The progress of the Indian economy continues to be good
and the data for July 2009 reports a GDP figure of 6.4 %.
The Indian Planning Commission’s latest assessment for
annual GDP is 6.3% with the inflation rate being
maintained at around 5%.
In the property sector the long running buyers market has
shifted perceptibly towards a seller’s market and this is
reflected in housing starts and timber imports.
Business in the timber sector, especially for sawnwood
and wood based panel products, has been brisk. There are
reports of considerable increases in demand for PF bonded
film faced plywood and doors and frames.
Analysts say the market for machine made doors and
frames is steaming ahead with a growth rate of about 15%
per annum and this is driving the re-tooling of old
factories.
The tail-end of the departing south west monsoon has
caused floods at some places but overall it has proved a
boon in most of the areas, helping the crops which in turn
will lift consumer spending and support demand for wood
for building and allied uses in rural India.
Rising prices for plantation wood
The industry has voiced concern over the rising prices for
plantation grown eucalyptus, acacia mangium and poplar.
The price increases are tempting more industries to think
in terms of importing competitive raw materials for
peeling for core veneer for plywood.
American hardwoods are being aggressively promoted in
India and the promotion is working. Poplar is gaining
market share.
Imports of core veneer logs will ease the production cost
especially for those factories close to the ports more so
than for factories inland, for example in Uttaranchal and
Haryana, which face high haulage costs.
Some people are saying the Indian Plant Quarantine
department needs to re-examine the current regulations
and remove restrictions on imported species. This they say
is required as imports augment domestic raw material
supplies and benefit employment, the environment and the
economy in general. The Association of Industries has
been called upon to take the initiative for this.
Expand the resources base
To expand the resource base the timber industry is
lobbying for a change of use for the so-called ‘Cultivable
Non forest Areas’ and degraded forest lands. These, it
says, should be allocated for plantations of fast growing
species.
There is great scope in this field as it would open more
land to industrial companies, help carbon absorption to earn carbon credits, generate a sustainable raw material
base and aid rural employment.
The industry says the time has come for Government to
help existing industries to establish plantations which will
provide a sustainable raw material base and encourage
new investors into the sector. The minister in charge of
forests and the environment, Mr.Jairam Ramesh, has been
asked to support this idea for expanding the plantations.
Teak trade
On the trade front, the flow of teak and other hardwood
logs was satisfactory in the period under review. The
exports performance for wood products was also good.
With less Teak coming in from Myanmar and Thailand
demand is strong and rising.
The volumes of teak imported from sources other than
Myanmar are below the levels a few months ago and this
is causing the market to firm.
