Tropical Timber Market Report

As a possible new wave of the Covid-19 pandemic looms with the weather turning colder in certain regions, business performance in the woodworking sector took a surprising turn for the better with more orders. At the same time, timber supply is becoming much more limited. ITTO shares more about the latest happenings in the global market.

 Malaysia

Inter-state and inter-district travel prohibited as infections spread

Most of Malaysia has been placed under a Conditional Movement Control Order (CMCO) as cases of Covid-19 are increasing. 

The Ministry of Health has reported an increase in positive cases as well as the rate of infections in Kedah, Penang, Perak, Negri Sembilan, Melaka, Johor and Terengganu.

The East Malaysian states of Sarawak and Sabah are also under CMCO. Inter-state and inter-district travel is prohibited and the CMCO will last a month in Peninsular Malaysia and two weeks in East Malaysia.

 

Furniture sector to generate higher earnings in the second half of the year

The furniture sector has managed to perform well despite the pandemic and has attracted the attention of analysts.

The furniture sector is the subject of a recent report. Malaysia’s furniture industry is expected to generate higher earnings in the second half of the year as it can take advantage of the US-China trade tension and demand for work-from-home furniture. 

Since the US imposed additional tariffs on Chinese goods, Malaysia’s furniture exports to the US have risen.

 

Advancing industrial tree plantations

A two-day seminar themed ‘Advancing Sustainable Forestry through Aggressive Industrial Forest Plantations’ was held in Miri, Sarawak. It involved some 200 participants who represent various government departments and agencies, institutions of higher learning and License for Planted Forests (LPF) holders.

The seminar had four plenary sessions; Development in International Forest Plantations, Development of R&D in Sarawak, Community Involvement, Technology and Certification and Potential Industrial Tree Species.

The event also attracted ‘virtual participants’ from Sabah and Peninsular Malaysia. Four virtual presentations from China, Indonesia and Sabah were broadcast via Zoom.

The Sarawak Forestry Department Director, Hamden Mohammad, said the establishment of plantations to be advanced quickly and that R&D will be strengthened and advanced technologies will be identified and promoted to ensure productivity and profitability of investments in plantations.

In related news, the Chief Minister of Sarawak called upon all companies holding Licenses for Planted Forest (LPF) to not work in isolation but to share their experiences for the betterment of industrial plantation development in Sarawak

 

Sustainability, digitisation, innovation crucial for timber industry

A leading Malaysian economist says timber-based manufacturers should focus on long-term gains rather than short-term demands in emerging from the COVID-19 pandemic. Lee Heng Guie, the Executive Director of the Socio-Economic Research Centre, the think-tank of the Associated Chinese Chambers of Commerce and Industry of Malaysia (SERC), made the comments during the ‘An Economics Affair’ webinar on October 8.

Mr Lee said that although economies in many ASEAN member countries have slumped due to the pandemic, the rising stars of Viet Nam, Indonesia and the Philippines are showing great economic potential. Malaysia’s economy is moving towards the early stages of recovery, having stabilised from initial demand and supply shocks at the onset of the pandemic. 

Although a global economic recovery is also underway, its strength is dependent on the future path of the virus, how well it is contained, and the availability of a vaccine.

Mr Lee said that Malaysia’s timber industry, which continued operating even during the Movement Control Order (which was implemented by the federal government on March 18, 2020 as a preventive measure against the virus), had benefited from increased demand for home-improvement-based products.

Mr Lee said that the industry could take a longer-term perspective, and it was vital for industry players to produce more sustainable products; incentives should be provided to encourage the manufacturing of such products.

In his presentation, the Malaysian Timber Council (MTC)’s Wong Kah Cane said that, if the timber industry is to maintain its stake in the nation’s economic pie, it needed to transform its business operations to centre on digitalisation, technology, innovation and branding.

Mr Wong referred to a study on information and communication technology readiness among timber-based companies, which MTC had commissioned from SERC. The study’s preliminary findings indicated that only 22 percent of surveyed companies had placed digital technology as a top priority for growing their businesses, while 57 percent considered innovation and digital technology as important but not urgent. Only 25 percent of businesses had integrated ecommerce into their business models.

 

Home furniture in demand

The government’s stay-at-home notice in the face of Covid-19 had prompted a shift in customer preferences in furniture and homeware, according to Johor Furniture Association president Ong Yeou Huan.

Speaking in early October, Mr Ong said that demand had increased in the last four months for home-office furniture as well as ready-to-assemble furniture. Ong said that Johor’s furniture industry, which accounts for some 70 percent of Malaysia’s furniture production, also saw increased global spending on furniture, with exports of such goods up by 12.1 percent in July (to MYR 1.51 million) compared with June (MYR 1.34 million). 

Johor state is home to about 1,000 furniture producers, mostly in Muar, said Mr Ong.

 

Republic of Korea likely to maintain anti-dumping tariff on plywood

The Republic of Korea’s Trade Commission has made a preliminary decision to extend anti-dumping duties on Malaysian plywood for another five years. 

The Star reports that the commission concluded that the elimination of existing tariff barriers would enable the dumping of Malaysian plywood on the local market, thus hurting the Korean plywood industry.

With the decision, the Republic of Korea will impose antidumping tariffs on Malaysian plywood of 4.73–38.1 percent. The commission has notified the Finance Ministry of its decision, and the latter will make a final decision in November.

 

Indonesia

Furniture and handicraft exports to US and EU beat expectations

Indonesia continues to see growth in wood product exports to the US despite the impact of the global pandemic. The Minister of Environment and Forestry has indicated that exports to the US rose around 16 percent year-on-year in the period January to October 2020.

The good performance of Indonesia’s wood products sector is not confined to exports to the US as January to October exports to the EU were also higher by around 10 percent year-on-year.

Indroyono Soesilo, Chairman of APHI (Asosiasi Pengusaha Hutan Indonesia), applauded the changes in tax and non-tax regulations introduced by the government in order to contribute to increasing exports.

For example, the government has lowered the export duty on exports of from 15 percent to five percent. In addition to relaxing tariffs, the government has adjusted regulation and duties on processed merbau, white meranti and yellow meranti. 

The Furniture and Handicraft Association has indicated that output from the furniture sector is recovering despite the ongoing impact on demand of the pandemic. This is in contrast to the situation in the first quarter of the year when orders collapsed.

Regina Kindangen from HIMKI said that the Association members appreciated the stimulus measures provided by the government to SMEs in the home decor and furniture sectors.

Regina continued saying SMEs are currently experiencing better times even though Indonesia is experiencing economic recession as it sees consumers in the importing countries have a high degree of willingness to spend on furniture and handicrafts. 

The domestic sector should get a boost from adoption of the Omnibus Law through which the government intends to reduce imports of goods that can be made domestically.

In related news, the Ministry of Trade has set a benchmark export price for processed meranti wood products. This determination was made after the Ministry of Finance amended export duties for certain dimensions of meranti.

 

Panel sector hard hit by pandemic

The Indonesian Wood Panel Association (Apkindo) has said the Indonesian wood panel industry has been is hard hit by the impact of the pandemic and forecasts that production this year will be down by nearly a quarter.

Panel production in the first nine months of the fell 24 percent to 2.35 million cubic metres. Adding to the concern of Apkindo is the decline in export prices. 

Gunawan Salim, speaking for Apkindo, noted the pandemic and heavy rains which disrupted harvesting and log transport drove down production levels. He suggested the pandemic will continue to impact production and demand throughout the second half of this year. Demand for wood panels, especially in the traditional Japanese market, has been trending down.

 

Another trade investigation may open door for Indonesia

The US government is currently conducting an investigation of Vietnamese wood product exports and the Indonesian Ambassador to the US, Muhammad Lutfi, said this was a good opportunity for Indonesian exporters to expand market share in the US.

The Ambassador reported that the Indonesian Embassy in Washington had created a mechanism to bring together US importers and Indonesian exporters.

 

Take advantage of GSP says Minister

The extension of the Generalised System of Preferences (GSP) facility announced by the US government in October is expected to drive increased rattan product exports to the US according to the Minister of Trade, Agus Suparmanto.

Indonesian rattan product exports in the first eight months of this year reached US$357 million a decline of four percent compared to the same period in 2019. The main export markets are the US with an export share of 41 percent, followed by the Netherlands (8%) and Germany (7%).

In related news the government is urging SMEs to take advantage of the GSP facility to increase exports to the US. The Minister of Cooperatives and SMEs, Teten Masduki, said the extension of the GSP facility by the US comes at a time when Indonesian SMEs need all the help they can get.

The Ministry will assist with international certification support including product certification by the US Food and Drug Administration (FDA) and the US Ministry of Agriculture. It will also offer incentives for SMEs whose products qualify for the GSP.

 

Ministry of Foreign Affairs supports furniture entrepreneurs to explore new markets

Exports of Indonesian furniture and handicrafts to Latin America and the Caribbean amounted to only US$38.4 million in 2019, which was 0.39 percent of the region’s total imports (valued at US$9.73 billion). 

The Ministry of Foreign Affairs will hold an online seminar on November 9-11, 2020 aimed at supporting furniture and handicraft manufacturers and exporters to tap into this largely unexploited market.

The participation of Indonesian entrepreneurs in the event is expected to increase Indonesia’s exports in the furniture and handicraft sector, as well as exports of Indonesian products in general, to the 33 countries in the Latin American and Caribbean region.

 

Furniture industry sees increasing demand trend

Export demand for Indonesian furniture and handicraft products is increasing in the last quarter of 2020, according to industry sources, largely because of the ongoing trade dispute between China and the US.

Deputy Chairman of the Association of Indonesian Furniture and Handicraft Industries Abdul Sobur said there had been an increase in orders since September 2020, especially from the US.

He said it was now more difficult for Chinese products to enter US markets, opening up space for others. “It is a good opportunity because US demand is increasing more compared to other countries,” said Mr Sobur.

 

Myanmar

Continuing impact of Covid-19

The economic impact of the second wave of the Covid-19 pandemic has been more severe on Myanmar businesses than the first wave, according to the latest World Bank survey of the private sector. 

The survey, the fourth in a series of eight planned, was conducted in September and covered 500 firms.

Despite COVID-19, domestic investments for fiscal 2019- 20 were more than Kyat 1.88 trillion, which is around Kyat 200 million higher than in the previous fiscal year. 

Approval was given to over 130 Myanmar businesses to invest in nine sectors during the period. The Bank report says in fiscal 2019-20, over 23,000 jobs were created as a result of Myanmar domestic investments.

 

Data release in transparency push

The Ministry of Natural Resources and Environmental Conservation (MONREC) website provides information on the conservation, forest governance and trade data for the past five years.

According to the information on the website there are 79,151 acres of private plantations, 111,490 acres of state-owned plantations and 519,250 acres of community forests. In addition, 1,292,486 trees have been replanted in the past three years.

From the available data it can be roughly interpreted that timber industries purchased logs at a value of around US$578 million from MTE and exported products at a value of US$882 million.

On November 12, the Myanmar Timber Enterprise sold about 4,100 tonnes of Inn-Kanyin logs and the price varies from US$500 to 735 per tonne.

 

MONREC issues order on teak tree ownership

Myanmar’s Ministry of Natural Resources and Environmental Conservation (MONREC) recently issued an order clarifying the ownership of teak trees. 

According to the order signed by Minister Ohn Win, teak trees in private plantations belong to those people and entities who have invested in them.

Under the Forest Law of 1992, teak trees planted and grown anywhere in the country are owned by the state, but this has been a point of contention for private plantation investment and community forestry.

The new Forest Law, enacted in 2018, enables the ownership of teak trees by individuals and organizations under certain conditions. If registered with the Forest Department, teak trees in community forests and the household compounds of individual citizens, and on any other private and public lands, will now belong to those relevant people or groups, according to the order. 

The change may pave the way for the use of teak trees as collateral for bank loans.

 

MONREC clarifies documents demonstrating legality

In another development, MONREC has issued a statement clarifying which documents will be available to demonstrate the legality of export consignments under Myanmar’s rules and regulations. 

According to Myanmar exporters, some competent authorities in the EU require all the documents listed in the chain-of-custody (CoC) dossier developed by MONREC in 2018.

According to the recently issued statement, the CoC dossier was published for the purpose of assisting international timber traders to legally complete the timber extraction, milling and marketing process in Myanmar, but it did not necessarily mean that all documents in the CoC dossier would be provided with export shipments.

According to the statement, timber from Myanmar is legal when accompanied by 14 documents in accordance with existing rules and regulations. The 14 documents comprise four from the Forest Department, eight from the Myanmar Timber Enterprise, one from the Trade Department and one from Customs. 

The statement urged EU operators to buy and import only timbers from Myanmar that meet the requirements of the European Union Timber Regulation.

 

European Chamber of Commerce signs investment MOU

Myanmar’s investment agency, the Directorate of Investment and Company Administration, has signed a memorandum of understanding with the European Chamber of Commerce with the aim of attracting more investment from the EU.

The signing comes as Myanmar drafts an economic reform and recovery plan to address the impacts of Covid-19.

The EU’s total investment in Myanmar reached nearly US$7 billion (MMK 9 trillion) in 2019, accounting for 8.6% of all foreign direct investment (FDI) in the country. 

The European Commission said trade between the EU and Myanmar reached €3.4 billion (MMK 5.2 trillion) in 2019. The EU accounted for 11 percent of Myanmar’s trade.

 

Foreign investment target achieved despite Covid-19 

According to the Myanmar Investment Commission, the country secured US$5.7 billion (MMK 7.3 trillion) in FDI in the 2019–20 fiscal year (which ended on September 30), up by US$1 billion (MMK 1.3 trillion) compared with the previous financial year.

Under the Myanmar Investment Promotion Plan, the government set a target to attract US$5.8 billion (MMK 7.46 trillion) in the 2019–20 fiscal year and fell short by US$110 million.

 

India

Consumer confidence sharply down

The Reserve Bank of India’s consumer confidence survey in September showed that for the third consecutive month more people were pessimistic about economic prospects.

The consumer confidence index was at a record low of 49.9 percent in September. 

The Ministry of Finance recently introduced measures aimed at lifting consumer spending, but economists have questioned if the new measures can spur long-term growth. 

One measure which could help the timber sector is the extensive, interest free long-term loans offered by the state governments for infrastructure spending.

According to Jahangir Aziz, head of emerging markets economics at JPMorgan “What India needs right now is income support so that when the infection becomes more manageable and restrictions are lifted, consumers and businesses would have the financial stability to borrow and invest.”

 

High freight rates and container shortage—Ministry in discussion with shipping lines

India’s Ministry of Commerce recently met with representatives of container shipping lines to discuss the current container shortage and rising freight rates. This comes close behind action by the US and Chinese authorities aimed lowering record high freight rates on the trans-Pacific route.

The Federation of Indian Export Organisations said freight charges have increased between 30-50 percent on some routes and that disruption of container movements, which caused a shortage of capacity, was partly to blame. In the period April-September 2020 India’s exports declined 17 percent while imports fell 35 percent.

 

Government to ‘disengage’ from forestry and environment institutions

The government is considering a proposal to disengage from five institutions currently under the Ministry of Environment and Forests after a review of 16 autonomous bodies under the ministry.

The Department of Expenditure, which conducted the review, recommended that the government phase out its budget support by 25 percent per year for the Wildlife Institute of India, the Indian Institute of Forest Management, the Indian Plywood Industries Research and Training Institute, the CPR Environment Education Centre and the Centre for Environment Education.

The proposal involves converting the institutes to autonomous institutions or deemed universities; under the plan, the Indian Plywood Industries Research and Training Institute would ultimately be largely funded by the plywood and panels industry.

 

Vietnam

Vietnam signs emissions reduction agreement

The Ministry of Agriculture and Rural Development (MARD) and the World Bank (WB)—the trustee agency of the Forest Carbon Partnership Facility (FCPF) have signed an Emissions Reduction Purchase Agreement (ERPA).

The FCPF will pay Vietnam US$51.5 million if the country fully implements its commitments, under which the north-central and central provinces of Thanh Hoá, Nghệ An, Hà Tĩnh, Quảng Bình, Quảng Trị and Thừa Thiên-Huế are to reduce CO2 emissions by 10.3 million tonnes in the period 2018-2024.

MARD must periodically report on the volume of emissions after it is confirmed by an independent international agency after which payments will be made for the purpose of developing sustainable forests and forestry land management.

Deputy Minister of Agriculture and Rural Development Hà Công Tuấn said the payment for results-based emissions reduction is part of efforts to implement the reduction of greenhouse gas emissions in line with the Reducing Emissions from Deforestation and Forest Degradation (REDD+) international framework.

 

Private sector commitment on development of Vietnam’s timber industry

On November 9, 2020, in Ho Chi Minh City, representatives of multiple associations signed the Commitment on Sustainable and Responsible Development of Vietnam’s Wood Industry. 

This Commitment represents a comprehensive package of actions toward sustainable and responsible development of the wood industry sector of Vietnam.

The associations that signed the commitment were; the Vietnam Timber & Forest Products Association and seven affiliated associations, including the Vietnam Timber and Forest Product Association, the Binh Duong Furniture Association, the Handicraft and Wood Industry Association of Dong the

Forest Products Association of Binh Dinh, the Handicraft and Wood Industry Association of Ho Chi Minh City, the Thanh Hoa Timber and Forest Product Association, the Vietnam Plywood Association and the Vietnam Wood Chips Association.

Vietnam has emerged as a major wood and wood product producer and exporter and the private timber sector players realise that timber legality assurance across the entire supply chain is vital to business development. 

In September this year, the government issued Decree No.102 regulating the implementation of the Vietnam—EU Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT).

With the signing of this Commitment Vietnamese timber enterprises have demonstrated determination to support government efforts to sustain Vietnam’s position as a leading producer and exporter of wood products. 

 

The document signed commits the signatories to:

•strictly comply with Decree No. 102/2020/ND-CP Decree (VNTLAS Decree) dated September 1, 2020 of the Government on Viet Nam Timber Legality Assurance System (VNTLAS) to assure all activities relating to importing, exporting, harvesting, transporting, buying, selling and processing of wood products are legally implemented

•support the Government of Vietnam in enhancing inspection and supervision of imported wood, especially tropical wood imported from risky/non-active geographic areas set out in the VNTLAS Decree

•request all members of the associations to strictly comply with VNTLAS Decree; absolutely not to use risky wood for manufacturing wood products to meet demands from local and overseas markets

•call on the corporate community to promote the use of locally planted wood and wood imported from low risk sources; priority is given to wood harvested in certified forest.

•promote the development of the domestic market in the direction of using legally sourced wood, enhance wood traceability, transition from risky imported wood to locally planted wood as well as that of wood products made of locally planted wood and low risk imported wood

•request the Government of Vietnam to issue a public procurement policy towards completely eliminating risky wood species from public procurement, giving priority to products made of plantation wood

•closely collaborate with related authorities to detect, prevent and avoid commercial fraud and investment circumvention in wood industry sector, solicit transparent and responsible trade and investment operations to generate higher value for the wood sector

•call on the business community and relevant stakeholders to join hands in building a sustainable forestry, enhancing the protection of natural forests, conserving biodiversity, encouraging the expansion of certified forest and supporting the development of improved livelihood for forest reliant communities

 

To proceed with the implementation of this Commitment, each association will develop a road-mapped Action Plan and allocate sufficient resources for its effective implementation.

 

These Action plans will include the following components: 

(1) Collaborate with State’s authorities to propose, counter-audit and implement related mechanisms and policies effectively;

(2) Advocate training and provide information for member businesses, encourage business association, including links with tree growers and micro-business households from wood villages;

(3) Coordinate with media and relevant stakeholders for long-term communication campaigns aimed at improving images of the wood industry in production, trade, markets and products development, contribute to promote the development of a responsible and legal Vietnamese timber industry and a sustainable forestry sector.

 

The leaders of the committed associations have reiterated their statement “WE SAY NO TO ILLEGAL TIMBER”. As an immediate step in the implementation of the Commitment and a joint effort to overcome the severe damage caused by the natural disaster in the central Vietnam in October to November this year, the signatories have decided establish Green Vietnam Fund.

 

Vietnam looks to tighten legality control on imported timber

The Vietnam Timber and Forest Product Association (Viforest) convened a seminar on October 16, on the identification and control of risks associated with exporting and importing Vietnamese wood products.

Participants heard that the development and activation of geographic origin and timber species risk categories will be important for ensuring the legality of imported timber.

To fulfil commitments under the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT), Prime Minister Nguyen Xuan Phuc issued Decree 102/2020/ND-CP on 1 September 2020 stipulating regulations for importing and exporting timber following a risk-based approach.

Under the decree, the management of imported timber will be based on the application of risk management measures to prevent, detect and promptly handle violations, ensuring that timber is imported legally and creating conditions that enable organizations and individuals to comply with the law.

Imported timber will be subject to criteria for categorising countries into positive or non-positive geographic regions and for identifying the types of timber considered risky to import into Vietnam.

At the seminar, Viforest chair Do Xuan Lap said building and activating a list of geographic region and species risk categories was necessary for maintaining and developing the industry and fulfilling the government’s commitments to the international community. 

In addition to timber from domestically planted forests, Viet Nam still imports raw materials, including from tropical countries in Africa as well as Cambodia, Lao PDR and Papua New Guinea.

 

Exports grow in 2020

Export revenue in the Vietnamese wood and wood products sector was US$7.3 billion in the first eight months of 2020, up by nine percent, year-on-year. 

Of this, wood product exports were valued at US$5.5 billion, up by 14 percent and accounting for 75 percent of the total (up from 71 percent in the same period in 2019).

The US was the top destination for Vietnam’s wood and wood product exports in the first eight months of 2020, at US$3 billion (up by 27 percent, year-on-year), which was 55 percent of total exports.

Exports grew by nearly 11 percent to both China and Canada in the same period. In contrast, exports to the UK and France declined by 35 percent and 15 percent, respectively.

Viforest pointed out that there has been a drop in office and bedroom furniture exports this year compared with the same period last year, but exports of kitchen and bathroom furniture have been on the rise.

Viforest Chairman Do Xuan Lap said that items with strong export growth are benefiting from the US antidumping and antisubsidy duties on similar Chinese products, which have encouraged US firms to switch to Vietnam to partly make up for supply shortages.

Nguyen Liem, Chairman of the Lam Viet JSC’s Board of Directors, said COVID-19 has also given a boost to the wood industry, especially kitchen cupboard and bathroom cabinet sales, because people are spending more time at home during the pandemic and thus have more demand for house repairs and furniture.

 

Imports decrease, improving the trade balance

Vietnam’s imports of wood and wood products in January–August 2020 were valued at US$1.5 billion, down by eight percent, year-on-year. At the end of August 2020, the country’s surplus of wood and wood product exports over imports was about US$5.8 billion.

FDI enterprises spent US$467 million importing wood and wood products into Viet Nam in the period January to August 2020 (down by five percent, year-on-year).

Thus, net exports by FDI enterprises amounted to US$2.5 billion over the period.

 

Vietnam imports more from China

China continues to be the top supplier of wood and wood products to Viet Nam, at US$475 million in the first eight months of 2020. This amounts to an increase of 30 percent, year-on-year, and accounts for 31 percent of Vietnam’s total wood and wood product imports, by value. 

In contrast, Vietnam’s wood and wood product imports dropped by 11 percent from the US, by nearly six percent from Thailand and by just over seven percent from France.

 

China

Log imports from State of Victoria banned

China has banned imports of logs from Victoria in Australia as of November 11, according to a notice on the Australian Department of Agriculture's website. 

This is because the quarantine service in China once again detected pests in a log shipment. Customs clearance for logs shipped from the state of Queensland after October 31, 2020 will not be cleared.

Since the beginning of this year, the Chinese customs has repeatedly detected live pests such as Cerambycidae and Buprestidae in logs imported from Australia.

In accordance with national quarantine laws and regulations the infected logs have been treated and the exporters notified of the non-conformance with international standards and required to investigate the causes and take improvement measures to avoid a recurrence.

 

Rise in the output of China’s wood-based panel

It has been reported that the output of China’s wood-based panel sector in 2019 rose three percent year-on-year to 308.59 million cubic metres. Production included 180 million cubic metres of plywood, 62 million cubic metres of fibreboard, 30 million cubic metres of particleboard and 37 million cubic metres of other wood-based panels (48 percent of which was blockboard). 

The domestic consumption of wood-based panel in 2019 increased year on year to just over one percent to 293 million cubic metres.

The rate of expansion of production capacity is slowing, panel supply is adequate and the structural reform of the wood-based panel sector is being vigorously pursued and this has seen a reduction in sales of low-quality panels.

 

Shortage of red cedar stocks

It has been reported that the domestic stocks of Thuja plicata Donn. ex D. Don (Western Red Cedar) is tight and only a few traders holding stocks. This situation is related to the increase in market demand. At present, domestic red cedar FAS shorts prices have been quoted at RMB6,000 per cubic metre while long FAS is quoted at RMB10,000 per cubic metre.

Because of the shortage, attention has turned to American cedar (Sabina pingii var. wilsonii). According to merchants downstream manufacturers like this cedar because of its price advantage and its scent is similar to red cedar. Cedar is favoured by a Guangxi coat hanger as there is a huge demand for coat hangers.

 

Paulonia trading centre

Zhuangzhai town is one of the main wood-based panel production bases and it is home to the national paulownia trading center and has a large paulownia export processing sector.

There are more than 600 enterprises of various types and 37 industrial enterprises with an output value of more than RMB20 million, employing more than 60,000 people and with an annual wood processing capacity of three million cubic metres.

 

Nankang Furniture and Imported Wood Exposition

It has been reported that more than 400 people gathered at the newly completed Ganzhou International Wood Distribution Center to participate in the 2020 China Furniture & Imported Timber Exposition held in Nankang district, Ganzhou City of Jiangxi Province.

The exhibition hall covers a total area of 18,000 square metres and the expo show cased imported timber from more than 50 countries. Nine wood exhibition booths were set up, including African timber, South American timber, North American timber, Southeast Asian timber, Russian timber, European timber, Canadian timber, Brazilian timber, New Zealand and Australia timber. A total of more than 100 precious timber species were be exhibited.

Ganzhou International Wood Electronic Trading Platform, which is a timber electronic trading platform using block chain technology attracted the most attention of exhibitors at the exhibition site. This will have a profound impact on the timber market in Ganzhou, South China and even the whole country.

 

New transport channel in eastern China improves timber import efficiency

The first ‘timber train’ from Zhangjiagang (Jiangsu province) to the Ganzhou International Dry Port arrived on September 29. The train was loaded with 40 containers, all of which contained wood imported through Zhangjiagang by Linsentai Furniture Ltd and other local furniture companies in Nankang. 

The goods were shipped using a new water–rail combination transport channel: from Zhangjiagang to Jiujiang Port by river, and then to the Ganzhou International Dry Port by train.

Zhangjiagang is a traditional port for imports of African and other timbers and one of the most important timber supply bases for the furniture industry in Nankang, a district situated in Ganzhou city, Jiangxi province. 

The new transportation channel has increased the ease of shipping African timber and marks a further transition from road transport to rail for timber imported via Zhangjiagang. The new channel will reduce costs and increase efficiency for furniture companies; increase the supply of imported wood; and assist the development of the Ganzhou Dry Port International Timber Trading Center.

Ganzhou International Dry Port is promoting the development of a national trading and distribution centre for imported timber, and it held the Imported Timber Expo in October. Cooperation among ports such as Shenzhen, Guangzhou, Xiamen, Ningbo and Zhangjiagang is expected to open up further logistics channels for the importation and distribution of timber in China and help create a hub for timber import and trade businesses close to the port, with benefits for a wide range of wood consuming sectors.

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