Indonesia's Timber Market Grew in October, but Still Below the Critical Value

In the first half of this year, the export volume of furniture from Indonesia totaled 253,500 tons, down 26% from the first half of last year 2022. And the export value were 1.07 billion US$, according to the report released by Statistics Indonesia.

Sawn timber in the factory/img:

In October this year, the overall operating conditions of Indonesia's timber industry declined, and in the latest GTI report released by ITTO, Indonesia saw an increase of orders and production by 5.6% from previous month (September 2023). This month, October 2023, the GTI-Indonesia index registered 46.3%.

Although, the value of last 3 consecutive months are still below the critical value (50%). Some challenges reported by Indonesian enterprises might help to explain. Due to dry season, the river water level is lower, and make it difficult to transport logs. Fuel prices for the industry rose, which led to a 20-30% increase in production costs. And the export market demands decreased, enterprises only rely on domestic customers.

Indonesian enterprises recommended to make efficient use of heavy equipment that is strictly adjusted to the amount of production. And meanwhile to adjust production according to buyers' needs to maintain the balance between supply and demand.

The news is not so positive for the other countries too. The GTI indexes for Gabon, Malaysia and Mexico were still below 50% in October, indicating contraction, with low sales of logs, plywood, wood products and some other products and declining market prices.

This month only China shows an increase of orders and production by 17.9% compared to previous month, and reached 55.2% in October. The Chinese government has rolled out a series of policies since early this year to support the development of the real-estate and household-furnishing industries.

Source: ITTO


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