Thursday, 16 August 2012

The Indonesian rattan embargo

A lot of our regular customers are worried. They have been asking us about the future of rattan supplies as they are hearing rumours.....

At the beginning of this year the Indonesian Government implemented an embargo on the export of rattan. Last year the Jakarta Post wrote:

"Early this December, the Trade Ministry of Indonesia, totally banned exports of raw and semi-processed Rattan starting from January 1st  2012 as part of efforts to revive the ailing local rattan industry and to give higher value to the commodity at home. Along with this move by the Trade Ministry, the Industry Ministry and Forestry Ministry show their support for this policy. MS Hidayat, Industry Minister, has also created a road map as guidance for developing the domestic furniture industry and boosting the competitiveness of locally made furniture during the next five years."

So yes, I'm afraid there is a problem for those of us in the restoration industry that use rattan products. Even though we pose no threat to the Indonesian home market, we are caught up in this event. At the moment, many of the processing factories outside of Indonesia have retained back up supplies of the raw materials, but these are dwindling fast and they cannot be replaced. Raw material prices have increased massively, we have had reports of rises up to 200% during this year alone. The factories that produce hand weaving cane and woven panelling are selling their stocks at hugely inflated prices and then closing. Their staff are finding new careers in other industries as even they see no future in rattan. We have been told by a friend of ours in the industry that up to two thirds of the factories have already closed.

Where does this leave us? For now supplies are available, but the prices are going to be much higher than we have ever experienced before. Some of the products that we are familiar with will no longer be available as the skilled workers who make them leave the industry. Indonesia isn't the only area of the world producing rattan, but is generally acknowledged that they are responsible for about 80% of the production and needless to say there will be stiff competition for the other 20%. Will the ban remain in place for long? We don't know, but it's effects will no doubt resonate for a long time to come.

So where's the good news? Synthetic rattan has already made itself a firm favourite and almost replaced rattan as the material of choice for conservatory and patio furniture in most areas of the world. Take a trip to your local garden centre and see how many suites you see in synthetic versus natural material. Maybe over time the dwindling demand for natural rattan furniture will encourage the Indonesian governors to view the export ban differently and see that there are other important markets for their semi-processed premium materials....that is all assuming that we as premium consumers can survive in business for long enough!

Meanwhile all is not lost. We have some ideas that we are already formulating to ensure that we can continue on helping our customers to stay in the restoration business, so don't worry. There is always an alternative.......we just need to find it first, but be assured, we are doing all we can.

1 comment:

Weavin' Wicker Woman said...

Sorry to hear this Kim about the scarcity of rattan reed in the coming months/years. We've been talking about it on the Seatweaving & Chair Caning Forum and I've just made a post with a link to your blog. Thanks for keeping us on the other side of the pond, informed too.

The Wicker Woman-Cathryn Peters