Sarawak's Plywood Prices Are Expected to Firm up Again

KUCHING: Sarawak's plywood prices are expected to firm up again as Japanese importers have resumed buying for reconstruction activities after March's devastating earthquake and tsunami. Sarawak Timber Association panel products' committee chairman Wong Kai Song said new orders from Japanese plywood importers had continued to come in. With the exception of general plywood, the overstock situation of floor-based plywood and other panel products in Japan had been adjusted in the past few months, he added. “The demand from Japan will continue to improve and we expect to see some improvement in our plywood prices this month. “Next year will be a good year with greater demand, ” Wong told StarBiz. He said the average plywood prices had dropped by 10% to between US$560 and US$580 per cu m now compared with US$600 and US$630 per cu m in the third quarter. Plywood fetched an average of US$400 per cu m before the price was pushed up sharply by aggressive buying from Japanese importers after the earthquake. Most Japanese importers halted new orders or slowed down buying between June and September due to high inventories following aggressive buying in the April-June period. Actual demand for timber for reconstruction was not as strong as earlier anticipated due to the longer time taken to clear up the mess after the disaster. AmResearch said in its Dec 1 report that with the passing of the third extra budget and related bills by the Japanese parliament, “we now expect reconstruction work on (Japan's) devastated north-eastern region to gain momentum through the course of next year, given that most of the towns had already drafted their rebuilding plans. ” It predicted the demand would sustain timber product prices. Sarawak Timber Association's latest figures showed that the state's plywood exports to Japan fell by more than 52% to 236, 200 cu m worth RM472.4mil in the third quarter from 499, 400 cu m valued at RM926.3mil in the second quarter. First quarter exports totalled 297, 200 cu m worth RM475.8mil. Japan is Sarawak's biggest plywood market, absorbing 1.03 million cu m or nearly 60% of the 1.75 million cu m valued at RM2.92bil that the state exported in the first nine months. There are about 35 plywood mills in Sarawak, with combined installed capacity of about 4 million cu m a year. Wong said there was now adequate supply of raw materials to the plywood mills, which were hit by an acute shortage of logs due to low production earlier this year because of extremely wet weather. The shortage had disrupted the mills' production. Source: biz.thestar.com.my