The Business Competition Supervisory Commission (KPPU) called on the government to revise
regulations on rattan exports, saying it imposed burdens on rattan suppliers.

KPPU commissioner Ahmad Ramadhan Siregar said Thursday that the Trade Ministry’s 2009 regulation that restricted rattan exports hurt rattan suppliers because the domestic market alone was not large enough to cater to the supply.

The Indonesian Rattan Businessmen Association (APRI) said domestic rattan consumption was only 40,000 tons per year, while producers grouped with the association could potentially produce 696,000 tons of natural rattan each year.

“The local rattan industry has weakened in recent years due to declining production of finished rattan products. But decreased production should not be a reason to curb exports,” Ramadhan said at a press conference at the KPPU offices.

He added that the drop in production could be attributed to lower demand in 2008 and pressure from competing rattan products from China.

The Industry Ministry confirmed that there was a gradual decrease in the production of local processed rattan in recent years.

In 2009, local producers processed 174,386 tons of rattan, a 23 percent decrease from the 227,437 tons in 2008. In 2006 and 2007, the industry produced 373,880 tons and 372,761 tons respectively.

Last year, Indonesia’s total rattan exports stood at US$138.07 million, a 21.5 percent decrease from $167.75 million in 2009.

The 2009 regulation on rattan exports, implemented since Aug. 11, 2009, bans the export of several kinds of rattan and allows for the annual exports of only 35,000 tons of semi-finished rattan.

It also stipulates that farmers who want to export semi-finished rattan need a letter from the local rattan industry stating that the farmer provided sufficient supplies for the industry.

Ramadhan said the government needed to revise the rattan quota that could be exported so the inability of local firms to produce rattan-based furniture did not the affect exports of semi-finished products.

He added that the issuance of letters also made suppliers highly dependent on local furniture producers.

“Such authority could potentially result in abuse of power. Rattan suppliers who do not receive a letter cannot export their rattan,” he said.

“It is the government who should be in charge of issuing such letters instead of the local industry.”

In the event that domestic consumption of rattan decreased, the government should ensure that suppliers could sell their rattan in the global market, he said.

Indonesia, with around 300 rattan species growing throughout the country — notably in Kalimantan and Sulawesi — is the world’s largest rattan producer with 82 percent of the world’s total output. (lnd)

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