounted for 64% of

world’s production (Figure 6a). The production increase was mostly in China

followed by Germany, Finland, and Sweden. In United States of America (USA),

Canada, and Japan production significantly decreased (Figure 6b).

Major world’s exporters were Canada, Germany, Finland, Sweden, United

States of America (USA), France, and Austria, which together accounted for 60%

of world’s export (Figure 6c). The export increase has occurred mainly in

United States of America (USA), Germany, and Sweden, while export decreased

in Canada, Finland and French (Figure 6d).


America (USA), Germany, United Kingdom, China, French, Italy, and Spain,

which together accounted for 50% of world’s import (Figure 6e). The import

decreased in all major world’s importers, except in Spain (Figure 6f).

Although United States of America (USA), China and Germany were among

three of the largest world’s producers, which together accounted for 45% of

world’s production, they were also importers, which together accounted for

30% of world’s import.

27

During the period 2002-2009, world’s paper and paperboard consumption

significantly increased from 31.341.5 million tones in year 2002 to 372.9

million tones in year 2009, a 13% increase (Table 12). Over this period, about

2,287.8 million tones of paper and paperboard were consumed by only 16

countries, which accounted for 78% of world’s paper and paperboard

consumption. Three largest consumers were United States of America, China

and Japan, which together accounted for 50% of world’s paper and

paperboard consumption. Other important consumers were Germany, United

Kingdom, Italy, French, the Republic of Korea, Spain, Canada and India.

Consumption grew fastest in India (91%) followed by Malaysia (82%), China

(75%), and Poland (59%). These countries were also net importers. Although

consumptions in United States of America (USA), Japan, Italy and Netherlands

were declined, these countries were net importers.

28


22%

China17%

Japan8%Germany

6%Canada

5%

Finland3%

Sweden3%

Others36%

Major World Producers of Paper and Paperboardover the period 2002-2009

(a)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

nes

Year

Paper and Paperboard production by Major Producer in the period 2002-2009

Others

Sweden

Finland

Canada

Germany

Japan

China


(b)

Canada12%

Germany11%

Finland11%

Sweden9%


9%

France4%

Austria4%

Others40%

Major World Exporters of Paper and Paperboardover the period 2002-2009

(c)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

nes

Year

Paper and Paperboard export by Major Exporter in the period 2002-2009

Others

Austria

France

United States of AmericaSweden

Finland

Germany

Canada

(d)


14%Germany

9%

United Kingdom

7%

China7%

France5%Italy

4%

Spain4%

Others50%

Major World Importers of Paper and Paperboardover the period 2002-2009

(e)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2002 2003 2004 2005 2006 2007 2008 2009

Mill

ions

Ton

nes

Year

Paper and Paperboard import by Major Importer in the period 2002-2009

Others

Spain

Italy

France

China

United Kingdom

Germany


(f)

Figure 6. Paper and paperboard production, export, and import and their trends by major world producers, exporters, and importers in the period 2002-2009

29

Table 12. Apparent consumption and net export of paper and paperboard in major consumer countries, 2002-2009

Amount % Cum.% annual 2002-2009United States of America 89.6 89.0 90.6 90.8 91.2 87.9 81.9 71.3 692.3 24% 24% -3% -20% -7.7 -8.3 -8.5 -7.1 -6.9 -4.0 -1.7 0.8China 48.0 53.2 59.7 64.4 71.2 78.0 84.2 84.2 543.0 19% 42% 8% 75% -6.0 -5.8 -5.6 -4.0 -1.8 0.0 -0.5 -0.5Japan 31.6 31.6 29.8 29.9 30.0 29.2 28.3 26.2 236.5 8% 50% -3% -17% -0.9 -1.1 -0.6 -0.6 -0.5 -0.3 0.1 0.1Germany 18.2 18.8 19.3 19.7 21.4 20.9 20.7 20.1 159.1 5% 56% 1% 10% 0.3 0.5 1.1 2.0 1.3 2.4 2.1 2.7United Kingdom 12.2 12.2 12.4 12.7 12.2 12.1 11.4 11.1 96.4 3% 59% -1% -9% -5.7 -5.8 -6.0 -6.5 -6.7 -6.9 -6.4 -6.2Italy 11.6 11.8 11.9 11.6 11.7 11.9 11.1 9.9 91.6 3% 62% -2% -15% -2.3 -2.3 -2.2 -1.6 -1.7 -1.8 -1.6 -1.4France 11.0 10.9 11.0 10.8 11.0 11.1 10.6 10.5 87.0 3% 65% -1% -4% -1.2 -1.0 -0.8 -0.5 -0.9 -1.3 -1.2 -1.1Korea, Republic of 8.2 8.2 8.2 7.8 8.3 8.7 8.8 8.6 66.9 2% 68% 1% 5% 1.6 1.9 2.3 2.5 2.4 2.2 1.9 1.9Spain 7.0 7.2 7.3 7.2 9.0 9.9 8.2 7.6 63.4 2% 70% 1% 10% -1.6 -1.8 -1.8 -1.5 -2.1 -3.1 -1.1 -1.0Canada 7.7 7.6 8.0 7.8 6.9 8.3 7.1 6.0 59.3 2% 72% -4% -22% 12.4 12.4 12.4 11.7 11.3 9.1 8.6 6.9India 4.7 4.7 5.2 5.1 5.3 5.3 5.5 9.0 44.7 2% 73% 10% 91% -0.6 -0.6 -0.8 -0.9 -1.1 -1.1 -1.4 -1.4Indonesia 4.9 5.2 5.1 4.6 4.0 4.4 4.6 4.6 37.4 1% 75% -1% -6% 2.1 1.8 2.1 2.6 3.2 3.3 3.2 3.2Australia 3.3 3.8 3.9 4.1 4.0 4.0 3.3 3.3 29.7 1% 76% 0% 0% -0.7 -0.7 -0.8 -0.9 -0.7 -0.8 -0.8 -0.8Poland 2.7 2.9 3.3 3.5 4.0 4.3 4.4 4.3 29.3 1% 77% 7% 59% -0.4 -0.4 -0.7 -0.8 -1.1 -1.3 -1.3 -1.0Netherlands 3.8 3.6 3.6 3.7 3.6 3.6 4.0 3.4 29.3 1% 78% -2% -10% -0.5 -0.2 -0.1 -0.2 -0.2 -0.4 -1.0 -0.8Malaysia 1.8 2.1 2.7 2.9 3.3 3.0 2.8 3.3 21.9 1% 78% 9% 82% -1.0 -1.2 -1.7 -2.0 -2.2 -2.0 -1.7 -1.7Others 65.0 67.6 73.1 77.5 81.8 84.6 92.0 89.5 631.0 22% 100% 5% 38%


2007 2008 20092004 2005 20062005 2006 2007 2008 2009 2002-2009Major ConsumersApparent consumption (million tones) Net Export = Export - Import (million tones)

2002 2003 2004 Change (%) 2002 2003

Source: FAO (2010)

Indonesia forest product production,imports, exports, and consumptions

3

32

3.1. Plywood MOF (2008a, 2008b, 2009b and 2009a) reported that during the period 2003-

2008, Indonesia’s plywood production sharply decreased from 4.28 millions

m3 in year 2003 to 2.35 millions m3 in year 2008, a 45% decrease (Table 13).

This was mainly caused by a huge timber deficit, which downsized Indonesia

plywood industry capacity utilization. The Indonesian Panel Wood Producers

Association (APKINDO) had a recorded membership of 130 companies on 6

October 2006, but only 68 companies were active. Of which only 19 units

were producing at normal capacity.

Table 13 also shows plywood export was also drastically decreased during the

period 2003-2008 from 3.31 millions m3 in year 2003 to 1.67 millions m3 in

year 2008, a 50% decrease. On the other hand, in terms of value, plywood

export value was only decreased by 8%, indicating an increase in Indonesia’s

plywood export price. Meanwhile, despite a sharp increase of import quantity

of more than 45 times, plywood consumption decreased from 0.97 million m3

in year 2003 to 0.73 million m3 in year 2008, a 25% decrease.

Table 13. Production, imports, and exports of Indonesia plywood in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton 4.28 3.16 3.17 2.67 2.42 2.35 -45% -11%Imports Quantity Million ton 0.00 0.01 0.02 0.06 0.05 0.05 4471% 115%Imports Value US$ Million 0.98 3.72 8.87 23.53 23.77 28.03 2768% 96%Import s Price US$/ton 842.30 567.12 427.04 401.39 436.37 528.53 -37% -9%Exports Quantity Million ton 3.31 2.60 2.21 1.98 1.60 1.67 -50% -13%Exports Value US$ Million 1,662.91 1,576.87 1,374.67 1,506.68 1,402.02 1,533.46 -8% -2%Exports Price US$/ton 502.93 605.78 620.68 761.29 876.37 919.15 83% 13%Consumption Million ton 0.97 0.56 0.98 0.75 0.87 0.73 -25% -6%


Sources: MOF (2008a, 2008b, 2009a and 2009b)

33

FAO (2010) also reported that Indonesia’s plywood production sharply

decreased during the period 2002-2009. That is from 7.55 millions m3 in year

2002 to 3.35 millions m3 in year 2009, a 56% decrease (Table 14).

Moreover, plywood export was also sharply decreased during the period 2002-

2009. On the other hand, in terms of value, plywood export value was only

decreased by 12%, indicating a sharply increase in Indonesia’s plywood

export price. These FAO’s production and export figures were much higher

than those production figures reported by MOF (2008a, 2008b, 2009b and

2009a).

Table 14. Production, imports, and exports of Indonesia plywood in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 7.55 6.11 4.51 4.53 3.81 3.45 3.35 3.35 -56% -11%Imports Quantity Million M3 0.00 0.00 0.01 0.03 0.09 0.11 0.08 0.08 1626% 50%Imports Value US$ Million 1.54 0.93 3.72 20.77 23.53 32.38 28.03 28.03 1726% 51%Imports Price US$/M3 324.32 535.55 368.67 652.08 257.19 282.76 343.12 343.12 6% 1%Exports Quantity Million M3 5.83 5.09 4.00 3.41 3.09 2.77 2.57 2.57 -56% -11%Exports Value US$ Million 1748.31 1662.91 1576.90 1374.67 1506.68 1543.78 1533.46 1533.46 -12% -2%Exports Price US$/M3 300.09 326.58 393.77 403.60 488.07 557.56 596.86 596.86 99% 10%Consumption Million M3 1.73 1.02 0.52 1.16 0.82 0.80 0.87 0.87 -50% -9%


Source: FAO (2010)

MOF (2008b and 2009b) reported over the period 2003-2008, major importer

countries were Japan, United States of America, China, The Republic of Korea

and Taiwan, which together accounted for 68% of Indonesia’s plywood

exports (Figure 7). Total exports to all European countries were about 8%.

Moreover, during that period Indonesia’s plywood exports to those countries

were also declining.

Japan38%

United States8%China

8%

Korea, Republic of7%

Taiwan, Province of China

7%

Europe8%

Other Countries24%

Major importers of Indonesia's plywood over the period 2003-2008

Figure 7. Major importers of Indonesia's plywood

over the period 2003-2008

34

3.2. Veneer sheets

Over the period 2003-2008, MOF (2008a and 2009a) reported that

Indonesia’s veneer sheets production significantly increased from 0.20

millions m3 in year 2003 to 0.30 millions m3 in year 2008, a 48% increase

(Table 15). Most veneer sheets production were consumed domestically as

indicated by a consumption increase of 51% over that period.

Table 15 also shows import quantity increased by 191% during the period

2003-2008, but import value only increased by 125%, indicating a decrease in

Indonesia’s veneer sheet import price. Meanwhile, veneer sheet export

quantity increased by 113% during that period, but veneer sheet export value

increased by 923%, indicating an increase in Indonesia’s veneer sheet export

price.

Although import veneer sheets price as well as plywood production decreased,

veneer sheet exports were doubled over that period. Given that veneer sheets

price were much higher than plywood price (Compare Table 15 with Table 13),

this indicated that it would have still been more profitable to sell veneer sheets

than to process it into plywood and then sold it.

Table 15. Production, imports, and exports of Indonesia veneer sheets in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton 0.20 0.11 0.71 0.18 0.21 0.30 48% 8%Imports Quantity Million ton 0.01 0.01 0.01 0.02 0.01 0.02 191% 24%Imports Value US$ Million 14.24 19.33 19.59 25.52 7.42 31.99 125% 18%Import s Price US$/ton 1,954.13 1,987.34 1,921.96 1,496.08 979.88 1,510.08 -23% -5%Exports Quantity Million ton 0.01 0.06 0.00 0.01 0.00 0.01 113% 16%Exports Value US$ Million 2.94 33.10 9.32 19.95 6.48 30.11 923% 59%Exports Price US$/ton 544.94 601.16 2,339.86 2,518.93 2,068.58 2,611.09 379% 37%Consumption Million ton 0.20 0.06 0.71 0.19 0.21 0.31 51% 9%



Meanwhile, over the period 2002-2009, FAO (2010) reported that

Indonesia’s veneer sheets production drastically increased from 0.05 millions

m3 in year 2002 to 0.43 millions m3 in year 2009 (Table 16). Most veneer

sheets production were consumed domestically as indicated by a consumption

increase of more than seven times over that period.

35

Table 16 also shows import quantity increased almost three times during the

period 2002-2006, but import value only increased by 1.33 times, indicating a

decrease in Indonesia’s veneer sheet import price. Meanwhile, veneer sheet

export quantity increased by 1036% during that period, but veneer sheet

export value increased by 1724%, indicating an increase in Indonesia’s veneer

sheet export price. As in plywood product, these FAO’s veneer sheets

production and export figures were much higher than those production figures

reported by MOF (2008a, 2008b, 2009b and 2009a).

Table 16. Production, imports, and exports of Indonesia veneer sheets in 2002- 2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 0.05 0.29 0.16 1.01 0.26 0.30 0.43 0.43 849% 38%Imports Quantity Million M3 0.01 0.01 0.01 0.01 0.02 0.03 0.03 0.03 276% 21%Imports Value US$ Million 13.73 14.23 19.33 19.59 25.52 27.76 31.99 31.99 133% 13%Imports Price US$/M3 1830.13 1469.89 1400.00 1440.37 1104.85 1028.19 1134.47 1134.47 -38% -7%Exports Quantity Million M3 0.00 0.01 0.07 0.05 0.03 0.05 0.05 0.05 1036% 42%Exports Value US$ Million 1.65 2.94 33.05 30.41 19.95 29.98 30.11 30.11 1724% 51%Exports Price US$/M3 375.23 408.78 450.19 642.86 600.96 599.60 602.24 602.24 61% 7%Consumption Million M3 0.05 0.29 0.10 0.98 0.25 0.28 0.41 0.41 742% 36%


Source: FAO (2010)


countries were Japan, United States of America, China, The Republic of Korea

and Taiwan, which together accounted for 67% of Indonesia’s veneer sheet

exports (Figure 8). During that period exports to those major importer

countries increased, except to Taiwan. Total exports to all European countries

were about 19% and were also increased during that period.

Japan35%

United States15%China

8%



3%

Europe19%

Other Countries14%

Major importers of Indonesia's veneer sheets over the period 2003-2008

Figure 8. Major importers of Indonesia's veneer sheets

over the period 2003-2008

36

3.3. Particleboard Table 17 shows during the period 2003-2008 Indonesia’s particleboard

production sharply decreased from 0.07 millions m3 in year 2003 to 0.03

millions m3 in year 2006 (MOF 2008a). Particleboard export was even

decreased more sharply during that period, from 0.13 million m3 in ear 2003

to 0.01 million m3 in year 2007 (MOF 2008b). On the other hand,

particleboard import was increased by more than nineteen times over that

period. Furthermore, Indonesia import price were decreased by 20%, whereas

export prices increased by 32%. Table 17. Production, imports, and exports of Indonesia particleboard in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton 0.07 0.17 0.09 0.03 NA NAImports Quantity Million ton 0.01 0.02 0.04 0.08 0.15 0.23 1934% 83%Imports Value US$ Million 3.91 8.28 10.46 20.62 35.41 63.97 1536% 75%Import s Price US$/ton 344.71 335.16 268.01 244.25 233.61 277.28 -20% -4%Exports Quantity Million ton 0.13 0.05 0.03 0.01 0.01 0.00 -97% -49%Exports Value US$ Million 25.84 11.63 5.38 4.62 2.43 1.14 -96% -46%Exports Price US$/ton 203.97 241.63 178.16 395.79 431.99 268.84 32% 6%Consumption Million ton

Year Growth (%)Item Unit


Meanwhile, during the period 2002-2009, FAO (2010) reported that

Indonesia’s particleboard production sharply decreased from 0.30 millions

m3 in year 2002 to 0.13 millions m3 in year 2009, a 58% decrease (Table 18).

Particleboard export was even decreased more sharply during that period, from

0.17 million m3 in ear 2002 to 0.01 million m3 in year 2009. Given that

consumption was increased by more than two times, particleboard import was

then almost double over that period. Furthermore, Indonesia import price was

decreased by 7%, while export price was increased by 24%.

Table 18. Production, imports, and exports of Indonesia particleboard in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 0.30 0.30 0.30 0.13 0.13 0.13 0.13 0.13 -58% -12%Imports Quantity Million M3 0.02 0.02 0.04 0.06 0.13 0.23 0.36 0.36 1627% 50%Imports Value US$ Million 3.96 3.91 8.28 10.46 20.62 35.41 63.97 63.97 1514% 49%Imports Price US$/M3 192.65 224.05 217.84 174.32 158.64 151.70 180.05 180.05 -7% -1%Exports Quantity Million M3 0.17 0.19 0.09 0.05 0.05 0.01 0.01 0.01 -96% -37%Exports Value US$ Million 24.12 25.84 11.63 5.38 10.92 2.43 1.14 1.14 -95% -35%Exports Price US$/M3 141.23 133.29 134.17 116.48 226.46 282.09 175.38 175.38 24% 3%Consumption Million M3 0.15 0.12 0.25 0.14 0.21 0.35 0.47 0.47 223% 18%


Source: FAO (2010)

37


countries were The Republic of Korea, Taiwan, Viet Nam, Hongkong and China,

which together accounted for 90% of Indonesia’s particleboard exports

(Figure 9). Moreover, during that period Indonesia’s particleboard exports to

those countries were also declining sharply.


Taiwan, Province of China18%

Viet Nam17%

Hongkong16%

China11%

Europe0%

Other Countries10%

Major importers of Indonesia's particleboard export over the period 2003-2008

Figure 9. Major importers of Indonesia's particleboard over the period 2003-2008

3.4. Fiberboard During the period 2003-2008, Ministry of Forestry of the Republic of Indonesia

did not report Indonesia’s fiberboard production, but it did report exports and

imports of fiberboard as shown in Table 19. Table 19 shows that in the year

2003, export quantities were much higher than import quantities, but in the

year 2008 it only less than twice. This was due to export growth that was

much slower that import growth over the period 2003-2008.

Table 19. Production, imports, and exports of Indonesia fiberboard in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton NA NA NA NA NA NAImports Quantity Million ton 0.03 0.05 0.06 0.06 0.06 0.10 219% 26%Imports Value US$ Million 10.20 17.30 20.32 20.79 23.61 43.55 327% 34%Import s Price US$/ton 317.75 324.09 313.78 328.92 377.73 426.05 34% 6%Exports Quantity Million ton 0.17 0.20 0.23 0.20 0.21 0.18 5% 1%Exports Value US$ Million 34.55 47.22 55.09 49.35 70.80 56.14 62% 10%Exports Price US$/ton 202.22 235.30 234.65 240.80 329.46 311.86 54% 9%Consumption Million ton



38

Meanwhile, during the period 2002-2009, FAO (2010) reported that

Indonesia’s fiberboard production was relatively unchanged (Table 20).

Coupled with import quantity that was more than doubled over that period,

Indonesia fiberboard export quantity was increased by 185%. However, export

value increased only by only 117%, indicating a decrease in Indonesia

fiberboard export prices.

Table 20. Production, imports, and exports of Indonesia fiberboard in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 0.43 0.43 0.43 0.43 0.43 0.43 0.43 0.43 0% 0%Imports Quantity Million M3 0.08 0.05 0.11 0.13 0.04 0.11 0.19 0.19 146% 14%Imports Value US$ Million 12.95 10.20 17.54 20.57 9.02 24.79 44.74 44.74 246% 19%Imports Price US$/M3 166.66 188.23 161.21 163.73 205.48 219.56 234.19 234.19 41% 5%Exports Quantity Million M3 0.25 0.22 0.36 0.43 0.44 0.72 0.70 0.70 185% 16%Exports Value US$ Million 44.14 34.87 50.82 61.23 58.55 110.60 95.95 95.95 117% 12%Exports Price US$/M3 178.51 160.90 140.45 142.91 133.70 152.91 136.38 136.38 -24% -4%Consumption Million M3 0.26 0.26 0.17 0.12 0.03 -87% -40%


Source: FAO (2010)


countries were China, Saudi Arabia, the Republic of Korea, Taiwan and Syria

Arab Republic, which together accounted for 63% of Indonesia’s fiberboard

exports (Figure 10). Moreover, during that period Indonesia’s fiberboard

exports to all those major importer countries decreased, except to Syria Arab

Republic.

China27%

Saudi Arabia14%

Korea, Republic of9%Taiwan, Province of

China6%

Syria Arab Republic7%

Europe0%

Other Countries37%

Major importers of Indonesia's fiberboard over the period 2003-2008

Figure 10. Major importers of Indonesia's fiberboard over the period 2003-2008

39

3.5. Woodpulp MOF (2008a, 2008b, 2009b and 2009a) reported that during the period 2003-

2008, Indonesia’s woodpulp production slightly increased from 4.66 millions

ton in year 2003 to 4.78 millions ton in year 2008, a 3% increase (Table 21).

Table 21 also shows woodpulp export was increased during the period 2003-

2008 from 2.37 millions ton in year 2003 to 2.62 millions ton in year 2008, a

10% increase. However, Indonesia’s woodpulp import increased by 58%,

which indicated an increase in consumption of 10%. Moreover, in terms of

prices, Indonesia’s woodpulp export price was increased by 63%, while import

price was increased by 68% during that period.

Table 21. Production, imports, and exports of Indonesia woodpulp in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton 4.66 2.59 0.99 3.37 4.88 4.78 3% 1%Imports Quantity Million ton 0.73 0.89 0.88 0.92 0.86 1.16 58% 10%Imports Value US$ Million 355.00 505.03 490.07 536.08 594.84 944.05 166% 22%Import s Price US$/ton 484.68 568.81 555.77 584.62 693.24 816.44 68% 11%Exports Quantity Million ton 2.37 1.68 2.55 2.81 2.44 2.62 10% 2%Exports Value US$ Million 790.51 588.51 932.52 1,123.62 1,065.41 1,422.45 80% 12%Exports Price US$/ton 332.89 350.96 365.29 399.52 437.13 543.80 63% 10%Consumption Million ton 3.02 1.80 -0.68 1.48 3.30 3.33 10% 2%



On the contrary, FAO (2010) reported that Indonesia’s woodpulp production

and consumption were, respectively, decreased by 6% and 11% during the

period 2002-2009 (Table 22). Meanwhile, during that period wood pulp

export quantity and value was sharply increased by 22% and 114%,

respectively; indicating a sharply increase in Indonesia’s woodpulp export

price. Further, FAO’s production and consumption figures were higher than

those reported by MOF, but export and import figures were almost the same.

Table 22. Production, imports, and exports of Indonesia woodpulp in 2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 5.48 5.48 5.48 5.48 3.58 5.18 5.18 5.18 -6% -1%Imports Quantity Million M3 0.81 0.73 0.89 0.90 0.91 0.86 1.16 1.16 42% 5%Imports Value US$ Million 365.32 354.03 505.03 505.93 535.67 594.84 944.05 944.05 158% 15%Imports Price US$/M3 448.94 485.78 568.81 560.58 586.22 693.21 816.44 816.44 82% 9%Exports Quantity Million M3 2.25 2.38 1.68 2.49 2.86 2.44 2.73 2.73 22% 3%Exports Value US$ Million 706.71 790.73 589.71 905.26 1156.08 1065.92 1515.41 1515.41 114% 12%Exports Price US$/M3 314.77 332.93 351.57 363.07 404.03 437.12 554.57 554.57 76% 8%Consumption Million M3 4.05 3.84 4.69 3.89 1.63 3.60 3.60 3.60 -11% -2%

Year Growth (%)Item Unit

Source: FAO (2010)

40


countries were China, The Republic of Korea, Japan, India, and Taiwan, which

together accounted for 83% of Indonesia’s wood pulp exports (Figure 11).

Total exports to all European countries were about 11%. Moreover, during

that period Indonesia’s woodpulp exports to those countries were increased,

except to Taiwan and Europe.

China46%


Japan6%

India5%


4%

Europe11%

Other Countries6%

Major importers of Indonesia's woodpulp export over the period 2003-2008

Figure 11. Major importers of Indonesia's woodpulp over the period 2003-2008

3.6. Paper and paperboard

During the period 2003-2008, MOF (2008a, 2008b, 2009b and 2009a)

reported that paper and paperboard export and import quantities were

increased by 84% and 94%, respectively (Table 23). In terms of value, paper

and paperboard export and import values were respectively increased by 182%

and 127%, indicating an increase in Indonesia’s paper and paperboard export

and import prices. However, MOF did not report Indonesia’s paper and

paperboard production.

41

Table 23. Production, imports, and exports of Indonesia paper and paperboard in 2003-2008

2003 2004 2005 2006 2007 2008 Periodic AnnualProduction Quantity Million ton NA NA NA NA NA NAImports Quantity Million ton 0.23 0.34 0.32 0.32 0.37 0.44 94% 14%Imports Value US$ Million 229.16 329.25 358.72 360.74 403.12 520.76 127% 18%Import s Price US$/ton 1,006.52 982.25 1,105.19 1,130.01 1,103.92 1,181.77 17% 3%Exports Quantity Million ton 2.04 2.45 2.86 3.49 3.81 3.75 84% 13%Exports Value US$ Million 1,185.16 1,626.00 1,964.94 2,482.90 298.75 3,339.39 182% 23%Exports Price US$/ton 580.56 663.68 687.00 711.88 78.49 890.10 53% 9%Consumption Million ton



Meanwhile, FAO (2010) reported that Indonesia’s paper and paperboard

production significantly increased during the period 2002-2009. That is from

7.00 million tones in year 2002 to 7.78 million tones in year 2009, an 11%

increase (Table 24). Paper and paperboard export and import quantities were

also increased by 51% and 54% during that period 2002-2009, respectively.

But, increase in their values was more than two times, which led to a sharply

increase in export and import prices. These FAO’s export and import quantity

figures were not too different with those figures reported by MOF (2008a,

2008b, 2009b and 2009a).

Table 24. Production, imports, and exports of Indonesia paper and paperboard in

2002-2009

2002 2003 2004 2005 2006 2007 2008 2009 Periodic AnnualProduction Quantity Million M3 7.00 7.04 7.22 7.22 7.22 7.73 7.78 7.78 11% 2%Imports Quantity Million M3 0.26 0.23 0.35 0.35 0.33 0.35 0.40 0.40 54% 6%Imports Value US$ Million 238.93 228.73 355.47 367.38 369.92 392.99 496.64 496.64 108% 11%Imports Price US$/M3 921.45 1003.91 1027.77 1055.70 1132.48 1138.54 1240.06 1240.06 35% 4%Exports Quantity Million M3 2.37 2.06 2.48 2.97 3.50 3.67 3.57 3.57 51% 6%Exports Value US$ Million 1271.96 1203.36 1650.11 2093.04 2532.16 2912.53 3232.95 3232.95 154% 14%Exports Price US$/M3 537.80 583.52 665.40 705.40 722.49 794.62 904.55 904.55 68% 8%Consumption Million M3 4.89 5.21 5.09 4.60 4.04 4.41 4.60 4.60 -6% -1%


Source: FAO (2010)


countries were China, Malaysia, Japan, Australia, Hongkong and United States

of America, which together accounted for 48% of Indonesia’s paper and

paperboard exports (Figure 12). Total exports to all European countries were

about 4%. Moreover, during that period Indonesia’s paper and paperboard

exports to those major importer countries as well as to European countries

were significantly increased, except to China and Hongkong.

42

China10% Malaysia

10%

Japan9%

Australia5%

Hongkong5%

United States5%

Europe4%

Other Countries52%

Major importers of Indonesia's paper and paperboard over the period 2003-2008

Figure 12. Major importers of Indonesia's paper and paperboard over the period 2003-2008

Shares of forest imports from Indonesia to total imports as reported by mayor importer countries

4

46

DUE to the lack of trade data reported by major importer countries, the review

was based on available forest trade data reported by FAO (2010) and by MOF

(2008a, 2008b, 2009b and 2009a) over the period 2002-2008. The results

are shown in Tables 25-30.

4.1. Plywood As explained, in order of importance, major country destinations of

Indonesia’s plywood exports were Japan, United States, China, the Republic of

Korea, Taiwan, Saudi Arabia, United Arab Emirates, United Kingdom, and

Belgium, which together accounted for 81% of Indonesia’s plywood exports

(Table 25). Table 25. Shares of plywood imports from Indonesia to total imports as reported by

major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageJapan 39% Japan 27%United States 8% United States 8%China 8% China 33%Korea, Republic of 7% Korea, Republic of 25%Taiwan, Province of China 6%Saudi Arabia 5% Saudi Arabia 60%United Arab Emirates 4% United Arab Emirates 32%United Kingdom 2% United Kingdom 11%Belgium 2% Belgium 19%Other countries 19%

Total 100.0%

Plywood export reported by MOF Plywood import share in RC

Sources: MOF (2008a, 2008b, 2009b and 2009a) and FAO (2010)

47

In Japan, China, the Republic of Korea, and United Arab Emirates, plywood

import from Indonesia’s ranged from 27% to 33% of their total plywood

imports. In Saudi Arabia, it was almost 60% of its total plywood imports.

Although China has been the largest plywood producer in the world since 2003

as well as a net exporter, its plywood import was still large, ranging from 1.3 to

1.8 millions m3 per year. Meanwhile, even though, consumption in United

States of America, Japan, United Kingdom and the Republic of Korea were

decreased, but these countries were net and major world importers, which

together accounted for 49% of world’s plywood imports. Hence, it is obvious

these five countries (China, United States of America, Japan, United Kingdom

and the Republic of Korea) would still be the future market for Indonesia’s

plywood exports.

4.2. Veneer sheets

MOF (2008a, 2008b, 2009b and 2009a) reported over the period 2002-2008,

in order of importance, major country destinations of Indonesia’s veneer

sheets exports were Japan, United States, China, the Republic of Korea, Taiwan,

Germany, Saudi Arabia, Italy, and United Kingdom, which together accounted

for 80.9% of Indonesia’s veneer sheets exports (Table 26). However, In

United States, the Republic of Korea, and Italy, veneer sheets import from

Indonesia’s was much less than 1% of their total veneer sheets imports. In

Germany and United Kingdom it was around 1% of their total veneer sheets

imports. Meanwhile, in Japan, China and Saudi Arabia, it ranged from 5.1% to

6.8% of their total veneer sheets imports.

48

Table 26. Shares of veneer sheets imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageJapan 34.0% Japan 5.1%United States 14.8% United States << 1%China 8.8% China 5.0%Korea, Republic of 7.1% Korea, Republic of << 1%Taiwan, Province of China 4.8%Germany, Fed. Rep. of 3.4% Germany, Fed. Rep. of 1.1%Saudi Arabia 3.0% Saudi Arabia 6.8%Italy 3.0% Italy << 1%United Kingdom 2.1% United Kingdom 1.3%Other countries 19.1%

Total 100.0%

Veneer export reported by MOF Veneer import share in RC


The fact that most veneer sheets production were consumed domestically over

the period 2002-2008 and considered that veneer sheets export price were

more than double of plywood export price, then, if Indonesia would

domestically process veneer sheets, it should produce high added value forest

products. Otherwise, selling veneer sheets is more profitable than to process it

first into plywood and then sold it.

4.3. Particleboard


in order of importance, major country destinations of Indonesia’s

particleboard exports were the Republic of Korea, Taiwan, Viet Nam, Hongkong,

China, and Malaysia, which together accounted for 97.6% of Indonesia’s

particleboard exports (Table 27). However, in the Republic of Korea, Viet Nam,

China, and Malaysia, particleboard import from Indonesia’s was only ranged

from 2.0% to 10.0% of their total particleboard imports.

49

Table 27. Shares of particleboard imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageKorea, Republic of 26.9% Korea, Republic of 3.0%Taiwan, Province of China 21.8%Viet Nam 16.5% Viet Nam 10.0%Hongkong 16.1%China 10.3% China 2.0%Malaysia 6.0% Malaysia 3.1%Other countries 2.4%

Total 100.0%

Particleboard export reported by MOF Particleboard import share in RC


Although during that period Indonesia’s particleboard exports to those

countries were declining, China and Republic of Korea imports of particleboard

were still large, ranging from 1.2 to 1.9 millions m3 per year. Similar to that

veneer sheets product, most particleboard were consumed domestically over

the period 2002-2008. Coupled with particleboard import that was increased

by more than nineteen times over that period, particleboard production should

be intended for domestic consumption.

4.4. Fiberboard MOF (2008a, 2008b, 2009b and 2009a) reported over the period 2002-2008,

in order of importance, major country destinations of Indonesia’s fiberboard

exports were China, Saudi Arabia, Republic of Korea, Taiwan, Syria Arab

Republic, Egypt, United Arab Emirates, Viet Nam, Philippines, and Hongkong,

which together accounted for 81.3% of Indonesia’s fiberboard exports (Table

28). Fiberboard import from Indonesia’s in the Republic of Korea and Saudi

Arabia were, respectively, 40% and 44% of their total fiberboard imports (Table

28). For the rest countries, it ranged from 3.0% to 8.0% of its total fiberboard

imports.

50

Table 28. Shares of fiberboard imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageChina 26.1% China 8.0%Saudi Arabia 13.6% Saudi Arabia 44.0%Korea, Republic of 12.7% Korea, Republic of 40.0%Taiwan, Province of China 7.2%Syria Arab Republic 6.7% Syria Arab Republic 3.0%Egypt 4.1% Egypt 5.1%United Arab Emirates 3.5% United Arab Emirates 4.4%Viet Nam 3.4% Viet Nam 5.1%Philippines 2.1% Philippines 6.1%Hongkong 2.0%Other countries 18.7%

Total 100.0%

Fiberboard export reported by MOF Fiberboard import share in RC


China and the Republic of Korea would still be potentially become major

country destinations of Indonesia’s fiberboard exports in the future since they

are world’s major consumers and net importers of fiberboard with total

imports ranging from 1.1 to 2.6 millions m3 per year for China and from 0.3 to

0.8 millions m3 per year for the Republic of Korea.

4.5. Woodpulp

As explained, in order of importance, major country destinations of

Indonesia’s woodpulp exports were China, the Republic of Korea, Japan and

India, which together accounted for 79.1% of Indonesia’s woodpulp exports

(Table 29). In Japan, India and the Republic of Korea, woodpulp import from

Indonesia’s was around 27%-30% of their total plywood imports, whereas, in

China, it was around 12%.

51

Table 29. Shares of woodpulp imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageChina 46.5% China 12%Korea, Republic of 21.8% Korea, Republic of 30%Japan 5.9% Japan 27%India 4.9% India 30%Other countries 20.9%

Total 100.0%

Woodpulp export reported by MOF Woodpulp import share in RC


As explained China was the country with the highest growth of woodpulp

consumption. China’s net import of woodpulp increased from 6.1 million

tones in the year 2002 to 10.3 in the year 2009, a 71% increase. This has

affected Indonesia’s trade of woodpulp as indicating by increasing of shares

of woodpulp imports from Indonesia to China’s total woodpulp imports from

8% in the year 2002 to 12% in the year 2008. Further, India, one of countries

with the highest growth of woodpulp consumption (48%), was also an

important consumer with net import of 0.3-0.5 million tones. Meanwhile,

although woodpulp consumptions in Japan and the Republic of Korea were

declined significantly, they were still important consumers in the world with

their total net import of 4-5 million tones. Hence, it is obvious these four

countries (China, the Republic of Korea, Japan and India) would still be the

future market for Indonesia’s woodpulp exports.

4.6. Paper and Paperboard


in order of importance, major country destinations of Indonesia’s paper and

paperboard exports were China, Malaysia, Japan, Australia and United States,

which together accounted for 39.4% of Indonesia’s paper and paperboard

exports (Table 30).

Shares of paper and paperboard import from Indonesia’s to total paper and

paperboard imports of Australia, Japan and Malaysia were, respectively, 28%,

30%, and 36%, whereas, in China and United States, they were 8% and 18%,

respectively.

52

Table 30. Shares of paper and paperboard imports from Indonesia to total imports as reported by major importer countries over the period 2002-2008

Country Destination Percentage Reporting Country (RC) PercentageChina 10.6% China 8%Malaysia 10.5% Malaysia 36%Japan 8.4% Japan 30%Australia 5.3% Australia 28%United States 4.6% United States 18%Other countries 60.6%

Total 100.0%

Paper and Paperboard export reported by MOF Paper and Paperboard import share in RC


Malaysia would be the most important country destination of Indonesia’s

paper and paperboard export in the future since this country has advantages in

transportation cost and was the country with the second fastest consumption

growth in the world (82%). Malaysia’s net import of paper and paperboard

ranged from 1.0 to 2.2 million tones over the period 2002-2009. Meanwhile,

although China is one of countries with the highest growth of consumption of

75% and the second largest consumers of paper and paperboard in the world

(19%), its net import was sharply decreased from 6.0 million tones in the year

2002 to 0.5 million tones in the year 2009. Nevertheless, this country would

still be an important consumer for Indonesia’s paper and paperboard. United

States of America and Japan would also be important consumers since these

countries were net importers and together consumed 32% of world’s paper

and paperboard consumption.

Drivers and principal policies affecting forest products markets

5

56

5.1. Drivers

From demand side, needs for wood composites were driven by population,

economic growth, product application and substitution, price level, and industry

push for innovation and value addition to resources.

Population. Demand of wood composite products is strongly affected by

changes in population (growth or decline), age structures and household

composition. ITTO (2007) stated that in producer countries total population

was increased by almost 600 millions during the period 1987 to 2007.

Population in consumer countries was also increases, though more moderately.

However, Japan, a major importer, was believed to have ceased its population

growth during that period and then declining in its demand would be expected

in coming years.

Economic growth. Since 2000, trends in GDP growth have been similar for all

consumer regions, but Asia clearly showed the greatest volatility, with Europe

and North America tracking each other’s growth within a much narrower

band. ITTO (2007) stated that GDP growth for all ITTO Consumers was grown

in 2006, where Asia was the fastest (4.9%) and followed by North America

(3.4%), non-EU Europe’s (2.7%), and the EU (2.5%). ITTO Producer economies

generally have been growing significantly faster than Consumers ever since

2000, with a spread of 2 percentage points expected to persist at least until the

end of 2007. ITTO Producer Asia continues to show the most robust growth of

all ITTO sub-regions, with Africa running a close second. Latin America has

57

lagged due to relatively slower growth in both Brazil and Mexico. Although

Japan remains in number-one position among all ITTO importers of tropical

plywood, its imports would expectedly decline hereafter as its population has

peaked and its economy has reached a steady state with little or no GDP

growth.

Product application and substitution. Currently, temperate and coniferous

plywood is increasingly substituted for tropical hardwoods, holding down the

latter’s price. This was indicated by a progressive substitution of temperate

and boreal conifers for tropical hardwoods imports of Japan. China, one of

major tropical plywood manufacturers, has broadened tropical export panel

products to include a variety of combinations of some different core (often

China-grown poplar) overlaid with face veneers of tropical woods such as

meranti. As a result, its plywood products are comparatively lighter and

cheaper than Southeast Asian products while their quality has noticeably

improved. Meanwhile, consumption of veneer theoretically not destined for

plywood, presumably in the furniture and other secondary processing

industries of ITTO member countries, had marked a minor decline of 0.6% to

3.51 million m3 in 2006. Moreover, there are clear trends for European

governments and buyers, in good part responding to expressed desires of

producers, to shift their import product mix increasingly away from tropical

hardwood roundwood in favor of sawnwood, panels and further-processed

products manufactured in producing countries.

Price level. The future of tropical plywood consumption in most markets is apt

to be determined mainly by price competition. Consumer country inflation

rates were mostly in a band around 2%, whereas most producer countries held

inflation rates near 5% in the period 2000-2005. Prices for most primary

tropical timber products and species ended 2006 considerably further

strengthened over their already-strong performances during 2005, as supplies

of raw materials tightened, severely in some cases. At the same time most ITTO

consumer country economies were expanding or at least stabilized, steadying

or improving consumer confidence in most markets. Prices for Asian plywood

kept on rising steadily and steeply through 2006, due to basic scarcities of

peeler logs in some case heightened by regulatory policies, strong demands

58

from North American and some European consumers as well as transport

interruptions due to weather and other factors. However, further price rises

were prevented by strong competition from cheaper Chinese combiplywood

and the mounting concern of public opinion-leaders over illegal logging.

Meanwhile, the international markets for tropical veneer remain quite small

and buyers mainly seek decorative sliced veneers. The individual markets for

these very varied sliced veneers are extremely narrow and knowledge of

transactions is closely held. There are no representative benchmark species

whose prices could serve as indicators of overall market trends. Tropical

veneer prices are therefore not regularly covered by the ITTO MIS and are also

not regularly quoted by any other readily available source.

Industry push for innovation and value addition to resources. The highest

degree of conversion at least to primary products is in Latin America. In 2005,

86.7% of logs have been converted locally into sawnwood, 10.8% into plywood,

and 1.9% into veneer sheets. Moreover, this region has been relatively highly

advanced, with about 70% of total exports by value being secondary processed

wood products (SPWP) in 2005. Meanwhile, as roundwood export policies are

tightening, the roundwood exports proportion of log production in Producer

Asia was declined from 8.8% in 1995 to 7.2% in 2005. The SPWP shares were

also increased from about 30% in 1995 to 55% in 2005. Only African

producers still export significant proportions of their log harvests as

roundwood, though there is also progressive cutting back on roundwood

exports in this region: From 40.6% of the log harvest in 1995, to 17.3% in

2005, 16.3% forecast for 2007. Clearly substantial progress has been made in

fostering domestic processing, but evidently there is significant further

potential for capture of value-added by the African economies by intensifying

industrial development efforts. Even more dramatic inter-regional differences

in progress toward higher-value-added products in the timber industries sector,

coupled with higher foreign-exchange earnings from the forest resource, are

seen by comparing the proportional values of primary versus further-processed

wood products exported.

5.2. Principal policies

59

The principal policies affecting forest products markets in the future are forest

law enforcement, governance and trade (FLEGT); the Lacey Act, forest

certification; policies promoting the sound use of wood; research and

development related policies; industry competitiveness and investment policy;

climate change policy; wood energy promotion policy; trade policy and tariff

and non-tariff barriers; and phytosanitary measures.

Forest law enforcement, governance and trade. The most prominent group

of policy issues discussed in international and national forums is forest law

enforcement, governance and trade (FLEGT). This is a regulation to control

imports of illegally-sourced timber from specific countries and will form the

legal basis for the licensing scheme and partnership agreements. However, if it

is restricted only to logs and sawnwood, it would be negligible. To be essential,

this licensing scheme should include all product groups but at the same time

would lead to additional administrative burdens, possibly similar to chain-of-

custody tracking systems in forest certification. The key instruments to achieve

this goal are: (a) the VPA (Voluntary Partnership Agreement) licensing scheme

where under this scheme the European Union countries provide technical

assistance and training to help build an improved TLAS (Timber Legality

Assurance System) and ensure effective means of legality verification in

producer countries, and (b) Due Diligence Regulation (DDR; currently under

consideration) to help curb the laundering of illegal timber, or ‘leakage’, via

third countries. Once implemented, FLEGT-VPA and DDR is expected that will

not only be effective in safeguarding the integrity of direct timber trade, but

also make broader contributions to foster the adoption of sustainable forest

management (SFM), improve forest governance and livelihoods in producer

countries, and avoid the creation of market inequalities between domestic and

industrial timber sectors.

US Lacey Act. As of May 22, 2008, the United States of America passed the

Lacey Act to minimize the U.S. market for illegal wildlife, fish, and plants. This

measure would expectedly support the efforts of other countries to combat

illegal logging and trade. Under the Lacey Act, it is unlawful to import, export,

transport, sell, receive, acquire, or purchase in interstate or foreign commerce

any plant, with some limited exceptions, taken or traded in violation of the laws

60

of a U.S. State, or most foreign laws. It is also unlawful to make or submit any

false record, account or label for, or any false identification of, any plant.

Similar to FLEGT, the Lacey Act was promoted by consumer country and based

on traceability to origin. This implies requirements to be complied by

producers and or exporters with different enforcement mechanism. However,

there is a need to provide better consultation, communication mechanism, and

protocol in multilateral and bilateral formats since some interpretations were

not clearly understood, no concrete benefits were perceived from adoption the

Lacey Act and there were fears among producers/exporters of loosing sales in

the short term.

Forest certification. Many factors are considered in forest certification

programmes including illegal logging. There are some evidences that

certification programmes are having a positive impact on forest management

practices around the world although doubts about the value and future viability

of forest certification from a market perspective exist. Issues related to more

comprehensive management planning, plant and animal biodiversity, retention

of sensitive areas, and social responsibility have all become more important as

certification processes have become more prevalent. The development of

demand for certified forest products through specific public procurement

policies have been facilitating by several governments at local, provincial and

national levels in the US and Europe. However, these measures were seen as

effectively constituting non-tariff barriers to trade by some developing

countries.

Policies promoting the sound use of wood. The harmonization of functional

specifications in standards across borders is clearly important to more efficient

use of wood. For example, although no direct regulatory barriers to the use of

wood or wood-based products in the construction of residential buildings,

differences between sets of regulations act as barriers to common practice

across Europe. The development of wood-based composite products such as

oriented strand board (OSB), laminated strand lumber, parallel strand lumber

and laminated veneer lumber (LVL) provides is another example of significant

advancement in the sound use of wood. This has dramatically affected wood

markets and provided new options to forest managers and policy makers. New

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developments related to wood-based composite products technology is

associated with myriad products that can be substituted for products made of

solid wood and is likely to stimulate further interest in plantation establishment

while at the same time further reducing interest in long rotation periods on

industrial forestlands.

Research and development related policies. In forestry sector, publicly

funded research is related to the development of policies aimed at the sound

use of wood. The objective of all wood products research program globally is

to improve efficiency of wood use, whether through development of new

conversion technologies, product designs, building codes and application

guidelines or durability enhancements. For example, in US, the development of

wood composites and engineered structural materials has allowed better

utilization of low value resources to create high value materials, thereby

enhancing forest management options.

Industry competitiveness and investment policy. The developed countries is

forced to reassess a long-established manufacturing and marketing strategies

due to the flow of capital investment to new producing regions, and growing

global competition in wood-based commodity products markets. One result in

North America is radical new thinking about the nature of paper manufacturing

in the future, which is to transform the entire industry to a

biochemicals/biofeedstocks/bioenergy/pulp and paper industry, with individual

mills operating as integrated biorefineries. Under this new paradigm,

manufacturing centres will have the capacity to produce electricity, liquid fuels

(such as ethanol), and a wide variety of bio-derived chemicals and chemical

feedstocks, in addition to pulp and paper. Paper will effectively become only

one of a number of (diverse) co-products. The biorefinery is quickly moving

beyond the concept stage, with a major research effort now underway involving

both wood products and the agricultural sectors of the US and Canadian

economies.

Climate change policy. Although a considerable research effort has

been conducted to quantify carbon flows and storage within forests under

various management regimes, it has little impact on forest management

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practices and uncertainty impacts on markets and trade in the US. The carbon

trade market is growing globally with market buyers are mainly Japan, the

Netherlands and the Carbon Finance Business (CFB) of the World Bank

(Prototype Carbon Fund and Community Development Carbon Fund). However,

carbon sink projects especially those linked to plantations and large-scale

hydropower projects face strong NGO resistance, which will likely make such

projects less attractive for Carbon Emission Reduction (CER) buyers. On the

other hand, the working group of an EU Advisory Committee (EU 2004) has

recently focused on carbon sequestration benefits associated with substitution

of wood for non-wood materials.

Wood energy promotion policy. As countries promote renewable energy

sources, energy markets and the international biofuel trade are rapidly

developing. In Europe, demand continues to increase for the use of forest

biomass for energy. This is partly driven by targets to fulfill national

commitments under the Kyoto Protocol. Meanwhile, increase demand for wood

as a source of bioenergy in North America and Europe whether as a result of

business initiatives or government policies, or both creates a competitive

alternative use of raw material in wood-based industries, especially the pulp

and paper and panel industries. This new reality means the price of wood fibre

will have to be competitive with the price of wood as a fuel even though this is

a positive development from the standpoint of profitability of forestry.

Trade policy and tariff and non-tariff barriers. There is still tariff

escalation of forest products in developed countries. But, the overall level of

applied tariffs is higher in developing countries than in the industrialized

regions, with considerable differences in the applied rates between regions.

Reducing tariff barriers would then increase new export market opportunities,

which in turn, increase wood and forest products production in the forest-rich,

net exporting countries. On the other hand, non-market barriers, such as those

set through environmental, social or health standards, are considerably more

difficult to negotiate.

Phytosanitary measures. The WTO Sanitary and Phytosanitary (SPS)

Agreement aims at clarifying inspection and quarantine control procedures.

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The profile of SPS measures has risen in recent years, partly as a response to

increased vigilance and concern about environment and safety issues. Concern

is not limited to risks of wood transport from developing countries. Regulations

also impact trade between North America and Europe in order to prevent

transmission of a range of forest pests across the Atlantic.

Indonesia’s forest industry revitalization

6

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INDONESIA’S forest sector is facing crisis, due to rapid forest resource loss

and degradation that threaten the livelihoods of rural people and the sector’s

continued contribution to export earnings and economic development.

Industrial restructuring and development of alternative timber resources are

needed to bridge the growing gap between demand for forest products and

sustainable supply. The Ministry of Forestry and most stakeholders recognize

the problem of industrial over capacity and the obstacles to revitalization posed

by continued illegal logging. There is also recognition that the future of the

wood processed industry will depend on an expanded plantation program. In

many areas, there is considerable potential to involve the rural poor in

plantation production on both community and individually owned land.

Expanding plantations will be challenged by conflict over land resources and

the need to address issues of due process related to gazettal to help ensure

legality of products in international markets. Industry revitalization will also

require restructuring of the wood processing industry, the main source of

demand for Indonesian timber resources.

With regard to develop operational policies and plans, the Ministry of Forestry

established an In-house Experts Working Group in June 2006, with a mandate

to advise the Minister of Forestry on key issues related to industry

revitalization, including plantation acceleration and industry retooling/reform

and prepare policy recommendations for the Minister directly. The Working

Group, which consists of senior Forestry Ministry experts including

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representatives from each of the Department’s main directorates, as well as

the legal and planning bureaus, and outside academics, has: conducted regular

meetings with several major stakeholders, visited several forest plantation

concessionaires, community forests, and wood processed companies; and

conducted stakeholder consultation workshops. Based on In-house Experts Working Group’s assessments, four working groups: Woodworking WG,

Furniture WG, Plywood and Other Wood Based Panel WG, and Pulp and Paper WG were then established by Direktorat Jendral Bina Produksi Kehutanan

(BPK) in March 2007. In-house Experts Working Group was then actively

guided2

2 In reference to: (1) Restructuring and Revitalization of Indonesia’s Wood-Based Industry: Synthesis of Three Major Studies. T. H. Brown, B. C. H. Simangunsong, D. Sukadri, D. W. Brown, Subarudi S., A. Dermawan, Rufi'ie. Ministry of Forestry, CIFOR, and DFID-MFP. Jakarta. November 2005; (2) Revitalization of Indonesia’s Forest Industry: A Supply Side Analysis. 2006. B. C. H. Simangunsong. Paper prepared for the World Bank; and (3) Revitalization of Indonesia’s Forest Industry: A Demand Side Analysis. 2007. B. C. H. Simangunsong. Paper prepared for the World Bank.

those working groups to develop their industry roadmaps and

combined them into roadmap of Indonesia wood-based industry.

All involved stakeholders have a shared vision regarding Indonesia wood-based

industry. That is, in the future the industry would produce wood products that

can enter highly competitive market and be supported by sustainable

increasing wood supply. There would be enough log supply from different

sources; particularly from certified and sustainable managed production forests

and the production level of wood products would be in accordance with that

sustainable log supply in the next 20 years. Moreover, Indonesia wood-based

industry would operate efficiently and in environment friendly with capacity

utilization rate of at least 70%, focus on high value-added products that can

enter highly competitive market where at least 20% of them are certified, and

enlarge their market share in domestic and foreign markets.

However, they are also recognizing many problems that can hinder Indonesia to

achieve that vision. At least six major problems agreed by all stakeholders are

facing by the industry. They are: a huge gap between industrial demand for

timber and the legal sustainable supply, industrial over capacity, inefficient in

wood processing industry, declining in product competitiveness, declining in

market share, and low value-added products.

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Two-stage strategy with a series of policy and action plans for each strategy in

each stage was then recommended. In the first stage or the restructuring

phase, which is from 2007 to the year 2014, it will be important strategy to

intensify forest plantation, increase productivity of forest plantation, combat

forest crimes, develop alternative sources of timber supply, optimize industrial

log distribution, improve utilization of natural production forest, monitor

operations of wood processing industry, invest in new wood processing

technology for efficiency and waste reduction, reduce production cost of wood

products, enhance wood products image in international market, facilitate

development of wood industry clustering, find new market and sustain

traditional market of wood products, invest in secondary wood processing

technology, and diversify wood products. This first stage focuses on demand

management and supply enhancement and sets the stage for the revitalization

phase.

Several strategies chosen in the first stage need to be continued in the second

stage, the revitalization phase, in addition to strategies that take advantage of

different timber supplies, different processing technologies, and different end

products for different end markets. Those important strategies are to: intensify

forest plantation, primarily for saw logs/veneer logs production; increase

productivity of forest plantation, broaden utilization of alternative timber

supply sources; broaden implementation of Intensive Silvicultural System

(SILIN) in the natural production forest; continue investment in new wood

processing technology for efficiency and waste reduction; broaden wood

industry clustering; continue production cost reduction; continue enhancement

of wood products image in international market; broaden foreign market and

sustaining traditional market of wood products; penetrate potential market;

invest in secondary wood processing technology; and continue wood products

diversification.

Series of policy and action plans for each strategy in each stage were

recommended. One or several indicators were also developed and involved

parties were also identified for each action plan. Nevertheless, there are several

enabling conditions that are needed to be considered such as: good political will

of the government, national stewardship, land tenure and use security, good

69

forest governance, and existence of economic institutions. Implications of these

chosen strategies are temporarily decrease in output and labour force level so

that coordination and collaborations amongs related ministries or departments

are a must. On the other hand, these chosen strategies reduce pressure to

natural forest utilization and give more space to health and efficient wood-

based companies to operate.

Conclusions

7

72

BASED on current world’s demand and its trend, shares of forest product

imports from Indonesia’s to total forest product imports in each major

country destination as reported by importer countries and considering the

principal policies and demand drivers that are likely to affect the global and

regional markets, plywood, medium density fibreboard, wood pulp and paper

and paperboard would be plausible to be developed for international market

such as Japan, China, the Republic of Korea, Taiwan, Saudi Arabia, India,

Malaysia and United Arab Emirates as well as for domestic market. Meanwhile,

veneer sheets and particleboard would be plausible to be developed for

domestic market. To realize these potential future markets, Indonesia needs to

restructure and revitalize its forest products industry by addressing six major

issues, namely: a huge gap between industrial demand for timber and the legal

sustainable supply, industrial over capacity, inefficient in wood processing

industry, declining in product competitiveness, declining in market share, and

low value-added products.

One thing to be noted, due to characteristics of forest resources such as

exhaustibility, uneven distribution across regions, and externalities, Trade

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measures such as tariff, export restrictions, subsidies, FLEGT, the Lacey Act,

government procurement, building codes, and private standards for SFM could

in principle remedy overexploitation problems. But trade measures are often

second best measures to address the problems of forest resources with open

access. Strengthened property rights address the open access problem at the

source.

74

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ITTO. 2007. Annual Review and Assessment of the World Timber Situation

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Study of Legal Timber Product Demand in Major Markets

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