KUCHING: The ITTO Tropical Timber Market (TTM) Report stated that the monsoon season continued to hamper log supply in Sarawak, driving prices upwards.
According to the report, prices were expected to remain high until Chinese New Year in early February, following which log production was expected to resume to normal. The other factor pushing prices higher was the continuing strong demand from China and India.
China’s demand for logs had increased worldwide since Russia, China’s largest log supplier, imposed an export tariff on log exports. India’s demand might be attributed to a steady rise in corporate capital expenditure for the most part of 2010.
In addition, this rise in corporate capital expenditure was expected to continue into this year.
Prices of plywood from Sarawak surged eight per cent to 14 per cent in 2010 on the back of sustained demand from Japan which increased 12.1 per cent in the first 10 months of last year compared with the corresponding period in 2009.
Plywood manufacturers were optimistic that 2011 would be a profitable year if the current price levels were maintained or improved. They were also optimistic that the housing starts in 2011 in Japan would be strong enough to support current price levels.
For the record, Japan housing starts in 2010 rose 20.4 per cent in August, 17.7 per cent in September and 6.4 per cent in October, vis-a-vis the same months in 2009. Meanwhile, building permits for October 2010 increased by 3.4 per cent compared with the same month in the previous year.
However, Japan’s housing starts and building permits in 2010 remained far behind the levels recorded in 2008.
In support of the local timber industry, the Sarawak Forestry Department was likely to extend the 50 per cent log export quota which was expiring middle of this year.