Low Tropical Timber Demand, Industry Seeks Government Interventions

The timber industry in Malaysia, Gabon and other countries is burdened by long-term weak demand in international markets, and enterprises are looking to government for a response, according to the September 2023 edition of the Global Timber Index (GTI) Report, released on 17 October 2023.


Timber in the processing facility/img: aboutwood.asia

The ITTO-supported GTI Report is compiled based on surveys of leading timber enterprises from the main tropical-timber-producing countries and China, the dominant consumer. The GTI indices all fell slightly in September (a GTI value below 50% indicates decline in the sector).
- China (37.3%),
- Congo (34.2%),
- Gabon (30.7%),
- Malaysia (37.2%), and
- Mexico (32.3%)

In all five countries, the number of new orders received by GTI-participating enterprises was down from the previous month, most markedly in the Congo and Gabon, where export orders dropped markedly.

The news was better in Brazil and Indonesia. In Brazil, the downward trend of some supply and demand indicators — such as domestic orders, export orders and production — eased, with the country’s GTI increasing by 7.2 percentage points in September, to 43.3%. In Indonesia, the decline in new domestic orders slowed, although plywood demand in major export destinations (especially Japan) remained weak, and both export orders and production quantities decreased for participating enterprises.

Enterprises in six GTI countries (Brazil, the Congo, Gabon, Indonesia, Malaysia and Mexico) made suggestions in their survey responses on means for stimulating exports and boosting domestic markets. For example, Malaysian enterprises proposed that government could increase spending on the construction of public buildings to stimulate demand for building materials and residential and office furniture.

Indonesian enterprises suggested incentives for processed wood products sourced from legally and sustainably managed forests. Enterprises in the Congo expressed a desire for the country to control plywood imports and relax restrictions on export commodities. Mexican enterprises want the government to impose restrictions on imported wood, such as by charging tariffs, and to encourage consumers to preferentially buy domestic wood products.

Overall, responding enterprises expressed hope that, in the face of sluggish international markets, governments would take corresponding intervention measures to regulate the timber market and support the industry.


Source: ITTO

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