Malaysian Plywood Producers Want Price Contract
10/26/99
*******************************
RELAYED TEXT STARTS HERE:
Title: Malaysia Producers Want Price Contract
Source: Environment News Service
Status: Copyright 1999, contact source for permission to reprint
Date: October 26, 1999
KUALA LUMPUR, Malaysia, October 26, 1999 (ENS) - Malaysian plywood
producers are requesting help from the International Tropical Timber
Organization (ITTO) to combat a price slide caused by undercutting
among Indonesian suppliers.
The plywood market upset occurred after the abolition of Apkindo, a
producer's association. The association was abolished to comply with
the terms of an assistance package from the International Money Fund.
Without Apkindo, Indonesian exporters have no reference price. Asian
consumers now go from one supplier to the next, securing the lowest
price possible, an industry official told the Business Times
Malaysia. He suggested that the ITTO develop a plywood futures
contract to establish a reference price.
"The market situation may currently favor the consumers, but price is
not the only factor. Stability and security of supply is important
too," the official said. "Things can change very easily -- a buyers'
market today can become a sellers' market tomorrow. A plywood futures
contract to contain price fluctuations benefits everyone," he said.
Last year the United Nations Conference on Trade and Development
explored the need for such a contract. Most producer nations favored
the idea. Now producers want ITTO to perform a similar study for
consumer feedback.
Recent demand from China and Japan has improved plywood prices to
about US$300 per cubic meter, but the market remains under pressure,
the official said.