Cap rattan exports to help local industry

Mustaqim Adamrah, The Jakarta Post

The Industry Ministry seeks to decrease rattan exports to help ensure supply for the local furniture industry.

Benny Wahyudi, the ministry's director general for agriculture and chemical industries, said last week the ministry was in the process of submitting a request to the Trade Ministry to revise a 2005 Trade Minister regulation on rattan exports.

"We want (the Trade Ministry) to only issue export permits when raw rattan producers are able to provide enough supply for domestic rattan craftsmen," he said last Friday.

Under the 2005 regulation, the government allows a maximum 25,000 tons of raw rattan and 16,000 tons of processed rattan to be exported per year.

"This (planned revision) is also expected to boost the value of our rattan exports," he said.

The revision is also expected to limit the number of companies eligible for raw-rattan export licenses, Industry Minister Fahmi Idris said previously.

"Export licenses will later be given only to companies based in raw-rattan producing regions," he said during a meeting with members of the House of Representatives Commission VI overseeing industry and trade.

The country produces 600,000 tons of raw rattan per year, or 75 to 80 percent of the world's total production. Sumatra, Kalimantan, Sulawesi and Papua are rattan-producing regions.

The request was prompted by calls by the Indonesian Furniture Entrepreneur Association (Asmindo) -- which represents almost all of Indonesia's rattan users, accounting for an annual demand of 300,000 tons of the commodity -- to further limit raw rattan exports.

Asmindo chairman Ambar Tjahyono said many rattan companies were exporting rattan beyond their allotments, causing a supply shortage for domestic craftsman on Java.

In addition to a limit on exports, tighter monitoring and supervision are necessary to boost the local furniture industry, said Ambar, adding that the association hoped the Trade Minister would soon review the regulation.

Furniture exports, including rattan-based items, reached US$2 billion last year from $1.8 billion in 2006.

Fahmi has said the government expects furniture exports to reach $3 billion by the end of 2009.