"Producers may not be able to meet the export demand due to a shortage of wood. The value is estimated at between 200 and 300 million dollars," said Sae Tanangga Karim, executive director of the Association of Indonesian Furniture and Wood Products Manufacturers.

He said the government decision to reduce the amount to be logged from 6.5 million cubic meters (8.45 million cubic yards) last year to 5.5 million cubic meters this year had contributed to the shortage.

The measure will remain in place until an equilibrium is reached between reforestation and logging, Karim said.

Illegal logging is also to blame for the shortage because most of the illegally felled timber is sold directly overseas, he said.

"Illegally logged timber goes to Asian countries like Malaysia, China and Vietnam. We support Greenpeace's campaign urging countries not to accept timber from countries which bought it illegally," he told AFP.

"In Malaysia, timber from Indonesia is taxed and after that it's clean as if it originated from Malaysia," he said.

Jakarta has urged Malaysia to take action against the trade in illegal timber from Indonesian forests and has called for a ban on Malaysian lumber in Europe.

Malaysia says Indonesia is not doing enough to curb illegal logging.

Greenpeace earlier this month said its activists witnessed rampant illegal logging and huge timber smuggling operations in a four week-long trip to Indonesia's part of Borneo island.

A 2002 report by the World Resources Institute, Global Forest Watch and Forest Watch Indonesia said Indonesia was losing nearly two million hectares (4.9 million acres) of forest annually -- an area half the size of Switzerland.

TERRA.WIRE