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| Timber imports 10% costlier on rising freight rate, demand |
| Namrata Acharya / Kolkata Mar 09, 2010, 00:27 IST |
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Industry wants state support for commercial cultivation.
With increased consumption in China and rising freight charges, imported timber has become costlier by at least 10 per cent over the past six months in the domestic market.
Freight charges for importing timber, from Malaysia, New Zealand and African countries, rose by eight to 10 per cent in the past two quarters. In addition, a two per cent raise in excise duty is pushing prices of plywood, another wood family construction and furniture material, though its manufacturers are finding it difficult to pass on the rise to end-users.
“We had announced nearly a two per cent increase in prices just after the Budget, but there is a lot of resistance in the market. So far, we have absorbed the rise in the basic cost of wood, but by month-end, the prices should increase,” said Sanjay Agarwal, joint managing director, Century Ply. Plywood excise rose from eight to 10 per cent after the Budget.
About 70 per cent of India’s timber consumption is met from imports, with the latter total close to 17 million cubic metres in 2008.
According to information with The Wood Resource Quarterly, during the first six months of the financial year, China imported 28 per cent more than during the same period last year. China was the world’s largest importer of wood pulp and logs, and the second largest importer of softwood lumber in the world in the second quarter of the financial year, it said. Also, timber prices had dipped by almost 50 per cent from the peak prices towards the end of 2008, and the current increase was a market correction, said some merchants.
“The rise in imported timber prices is mainly due to increase in freight prices and demand in China. Many countries, especially in Africa, have also banned timber exports,” said a member of the Kandla Timber Association.Due to acute dredging problems in ports like Kolkata, the rise in freight rate has been sharper.
Manish Jain of Bengal Timber Importers Association said the turnaround time for ships coming to Kolkata port had increased from a week to about 20 days over the past year. “Not only in Kolkata, but in other ports also, the turnaround time has increased due to dredging problems,” he said.
Ocean freight charges to import to India increased from $35 per cubic metre to $45-50 in the past year. “In September 2008, timber prices had gone down by more than 20 per cent. The present rise is just a correction,” said Agarwal. In the domestic market, availability of timber from forest auction and privately-owned land had also been decreasing.
“Commercial cultivation of timber is discouraged in India, and due to restrictions by the government, there is a perception of scarcity of timber. The government should allow timber cultivation to qualify as an agricultural activity,” said Satya Brata Ghosh, general secretary, Timber Federation of West Bengal.
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