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Report
from the UK Early winter disrupts timber sales Winter has arrived to UK with snow and very cold temperatures over most of the country which will disrupt the building trade and timber sales. Export order books have improved according to the Confederation of British Industry (CBI)¡¯s industrial trends survey, but weak domestic demand means total orders are in the doldrums. House prices remained unchanged in November according to the Nationwide Building Society bringing annual inflation down to 2.4% from 3 8% in October. Certified plywood hard to sell After a long delay, Indonesian plywood mill PT Tijpa Rimba Djaja could at last managed to sell its FSC certified plywood in the UK. However, it will attract 7% import duty, which appears contradictory when Malaysian plywood only attracts 3.5% whether it is certified or not. The UK agent remarked that it is hard to compete in the UK, where most customers are not willing to pay for environmental quality. Analysts believe most UK traders prefer to source cheaper supplies from China and Malaysia. The kiln drying sector expects to be badly hit in the coming months and imports of kiln dried stock may increase in quantity and price. UK furniture imports growing 15% annually UK furniture imports amounted to ?5.3 billion in 2004, up 14.4% from 2003. Over the period 1998-2004, furniture imports increase an annual average of 15%, a trend that seems to hold in 2005. Among the Western European countries (EU-15 + Switzerland and Norway) the UK is the second largest furniture importer after Germany with 18% of total furniture imports. UK¡¯s furniture imports come mainly from Italy, China, Germany, Poland and Denmark. According
to CSIL¡¯s forecast, the real growth of furniture demand in the UK will
be 2% in 2005 and 2006. A considerable quota of this demand will be
accounted for by imported furniture. Log
Prices in the UK
Sawnwood
Prices in the UK
*When
last available Plywood
and MDF in the UK
*When
last available Report
from the Netherlands Mixed signs in the Dutch economy There are mixed signs in the Dutch economy. While economic growth declined slightly from 1.3% in the second quarter to 0.9% in the third quarter of 2005, the unemployment rate and number of bankruptcies shrank. There is also a modest increase in the willingness to spend, particularly in small consumer items. Gerutu, substitute of cambara, also in shortage Supply disruptions in Brazil, resulting from crackdowns on illegal logging, continue to affect delivery of many Brazilian timbers and timber products to the Dutch market. Therefore the pressure on Malaysian gerutu (Parashorea spp) as substitute of cambara remained high. But the supply of gerutu is rapidly declining as a result of the monsoon in Malaysian timber production areas. Several Dutch traders looked for other alternatives but their efforts where unsuccessful due to several reasons: limited stocks of some species such as urat matah due to the rainy season in Peninsular Malaysia and Sabah; alternative species such as membatu are more expensive; and alternative species are not suitable for certain applications. Mersawa, for example, is slow drying (1¡±-strips take 3-4 months in the kilns to reach a moisture content of 18-20%) while sepetir is prone to twist and gerongang is too soft. DRM prices holding firm With the production of sawn timber being seriously handicapped by the monsoon, exporters in Peninsular Malaysia are holding prices firm for Dutch sizes of dark red meranti (DRM). Merbau prices, in contrast, have eased slightly due to lesser interest and improved iroko supply from Africa. Although the Dutch market is not so active, CNF prices for DRM PHND of the main size 3x5¡± tend to increase. Exporters cannot draw supplies from important states at the east coast of Peninsular Malaysia while floods and closed roads make logging extremely difficult. This situation will linger on for a while since the monsoon will be followed by the celebration of the Chinese New Year at the end of January. Malaysian shipments slowing down Many exporters are reluctant to deliver timber to the stagnating Dutch market since the Dutch timber sector will not replenish stocks on a large scale as the Christmas leave approaches. Exporters will probably wait till springtime when the Dutch market shows signs of recovery and better demand underpinned by increased building activity now underway. In the meantime, for certain items that are in acute shortage, some special purchase arrangements are made. For buyers wanting 4¡± thick DRM (currently in fair demand), some Malaysian exporters propose to combine 12 tons of 4x5¡± with 12 tons in a cross section of a less demanded size to make up a full container load (FCL). As the Christmas season nears, some traders in the Netherlands continue to lower sale prices probably hoping to boost sales. The fact of the matter is that the market remains very quiet and will certainly remain flat in coming weeks. Price eroding has only led to lower sales prices, lower margins and hardly extra turnover as a result of which stocks are not coming down significantly. No good substitutes for bangkirai anti-skid The supply of bangkirai and selangan batu from Sabah remains extremely restricted and the situation has been worsened by the monsoon rains. Further orders of substitutes such as bilinga anti-skid from C?te d¡¯Ivoire have been reported. Although this species is not the first choice for anti-skip use in outdoor applications due to the timber¡¯s proneness to split, importers do not have a better alternative to bangkirai. The material must be available in importers¡¯ yards by the latest end February/early March for timely onward delivery to garden centres as the gardening season starts in spring. Sawnwood
prices in the Netherlands
1
ton of 50 Cu.ft. = 1.416 m3; PHND= Pin hole no defect grade. Okoum¨¦ plywood prices in the Netherlands
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Abbreviations
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Source: ITTO' Tropical Timber Market Report |
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