Page 22 - FDMAsia MayJun 2025

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ITTO TROPICAL TIMBER MARKET REPORT

The threat of US tariffs is causing some countries to rethink their strategies going forward,
especially in making their companies more competitive and accelerating new trade agreements.
ITTO tells us more about the latest developments in the market.

MALAYSIA Major player exits timber business
Ministry sole issuer of Certificates of Origin WTK Holdings, one of the ‘big six’ groups of timber companies
The Ministry of Investment, Trade and Industry (Miti) will, with in Sarawak, is exiting the timber business and according to
immediate effect, be the sole issuer of Certificates of Origin the domestic press will shift its focus to more commercially
(CoO) for exports to the US. sustainable and profitable business segments.
This move comes as Malaysia works to prevent illicit trans- The local media has reported the group aims to prioritise
shipment through Malaysia. Issuance of such certificates by its plantation and food operations.
business councils, chambers or associations appointed by ASEAN-Australia-New Zealand Free Trade Area upgrade

Miti has ceased. The upgrade of the ASEAN-Australia-New Zealand Free
The move tightens the control over the documents that Trade Area (AANZFTA) in April strengthens Malaysia’s economic
prove the origin of goods for customs or trade requirements. resilience in an increasingly competitive regional market which
The decision follows reports that certain exporters may has a combined gross domestic product exceeding US$5.6
have used Malaysia as a trans-shipment hub to bypass US trillion and a population of more than 700 million.
tariffs on third-country goods. The latest Agreement offers an opportunity to reduce
The extent of Malaysia’s involvement in trans-shipment transaction costs, support the digitalisation of trade, strengthen

activities is still being quantified but Miti is taking back the supply chain resilience and trade and investment. The AANZFTA
power to issue CoOs. has been a vital part of Malaysia’s regional trade strategy
Miti said it will also enhance audits on applicants of since its entry into force in 2010.
certificates of origin, investigate and take the necessary action
in collaboration with the Royal Malaysian Customs Department Pivot towards conservation
to curb any offences. Sarawak is now shifting its focus from timber extraction to
Exporters are said to be unsure if the criteria for getting forest conservation and developing environment-based revenue
a certificate of origin have changed after the Ministry of streams, said Sarawak Forestry Department Director, Hamden
Investment, Trade and Industry (Miti) took over as the sole Mohammad.

issuer replacing chambers of commerce. He said this shift was crucial as Sarawak moves to
transform its forestry sector through more sustainable and
Mattia Pancirol technology-driven methods in line with the Post Covid-19
Development Strategy 2030.
“More than 50 years ago timber was the State’s main
source of income. However, we are now prioritising forest
conservation and looking for new ways such as carbon trading

and payment for services that do not affect the existing
ecosystem,” he said.