Myanmar log export ban to benefit Malaysian companies

Source:
ITTO
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Myanmar‘s log export ban on 1 April is seen by many in the industry as providing an opportunity for Malaysian timber companies, especially as demand in India and Japan is firm. The investment research company, RHB Research Institute, says ―'Malaysia‘s log prices will be undergoing a re-rating as Myanmar‘s log exports catered to more or less the same e xport markets as Malaysia'.

RHB‘s Hoe Lee Leng said, ― 'Looking back at history, when Indonesia banned log exports in 2001, Malaysia went from having a 43% log export market share to a 58% market share. In view of the change in Myanmar, we expect tropical log prices to start to go up again from the first half of 2014, after the existing inventory of logs held in importing countries declines'.

Hoe is expecting the knock-on effect of the Myanmar ban to be less felt in the plywood markets where he predicts prices will go up 2 – 3% year-on-year. He pointed out that while Japan housing projects grew 11% in the year 2013 and 12.3% in the first quarter of 2014, plywood imports did not rise by the same amount, growing only 3.3% year-on-year.

The Myanmar log export ban is expected to benefit Sarawak timber companies most as they are the nation‘s main log exporters. The Sarawak Timber industry Development Corporation (STIDC), in its first quarterly magazine for 2014, states it is hopeful that Sarawak will sustain timber and timber product export values at RM7.2 billion (approximately US$ 2.2 billion) this year.

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