Malaysia’s timber sector could be entering a boom period due to rising prices and strong demand from China, India and Japan, according to analysts.
Prices have been boosted by an economic recovery in Japan, coupled with China looking for alternative suppliers of tropical and softwood logs following Indonesia’s cut of export quotas to curb illegal logging.
The International Tropical Timber Organisation (ITTO) said plywood prices had risen by 25.8% between December 2003 and August this year, while log prices had jumped 10.3% during the same period. And analysts predict prices to remain buoyant until 2007.
A recent ITTO report estimates that China needs 70,000m2 of wooden flooring and 50,000 timber doors for its sports venues in preparation for the 2008 Beijing Olympics. Hotels will require about 31,000 doors and five million m2 of flooring.
Chinese demand is expected to cause a log and plywood supply shortage for other countries, driving prices up further.
Threats to Malaysia’s timber industry include higher freight charges, competition from softwood plywood and a possible dip in Japan’s economy.
