Indonesia’s Minister of Forestry announced that the harvest quota for natural timber for 2007 would be increased to 9.1 million m3, up almost 12% from 2006. However, sources close to the Ministry of Forestry
indicated that the quota for 2007 could be revised up to
12.4 million m3. The harvest quota was reduced between
2001 and 2005 to achieve sustained yield and
reduce over-capacity in lumber and plywood mills, which,
the government believes, has been achieved to a certain
extent.
The Indonesian wood industry has shrunk in the last years
with the declining availability of logs. The number and
production capacity of lumber and plywood mills have
plummeted over the period. The declining supply of
Indonesian plywood contributed, in fact, to the sharp
increase of plywood prices in 2006. According to some
analysts, the logging quota in 2006 (8.13 million m3) was
not fully used by local mills due to the reduced production
capacity and financial difficulties. Some analysts thus
believe that the logging quota for 2007 would not
necessarily lead to the revival of the Indonesian wood
industry.
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