Malaysia
Risks to growth if global demand weakens
The OECD Economic Outlook for Malaysia says the economy is projected to grow steadily with output growing by 5.1 percent in 2025 and 4.8 percent in 2026.
The report continues “Private consumption is expected to remain robust, with inflation remaining at low levels and favourable labour market conditions.”
“Private investment will be supported by new opportunities in technology-intensive sectors and the expected increases in exports. Infrastructure projects and investments by public corporations will support public investment.”
“Inflation is projected to rise in 2025 reflecting progress in reducing energy subsidies, but the effects should only be temporary. With trade amounting to 147 percent of GDP, Malaysia faces significant downside risks if global demand is weaker than expected.”
Asean trade and investment opportunities
Asila Jalil, writing for the Malaysian Business Times, has reported on a panel discussion at the Institute of Chartered Accountants of England and Wales/Malaysia (ICAEW) on the ‘Malaysia Economic Insight 2024’ where Maybank Investment Banking Group (IBG) Head of Equity Research, Anand Pathmakanthan, said Malaysia should leverage the trade and investment opportunities that are present in Asean to maintain growth in the longer term.
He added Malaysia should not be distracted by BRICS and how the incoming US administration could affect Malaysia. He added, the opportunities within Asean integration are massive.
He pointed out in terms of intra-Asean foreign direct investment or intra-Asean trade the ratios are half of what they are in the European Union (EU) or the US-Mexico-Canada Agreement.
Bursa Malaysia chairman, Tan Sri Abdul Wahid Omar, agreed that Malaysia's biggest potential lies in Asean but that should not exclude Malaysia's move towards becoming a BRICS member. Malaysia can be a part of many trade agreements.
The consensus was the country should diversify the economy and export markets and diversify the currencies used.
MTC’s Factory Transformation Programme
A press release from the Malaysian Timber Council (MTC) reports MTC has received recognition for its transformative efforts in revolutionising the timber industry according to a recent press release and the Ministry of Plantation and Commodities (KPK) officially endorsed MTC’s Factory Transformation Programme (FTP) as a key initiative for the industry.
This highlights the programme’s success in driving automation, enhancing productivity and promoting sustainable practices in the Malaysian timber sector.
Launched in 2021, the FTP was designed to propel wood-based companies towards achieving Industry 4.0 (IR4.0) by promoting automation and Good Manufacturing Practices (GMP).
The programme has achieved substantial milestones since its inception, with 58 companies participating and more than 90 percent benefiting from its implementation.
In 2023 alone, the FTP helped participating factories reduce waste valued at RM3.2 million through the implementation of quality control systems which significantly reduced the need for product rework. The success of FTP was further underscored during a visit today by two companies—Kim Teck Lee Timber Flooring and Weng Meng Industries, both located in Banting, Selangor.
During company visits the Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, witnessed first-hand the positive impact of the FTP on both the workflow efficiencies and overall productivity of the factories. MTC’s Chairman said the FTP aims to foster holistic transformation across all levels of the participating factories.
He added that the programme focused on equipping employees with the necessary training and support to improve operations and drive productivity.
He pointed out that the FTP not only leads to substantial cost savings but also strengthens the global competitiveness of Malaysia’s timber industry players. MTC’s CEO highlighted some of the notable outcomes from the programme, including companies reducing factory space by up to 25 percent, with the freed-up space being leased to other businesses, further boosting their economic activity.
2025 export target can be achieved
Datuk Chan Foong Hin, Deputy Minister at the Ministry of Plantations and Commodities (MPC), said he is confident that the target of RM28 billion in wood and wood products exports by 2025 will be achieved as outlined in the National Agri-Commodity Policy.
He said this confidence is based on strategic initiatives, increasing global demand and close collaboration between the ministry and industry players to enhance the competitiveness of Malaysian wood products through innovation, sustainability certification and market diversification.
Between January and August 2024, timber exports have shown positive growth, increasing 8.9 percent to RM15.2 billion compared to RM14.01 billion in the same period in 2023 he said after the launch of the Malaysia Timber Expo (MWE) 2025.
Engineered wood production
Sarawak is targeting one million hectares of land for planted forest to meet the demand in overseas markets for the raw material to produce engineered wood, according to Deputy Minister for Urban Planning, Land Administration, and Environment, Len Talif Salleh.
In highlighting the role of engineered wood in driving Sarawak’s economic, environmental and social development, Len Talif said such an investment would create jobs, support local businesses and attracts investment.
He is reported as saying “Engineered wood provides solutions to many environmental challenges. Unlike concrete and steel, it is a renewable resource with a much lower carbon footprint. It absorbs and stores carbon, helping fight climate change.”
Carbon offset guidelines
A Technical Working Group (TWG) for Forest Carbon Offset Guidelines has been established by the Ministry of Natural Resources and Environmental Sustainability (NRES).
The TWG, working through the Malaysia Forest Fund (MFF), is developing a national crediting system designed to align with Malaysia’s unique environmental context while actively supporting the country’s commitment to maintaining over 50 percent forest cover.
The crediting system also fulfils the objectives of the National Policy on Biological Diversity and Malaysia’s Nationally Determined Contributions.
Known as the Forest Carbon Offset (FCO) the initiative will facilitate the transfer of forest-based emissions reduction or removals to buyers in the form of carbon credits, enabling organisations to offset their carbon emissions.
Following a feasibility study, a Technical Working Group (TWG) was established, comprising experts from government agencies, private sector, civil societies, non-governmental organisations and academia to provide insights and recommendations on the development of FCO guidelines.
During the session, TWG members received an overview of the draft guidelines prepared by MFF and were invited to review and contribute feedback to refine the guidelines further in preparation for the next meeting.
Environment and emission laws
Sarawak will implement two new regulations in 2025 aimed at enhancing environmental sustainability according to Premier Abang Johari Tun Openg.
The regulations are the Certified External Auditors Eligibility and Registration Regulations 2024 and the Burning and Emission Regulations 2024.
These are designed to ensure compliance with ethical standards and the responsibility to verify accurate reports, thereby supporting Sarawak’s commitment to reducing greenhouse gas emissions.
The Burning and Emission Regulations 2024 will govern burning and gas emission activities in Sarawak by enforcing strict controls, requiring prior approval from the Controller of the Natural Resources and Environment Board (NREB).
Sarawak Sustainability Blueprint
The Sarawak Sustainability Blueprint, a roadmap to guide all sectors towards harmonising economic growth and environmental preservation was unveiled at the Sarawak Sustainability Insights 2024 event in Kuching.
Sarawak, Abang Johari Tun Openg, said the blueprint focuses on two critical dimensions, Green Transition and Economic Equity with the aim of establishing a robust framework that integrates sustainable practices.
There are 10 strategic thrusts under the Blueprint, namely Energy Transition, Sustainable Agriculture and Food Security, Green Mobility, Circular Economy, Sustainable Manufacturing, Sustainable and Responsible Mining, Protection and Enhancement of Natural Assets, Sustainable Cities, Community Development and Eco-Tourism.
Under the Energy Transition strategy, the Premier said Sarawak is dedicated to continuing harnessing clean energy sources to meet domestic energy demand and for power exports.
Indonesia
Ministry of Forestry can contribute to ‘Asta Cita’ mission
The Director General of Sustainable Forest Management of the Ministry of Forestry, Dida Mighfar Ridha, said the Ministry of Forestry is ready to support President Prabowo's ‘Asta Cita’ mission.
According to him, the achievement of Asta Cita (eight main missions of the government) will be able to answer global challenges and geopolitical uncertainty especially in national self-resilience and food and energy self-sufficiency which are in line with the multi-forestry business approach.
The chairperson of the Indonesian Forest Entrepreneurs Association (APHI) Prof. Indroyono Soesilo is reported as saying integration of the timber utilisation with non-timber forest products and environmental services is at the core of the multi-forestry business approach and address achievement of the Asta Cita Mission 2 and 5.
Reducing dependence on exports to the US
The Indonesian Furniture and Crafts Industry Association (HIMKI) is preparing a strategy to address any impact of additional US import tariffs being proposed by the incoming US administration as these will impact Indonesian furniture and craft exports.
Abdul Sobur, Chairman of the HIMKI, noted that the planned increase in tariffs would undermine the competitiveness of Indonesian furniture products in the US market. The HIMKI is focused on diversifying its export markets targeting India, China and countries in the Middle East.
To address the effects of a rise in US import tariffs HIMKI has been actively communicating with the Indonesian government and proposed measures including negotiating a trade agreement with the US for preferential tariffs.
Other options include offering incentives to exporters through reduced import taxes on raw materials and providing support for upgrading production technology.
Indonesia, Malaysia efforts to address EUDR
Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the Joint Task Force on the EUDR involving Indonesia, Malaysia and the EU will continue its work where Indonesia and Malaysia will continue to fight for recognition of their respective sustainability standards.
Regarding traceability, he noted that Indonesia and Malaysia have adequate mechanisms to address this issue. However, the EU's requirement for specific location data or location sharing will be very difficult, especially for small scale farmers and timber operators.
In related news, the decision to delay implementation of the EUDR has drawn criticism from environmental groups such as the Indonesian Civil Society Coalition (Koalisi Masyarakat Sipil Indonesia) and the Indonesian Forum for the Environment (Wahana Lingkungan Hidup Indonesia).
The Forest and Garden Campaign Manager of the Indonesian Forum for the Environment, Uli Arta Siagian, also regretted the delay in the implementation of the EUDR by the European Union Parliament.
Forests offer potential for bioeconomy
The National Development Planning Agency (Bappenas) has said Indonesia possesses significant bioeconomic potential which will serve as a foundation for economic transformation by 2045.
With 62 percent of Indonesia's land area covered by forests the forestry sector is crucial for developing a sustainable bio-based economy. The Multi Forestry Business Policy aims to be an innovative solution that supports Indonesia's economic transformation.
Vivi Yulaswati, Deputy for Maritime Affairs and Natural Resources at the Ministry of National Development Planning/National Development Planning Agency (PPN/Bappenas) stated an initiative is necessary to develop bioeconomic concepts and principles that can be adopted at the national level.
As part of the government's commitment, the bioeconomy concept has been incorporated into the National Long-Term Development Plan (RPJPN) 2025-2045 and the National Medium-Term Development Plan (RPJMN) 2025-2029.
Indonesia-Canada economic partnership agreement
Indonesia and Canada signed a Joint Statement on an Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) which will widen market access for Indonesian products in Canada.
Indonesian Minister of Trade, Budi Santoso and Canadian Minister for Export Promotion, International Trade and Economic Development, Mary Ng said after negotiating for more than 2.5 years the agreement was concluded.
Santoso explained that, in addition to the trade of goods, the agreement covers preferential treatment for Indonesian service providers such as telecommunications, construction, tourism and transportation service sectors.
The ICA-CEPA will also facilitate access to investment in the manufacturing, agriculture, fisheries, forestry, mining and quarrying and energy sectors.
Strong economic fundamentals – Indonesia an attractive destination for investment
According to Coordinating Economic Affairs Minister, Airlangga Hartarto, Indonesia's strong economic fundamentals makes the country an attractive destination for US investments.
The roundtable hosted by the US-ASEAN Business Council (USABC) in Washington, Airlangga highlighted Indonesia’s readiness to enhance economic cooperation with the United States following leadership transitions in both nations.
The Minister briefed US executives on President Prabowo’s economic agenda and the government’s roadmap for achieving the “Golden Indonesia 2045” vision which aspires to make Indonesia a developed nation by its centennial anniversary.
The new administration targets an ambitious eight percent annual economic growth over the next five years. The American business community expressed keen interest in President Prabowo’s food security and energy transition strategies.
Marc Mealy, USABC’s Chief Policy Officer and Senior Vice President said the roundtable laid the groundwork for the upcoming Indonesia Business Mission during which USABC will bring representatives from 50 companies to explore opportunities for wider collaboration.
Industrialisation in eight key sectors
The Investment Coordinating Board in the Ministry of Investment and Downstream Policy is developing a roadmap for downstream industrialisation in 28 key commodities according to Minister Rosan Roeslani.
Rosan explained that the focus will be on eight primary sectors: minerals, coal, oil, natural gas, maritime, fisheries, plantations and forestry.
Rosan acknowledged challenges, especially in technology, human resources and funding. "We will prioritise these 28 commodity sectors on which industries have the largest reserves and offer the best potential, he added.
Forestry investments to create 400,000 new jobs
During a meeting with Commission IV of the Indonesian House of Representatives the Minister of Environment and Forestry, Raja Juli Antoni, stated that the management of the forestry sector in 2025 will prioritise increasing production and the downstream processing of forest products to support regional economic development.
He said, "the forestry sector is expected to see an investment value of IDR19.9 trillion in 2025 with planned workforce absorption of 400,000 people".
Non-tax State revenues from the forestry sector are projected to reach IDR7.72 trillion in 2025. This estimate is based on calculations of revenue generated from roundwood production to meet export demand, nature tourism visits, utilisation of forest areas and administrative fines in the forestry sector.
The Ministry aims to achieve specific performance targets by 2025 which include a 55 percent reduction in greenhouse gas emissions from the forestry sector. Additionally, the ministry seeks to reduce the rate of deforestation to 0.2 million hectares per year and attain a national red list index value for species under threat.
In related news, the Minister of Environment and Forestry indicated a roadmap and strategic plan for the reforestation of 12 million hectares of damaged forests will be prepared.
This is a follow-up to President Prabowo Subianto's directive at the UN COP29 in Azerbaijan.
Also the Minister confirmed that he will not hesitate to revoke the Forest Area Borrow-Use Permit (IPPKH) from corporations that fail to meet the land rehabilitation obligations required by the permit.
Indonesia, Japan Agreement on carbon credit trading
The Indonesian press has reported the governments of Indonesia and Japan have reached an agreement to initiate Mutual Recognition Arrangement (MRA) for bilateral carbon credit trading cooperation.
This MRA is reportedly the first bilateral cooperation model between countries under the framework of the Paris Agreement, specifically Article 6.2.
The Vice Minister for Global Environmental Affairs, Ministry of Environment Japan, Yutaka Matsuzawa, stated that through the MRA the Indonesian and Japanese governments can develop collaboration and cooperation towards net zero emission between the two countries.
Myanmar
Private forest plantations and wood-based industries
A workshop on the development of private forest plantations and wood-based industries took place on 2 December 2024 at Forest Department, Nay Pyi Taw.
Attendees included representatives from government, wood-based associations and private entrepreneurs from the forest plantation, rattan, bamboo, furniture and sawmill sectors.
Officials reported that Myanmar’s forest cover was estimated at 42.19 percent in 2020 and 42.15 percent in 2023 and that State-owned and private forest plantations are being established to meet the raw material needs of wood-based industries.
Entrepreneurs were urged to explore new markets, study regional export/import conditions and work toward expanding the sector.
It was noted that the private sector's foreign income from the wood-based industry exceeded US$29.4 million in the fiscal year 2023-2024.
The potential for increased production and export of finished wood products along with bamboo and rattan products using advanced technology was also emphasised as a means to boost employment and national economic development.
The workshop featured discussions on establishing and managing private forest plantations, production and sales processes and the development of wood, bamboo and rattan products.
Participants also addressed issues related to exporting finished non-timber forest products. In addition, group discussions focused on sustainable raw material supply, industry growth and boosting exports.
A similar meeting on the development of Myanmar’s timber industry was held in December 2022, but tangible progress remained elusive due to restricted market access.
Myanmar had entered into FLEGT VPA negotiations in 2013 to ensure timber legality. However, these negotiations stalled in 2019.
Since 2013 the Myanmar Forest Certification Committee (MFCC) has been developing the Myanmar Timber Legality Assurance System (MTLAS), further strengthened by PEFC and ITTO-supported projects.
Despite these efforts, major international markets have questioned Myanmar’s timber legality citing concerns linked to the country's low Corruption Perceptions Index and weak law enforcement along supply chains.
Compounding these challenges, the Myanma Timber Enterprise (MTE), the sole legal entity for delivering round and squared logs continues to face sanctions. In Myanmar, timber processed and exported must originate from MTE sources to be considered legal, leaving the sector heavily reliant on a sanctioned institution. The current government has maintained a logging ban while promoting the use of plantation-sourced logs.
The MFCC is working toward the certification of Myanmar's first plantation forest under the Myanmar Forest Certification Scheme aiming to ensure both legal and sustainable timber production.
India
Focus should be on producing high-quality products
Piyush Goyal, Minister of Commerce and Industry has urged the manufacturing sector to focus on production high-quality products to tap global markets as export competitiveness cannot come from government subsidies or support.
He added, export competitiveness is not going to come from closing the doors to the rest of the world.
The government is expanding the range of products covered by Quality Control Orders (QCO) to boost manufacturing in the country.
As of 2014 only 14 QCOs covering 106 products were issued, but in the last 10 years, the government has issued as many as 174 orders covering 732 products aimed at curbing imports of sub-standard products, preventing unfair trade practices and ensuring the safety of consumers as well as the environment.
The Economic Times of India has reported the Minister said, “India will have to aspire to become a manufacturer of high-quality goods and services and it should be recognised globally.”
Make quality a default setting in product manufacturing
A government press release provides more on the concept ‘Make quality a centre stage of industry, a default setting in product manufacturing’, suggested by Shri Piyush Goyal.
The press release reads “Union Minister of Commerce & Industry, Shri Piyush Goyal during his valedictory speech at the Indian Foundation for Quality Management (IFQM) Symposium today in New Delhi urged the industry captains and stakeholders in attendance to make quality the centre stage of the industry.
He further urged the participants to make quality a default setting in product manufacturing and not an option for the customers.
Shri Goyal praised IFQM for taking the industry-led initiative on quality and said that changing mindset is the largest impediment to India’s adoption of quality.
Shri Goyal noted that Prime Minister Shri Narendra Modi has always put quality at the core of the Government’s efforts in building the nation. He added that the PM's vision of ‘Zero Defect and Zero Effect’ has been at the forefront of his governance for the past two terms to make India a developed nation.
He stressed that the sustainable manufacturing practices moving towards a green economy will be the defining catalyst towards the journey of becoming a Viksit Bharat (Developed India).
On the Rs 1 lakh crore Anusandhan National Research Foundation (ANRF), he said that through this fund the Government will be supporting innovation for the industry to make it a prerequisite alongside quality for a Viksit Bharat.
Shri Goyal mentioned that till 2014 there were only 14 Quality Control Orders (QCOs) covering 106 products, while in the last decade the Government has expanded to 174 QCOs covering 732 products.
Emphasising on the effect quality can have on toy manufacturing, the Minister stated that introducing quality control has led to an increase in exports.
He also said that for India to be recognised as a brand at the world stage, quality has to be given foremost importance. If it is coming from India it has to have an imprint of quality, that should be our aspirational goal.
The Union Minister invited industry leaders to partner with the Government and take quality to the MSME sector through the QCO ecosystem.
He further urged the industry captains to share their best practices and persuade companies with technical manpower for aiding the Government’s technical standards committees to align quality with global standards.
He also called for a government, industry and academia partnership with the quality control regulators working to solve difficulties manufacturers have in adopting good quality standards.
Shri Goyal asked the participants to develop a sense of duty towards Viksit Bharat and said that the country’s export competitiveness will not come from subsidies rather an Atmanirbhar Bharat will come from a self-reliant India.
“Quality is not our job, it is our duty,” he said.
Set India on a path to become a net exporter of teak
In a working paper (EAC-PM/WP/32/2024) the Economic Advisory Council to the Prime Minister (EAC-PM) calls for de-regulating timber cultivation in order to make India a net timber exporter.
The authors say, “a complex regulatory system that limits the felling and transit of high-value native species combined with an increased demand for furniture, plywood, and timber for construction has increased India's dependence on imports of these species from high-risk sources.”
“The policy change proposed below will put India on the path to going from a teak importer to a leading exporter, enhancing farmers’ income and improving the carbon content of the soil.”
“In India, tracking of log and processed wood products is regulated under the Forest Produce Transit Rules, which were developed to support the 1927 Forest Act.”
“The Transit Rules deal with the storage, movement and import or export of a broad range of materials defined in the Act as ‘forest produce’, which incidentally include wildflowers and fruits. An elaborate system of passes, licenses, hammer marks and permits is laid down requiring multiple inspections and the decisions of higher officers before a pass can be issued.”
“The procedures are essentially the same for privately owned timber as for government timber. Passes authorising the transport of the material are required at each stage of transactions.”
Vietnam
Wood and wood product (W&WP) trade highlights
•According to Vietnam Office of Customs, in November 2024, Vietnam’s W&WP exports reached US$1.55 billion, up 27 percent compared to November 202 of which WP exports accounted for US$1 billion, up 15 percent compared to November 2023.
In the first 11 months of 2024 W&WP exports were valued at US$14.8 billion, up 22 percent over the same period in 2023; WP exports contributed US$10.1 billion, up 23 percent over the same period in 2023.
•Imports of raw wood in November 2024 were 532,800 cubic metres, worth US$165.2 million, up five percent in volume and five percent in value compared to October 2024.
Compared to November 2023 imports increased by 27 percent in volume and 19 percent in value.
In the first 11 months of 2024. imports of raw wood were at 5.18 million cubic metres, worth US$1.65 billion, up 26 percent in volume and 19 percent in value over the same period in 2023.
•Following three consecutive months of decline NTFP exports in October 2024 recovered reaching US$61.09 million, up 21 percent compared to September 2024 and up six percent over the same period in 2023.
In the first 10 months of 2024 NTFP exports were valued at US$656.06 million, up 10 percent over the same period in 2023.
•W&WP exports to the EU in November 2024 amounted to US$55 million, up 15 percent compared to November 2023.
In the first 11 months of 2024 exports of wood and wood products to the EU earned US$492.4 million, up 25 percent over the same period in 2023.
•In November 2024, bedroom furniture exports brought in about US$191.5 million, up 29 percent compared to November 2023. In the first 11 months of 2024 the exports of bedroom furniture earned US$1.9 billion, up 29 percent over the same period in 2023.
Wood exporters could leverage trade deal with UK
The UK-Vietnam Free Trade Agreement (UVFTA) is one of the key drivers boosting the growth of Vietnam’s timber and wood product exports to the UK, industry experts have said.
According to the Vietnam Timber and Forest Products Association (VIFORES), exports to the UK are expected to be worth US$230 million in 2024, up from US$195 million in 2024. In the first 10 months of 2024, they were worth US$182.1 million.
The association said the trade deal, which took effect in 2021, has positively impacted the wood industry due to preferential tax rates that will move towards zero percent in five years for all wood products.
Vietnam’s timber and wood products hold a competitive advantage over those from other countries exported to the UK, it said.
Ngo Sy Hoai, VIFORES’ Vice President and Secretary General, said while exports to the UK are modest compared to overall exports (estimated at US$16 billion in 2024) the UK is an important export market of Vietnam’s wooden products accounting for 40 percent of the country’s exports to the EU27.
"We view the UK market as a gateway to Europe. If we can export extensively to the UK, we can confidently enter other markets as the UK has stringent requirements regarding quality, design, and environmental standards. Vietnamese businesses have met these requirements successfully, with no safety warnings from this market."
The department underscored that globally, the UK ranks among the top five importers of wooden furniture. However, Vietnamese furniture products have a very small share of that market, meaning considerable opportunities remain for Vietnamese exporters.
The UK’s accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in 2024 would pave the way for even more opportunities, it said.
Despite these opportunities, the department and Hoai caution about challenges when exporting to the market since it has strict environmental and quality requirements.
To overcome them and seize opportunities arising due to the UKVFTA, the department said Vietnamese wood exporters should adopt appropriate strategies and understand the UK market.
They should focus on quality and design and on improving production technologies to meet the stringent requirements there.
According to Hoai, to further leverage the trade deal, Vietnamese businesses need to focus on product design and developing their brands.
Exports of wooden products with proprietary designs account for less than 10 percent, he said.
The EU Deforestation Regulation is expected to be enforced similarly in the UK. Businesses must prepare to meet traceability and accountability requirements to ensure their products do not cause deforestation or forest degradation, he said.
At a recent seminar, Vu Viet Thanh of the Ministry of Industry and Trade's European-American market department advised Vietnamese businesses exporting to the UK to thoroughly research market information and their potential partners to avoid fraud and scams.
Thanh said, to help Vietnamese businesses effectively leverage free trade agreements, the European-American market department would strengthen dissemination of information and training to raise awareness among the business community of sustainable development, green production and brand building.
The department would persuade trade partners to remove barriers to market access, provide support and guidance to businesses for adapting quickly and effectively to changes in market requirements and standards and intensify trade promotion, particularly by leveraging distribution channels, to take Vietnamese goods to sourcing groups worldwide.
China
Prospects and market demand for rubberwood
The "2024 Rubberwood Global Industry Chain Innovation and Development Matchmaking Conference" was held in Nanning, Guangxi Zhuang Autonomous Region and the "2024 Annual Meeting of the National Innovation Alliance of Rubberwood and Products under the National Forestry and Grassland Administration" was held at the same time.
China is one of the world's largest rubberwood consumers, but domestic rubberwood production cannot meet market demand so a large volume is imported.
Thailand is one of the main sources of China's rubberwood imports and the value of trade in rubberwood and products between China and Thailand has stabilised at about USUS$2 billion over the past five years. China also imports some rubberwood from Indonesia and Malaysia.
China's rubberwood imports have steadily increased in recent years and it has become the largest single category of imported sawn hardwood accounting for nearly 50 percent.
From January to September 2024 China imported 3.83 million cubic metres of sawn rubberwood, an increase of 16 percent over the same period of 2023. Imports of rubberwood veneer was about 128,000 tonnes, a year-on-year increase of 85 percent.
The following innovations have been developed in the rubberwood industry in China. These new materials, new technologies and new equipment have greatly improved the utilisation rate and added value of rubberwood.
Innovations in processing technology such as CNC engraving and laser cutting are widely used in the production of rubberwood products leading to improved production efficiency and offering opportunities for unique designs.
In addition, the surface of rubberwood veneer has been enhanced through the use of coatings and UV isobaric paste processes.
Today rubberwood can be made more durable with technology that is more environmentally friendly and safer. Heat treatment technology, resin impregnation technology, compaction technology and modification technology of rubberwood have improved product performance and expand possible applications.
In order to develop the rubberwood industry, China established the Rubber Wood and Products Innovation Alliance in 2023. The alliance currently has more than 100 enterprise members and released the "Rubberwood Industry Chain Development Report 2024".
Experts predict that consumption and demand of China's rubberwood will continue to grow.
Canada Wood strengthens cooperation with China
Given the growing potential for Canadian Wood products to play a significant role in China's construction market, Canada Wood has a strategic focus promoting mass timber and hybrid construction in China with the signing of three pivotal memoranda of understanding (MoUs) with key stakeholders recently.
These agreements are with Treezo Group, East China Architectural Design & Research Institute (ECADI) and the National Center for Technology Innovation-Green Building (NCTI-GB).
The National Center for Technology Innovation–Green Building (NCTI-GB), endorsed by the Ministry of Housing and Urban-Rural Development (MOHURD) and the Ministry of Science and Technology (MOST) is a national platform focused on decarbonising construction and promoting green building technologies.
A MOU between Canada Wood and the NCTI-GB underscores a commitment to joint efforts in resource sharing, technical exchange, and the development of standards and demonstration projects.
This collaboration is poised to drive advancements in mass timber construction, with a shared goal of establishing wood as a key component in China’s green building agenda.
According to MoU the two entities will carry out cooperation in the exploration of hidden carbon in buildings, the promotion of modern wood structure technology, the promotion of demonstration projects and information support, jointly promote the development of bamboo and wood construction industry and make positive contributions to global green and low-carbon development.
Booming wood products trade between China and Canada
Imports
China's imports of wood products from Canada have mostly increased between January and October 2024. China’s log imports from Canada rose 26 percent to 1.02 million, sawnwood imports from Canada grew one percent to 1.11 million cubic metres between January and October 2024.
China’s plywood imports from Canada surged 556 percent to 577 cubic metres over the same period of 2023. China’s particle board imports from Canada soared 53 percent to 102 tonnes over the same period of 2023.
In contrast, China’s fibreboard imports from Canada dropped 98 percent sharply just to 0.8 tonnes between January and October 2024 and China’s furniture imports from Canada plummeted 66 percent to USUS$102,000 between January to October 2024.
Exports
China's exports of wood products to Canada expanded between January and October 2024. China’s plywood exports to Canada rose 26 percent to 312,000 cubic metres over the same period of 2023.
China’s particleboard exports from Canada grew nine percent to 2,900 tonnes over the same period of 2023 and China’s fibreboard exports to Canada increased 26 percent to 97,800 tonnes between January to October 2024.
China’s furniture exports to Canada rose 10 percent to USUS$690 million between January and October 2024. In contrast, China’s sawnwood exports to Canada fell 33 percent to 1,041 cubic metres over the same period of 2023.
Surge in plywood imports from Russia
According to China Customs, plywood imports from Russia, the largest supplier, surged nearly 260 percent between January and October 2024.
The value of plywood imports from Russia also rose 32 percent to USUS$148 million over the same period of 2023.
94 percent of China’s plywood were imported from Russia between January to October 2024 and China's plywood imports from Russia have risen sharply leading to an overall rise in total plywood imports.
China’s plywood imports totalled 735,000 cubic metres, surging over 700 percent between January and October 2024. Plywood imports from Vietnam and Sweden surged nearly 4,700 percent and 350 percent respectively between January and October 2024. China’s plywood imports from Indonesia also rose 30 percent largely.
Rise in plywood exports
According to China Customs, plywood exports totalled 10.776 million cubic metres, up 23 percent between January and October 2024. The biggest increase was in plywood exports to Taiwan up nearly 170 percent over the same period of 2023.
China’s plywood exports to the Philippines, the top market destination, rose three percent to 815,000 cubic metres. In contrast, China’s plywood exports to Japan and Nigeria decreased three percent and 11 percent respectively between January and October 2024.
Plywood exports pivot to Asian countries
The US was the main international market for China’s plywood in the past. Since the US imposed tariffs on Chinese plywood export-oriented plywood enterprises have diversified marketing.
According to China Customs, between January and October 2024, 50 percent of China’s plywood was exported to Asia a year-on-year increase of 19 percent to 4.99 million cubic metres. Asia was the second largest plywood export market.
First log "insurance + futures" project in Guangxi
It has been reported that the first log ‘insurance + futures’ project has been established in Guangxi Zhuang Autonomous Region.
The production of logs in Guangxi Zhuang Autonomous region ranks first in China, accounting for nearly 40 percent of the national total.
The launch of the futures project is an active attempt to support the services of "agriculture, rural areas and farmers" and provides a new tool for risk management for log producers, helps them lock log prices, transfers market price risks, boosts confidence, ensures the stability of income and helps improve the resilience of the industry and promote the overall development of the industry in the region.
EU
EU tropical wood import quantity heading for an historic low
Total EU27 imports of tropical wood and wood furniture of 358,100 tonnes in the third quarter of 2024 were down four percent compared to the previous quarter and 10 percent less than in the same quarter in 2023.
The latest figures mean that imports in the last four quarters, averaging around 350,000 tonnes, have been well below the long-term average of closer to 450,000 tonnes.
In the first nine months of 2024, the EU27 imported 1,066,400 tonnes of tropical wood and wood furniture, 14 percent less than the same period in 2023.
In quantity terms, EU imports of tropical wood and wood furniture products in 2024 look set to be at the lowest annual level ever recorded since the EU was first formed (as the EEC) in 1957.
The trade figures look healthier when considered in value terms. EU27 import value of tropical wood and wood furniture in the third quarter of 2024 was US$763 million, five percent less than the previous quarter and just 0.7% down on the same quarter in 2023.
In value terms, EU27 tropical wood product imports are at the same low, but broadly stable, level prevailing between 2013 and 2019.
In the first nine months of 2024, the EU27 imported tropical wood and wood furniture with total value of US$2284 million, nine percent less than the same period in 2023.
OECD forecasts slow growth in Europe
The latest edition of the OECD Economic Outlook published on 4 December 2024 forecasts growth of 0.8 percent in the eurozone in 2024, up from 0.5 percent in 2023 and then rising to 1.3 percent in 2026 and 1.6 percent in 2028.
Although the forecast recovery is some cause for optimism, both the current rate of growth and the speed of recovery is slower than in all other major economies except the UK and Japan.
The forecast was also prepared before recent political events in France further dampened growth prospects in the eurozone’s second largest economy.
OECD note that while consumer confidence has been rising again in the EU and the housing market is beginning to show signs of recovery in a few countries such as Spain and France, industrial production and real business investment are still largely stagnant across the region.
Amongst EU economies, Spain and the Netherlands are highlighted as having experienced relatively robust growth.
In Germany, OECD note that while quarterly output rose slightly in the three months to September 2024, weak sentiment continues to weigh on investment activity. Germany's economy is projected to stagnate in 2024 and grow by 0.7 percent in 2025 and 1.2 percent in 2026.
On prospects for the eurozone economy, OECD suggest that lower interest rates and ongoing spending of the Recovery and Resilient Facility funds will support investment, while private consumption growth will benefit from tight labour markets and further disinflation.
However, moves towards a more restrictive fiscal stance—necessary to reduce historically high budget deficits—will dampen growth in some member states. OECD project that core inflation in the eurozone will fall from 2.9 percent in 2024 to 2.4 percent in 2025 and 2.0 percent in 2026.
This will provide space for the European Central Bank to reduce interest rates to boost growth.
The OECD forecast of eurozone growth takes account of political uncertainty in Germany after the failure to conclude negotiations on the 2025 budget and the fall of the coalition government in November.
However, the forecast came before the collapse of the French government on 4 December 2024 after Prime Minister Michel Barnier was ousted in a no-confidence vote.
As things stand therefore, neither France nor Germany, the EU's two largest economies which together account for over 40 percent of the bloc's GDP, has a sitting government.
Germany is expected to hold a federal election on 23 February 2025, but in France there can be no new assembly elections until at least twelve months after the snap election held in July 2024.
This political vacuum at the heart of the EU may hamper efforts to address Europe's burgeoning deficits and falling competitiveness. The recent collapse of governments in both countries was driven by deep political divisions over fiscal policy. With the political landscape increasingly polarised, whoever forms the new government in each country will likely face difficulties pushing necessary tax and spending proposals through.
Even before the ink was dry on the OECD's forecast of 0.9 percent GDP growth in France in 2025, and one percent in 2026, forecasters were revising down their numbers in response to the political crisis.
According to an article in the Times of London, "the French economy is unlikely to collapse but will have to pull out the stops to grow by 0.5 percent in 2025".
Continuing slow recovery in EU27 tropical wood furniture imports in Q3 2024
After a very slow start to 2024, EU wood furniture imports from tropical countries continued to make up lost ground in the third quarter.
In the first nine months of the year, the EU27 imported 217,300 tonnes of wood furniture from tropical countries with a total value of US$914 million.
Import quantity and import value were up seven percent and four percent respectively compared to the same period in 2023.
In the first nine months of 2024 compared to the same period in 2023, EU27 import value of wood furniture increased from Vietnam (+12% to US$385.1 million), India (+12% to US$195.0 million), Malaysia (+20% to US$68.9 million), and the Philippines (+2% to US$6.2 million).
However, import value fell from Indonesia (-12% to US$240.5 million), Thailand (-32% to US$10.6 million), and Mexico (-20% to US$2.6 million). EU27 wood furniture imports from all other tropical countries were negligible during the period.
