The past year, 2023, was tough for our industry, especially for our Asian customers who faced challenges with low export orders, particularly at the start of the year.
On a brighter note, orders from the US for goods made in Southeast Asia have slightly increased. This is due to lower stocks held by US furniture retailers. We are hopeful that things will improve in the coming year.
There is an expectation that the US Federal Reserve will reduce interest rates, leading to increased housing growth and a higher demand for timber products.
Although Europe is currently experiencing economic standstill, there is hope that some European countries will also cut interest rates, resulting in an increased interest in timber products.
However, political instability in countries like Germany and the Netherlands may affect economic growth.
Last year marked the warmest on record, about 1.5 degrees C warmer than any previous year. This has led to a growing demand for climate control, putting more pressure on global forestry practices.
The demand for plantation resources continues to rise, impacting natural tropical timber. It is anticipated that there may be a total ban on harvesting natural-grown tropical timber within the next 10 years.
On a positive note, the demand for wooden garden products is increasing due to global warming.
Indonesia and Vietnam are expected to experience the highest growth in the production and export of wooden furniture and other wooden exports. India, and possibly Bangladesh, will also become important players.
Although China remains significant, domestic economic issues and political restrictions may reduce the manufacturing of lower-value yet labour-intensive wood products.
The sea freight reached pre-Covid-19 levels late last year, but the recent Red Sea security issues has led to a three-fold increase and, it seems, higher rates are to be expected.
The alternative route around Africa last longer and more vessels are required. Seems that the liners are yet again taking full advantage of any possible reason to increase rates to totally unjustifiable levels.
In conclusion, 2024 will present its own set of challenges, but we are optimistic and expect it to be a much better year compared to 2023.
