India: Budget expected to focus on stimulating industrial production

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ITTO's Tropical Timber Market Report
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At the end of February the national budget for the coming fiscal year is expected to be submitted to parliament. Analysts expect the new budget to contain stimulus measures to address the slowdown in the Indian economy.

This slowdown is primarily the result of weak demand in the main export markets of the USA and Europe. It is anticipated that the stimulus measures will focus on boosting industrial production for exports and on checking inflation.

Over the past year the Indian timber industries have managed to adjust to the slowing economy and overall market developments.

As mentioned in the previous issue of the TTMR, log imports have been increasing. The performance of Indian wood product exporters is encouraging as illustrated in the table below.

Exports of wood products 2011-12 compared to 2010-11

  Value Rs. Million Value USD Million
  2010-11 2011-12 2010-11 2011-12
Plywood and Wood Products 23612.4 26864.8 519 567.6
Cork& cork products 116.2 140.1 2.6 3
Hard board of wood fiber 486.2 598.8 10.7 12.7
Other articles of wood 4560.7 6854.6 100.2 144.8
Sandal wood chips 92.8 105.8 2 2.2
Sawn timber 831.1 1008 18.3 21.3
Tea chest panel 1 6.5 0 0.1
Veneer 717.5 698.4 15.8 14.8
Wooden furniture 16207.1 16487 356.2 348.3
Other plywood and products 599.7 965.7 13.2 20.4

Source: Min. of Commerce Export/Import Databank

Sales of Teak and other hardwoods from Indian forests.
The latest average prices for teak and other hardwoods at government teak depot tenders in Central India are shown below. Prices are in rupees per cubic foot, ex depot.

2-3 metre length
46-60 cm girth Rs. 800~900
61-75 cm girth Rs. 900~1000
76-90 cm girth Rs. 1000~1050
91 cm and up Rs. 1300 and up
 
3-4 metre length
46-60 cm girth Rs. 850~950
61-75 cm girth Rs. 1000~1100
76~90 " Rs. 1150~1200
91 cm and up Rs. 1300~1350
 
4-5 metre length
45-60 cm girth Rs. 1050~1150
61-75 Rs. 1200~1350
76-90 Rs. 1400~1500
91 cm and up Rs. 1600 and up
 
Haldu (Adina cordifolia) and
Laurel (Terminalia tomentosa)
 
3 metre and up length
75 cm and up girth Rs. 400~600


Import volumes of plantation teak logs
India is a major buyer of plantation teak from more than 30 countries. Imports of natural teak come only from Myanmar.

Details of imports of plantation teak received at Kandla port during the 2011-12 financial year are shown below.

The table provides information on the volume of imports from countries supplying more than 5000 cubic metres of plantation teak during the year.

  Cubic metres
Ecuador  89,631
Myanmar  70,732
Ghana  53,804
Costa Rica  44,883
Ivory Coast  41,439
Panama  33,880
Benin  33,850
Sudan  18,980
Brazil  15,944
Tanzania  11,825
Togo  11,004
El-Salvador  9,637
Nigeria  6,154
Other  13,053
Total  454,816


Plantation teak log prices
Current C & F prices per cubic metre for imported plantation teak are shown below. Analysts report that supplies and deliveries of plantation teak remain stable and that prices levels have not changed significantly.
Current prices, C & F Indian ports, for plantation Teak are shown below.

Imported Plantation Teak Prices (C&F)

  US$ per m3
Tanzania Teak sawn 450-800
Côte d'Ivoire logs 450-850
PNG logs 450-550
El-salvador logs 400-550
Guatemala logs 400-500
Nigeria squares 300-500
Ghana logs 350-650
Guyana logs 300-450
Benin logs 425-650
Benin sawn 700-800
Brazil squares 400-600
Burkina Faso logs -
Columbia logs 400-600
Togo logs 350-500
Ecuador squares 350-500
Costa Rica logs 400-650
Panama logs 350-450
Sudan logs 500-600 

Variations exist based on lengths and average girths of logs in a parcel. Prices also vary with measurement allowances given for bark and sap in different countries of origin.

Domestic Ex-mill prices for imported timbers
Domestic prices (per cubic foot ex-sawmill) for air dried sawn timber remain unchanged and are indicated below.

The price range reflects differences in the length and cross section. Analysts say the trend to replace teak with other durable tropical hardwoods continues, driven mainly by the high price of teak.

Domestic Ex-mill Sawnwood Prices for imported timbers

Sawnwood, (Ex-mill) (AD) Rs. per ft3
Merbau
1500-1650
Balau
1600-1700
Kapur
1100-1250
Red Meranti
800-900
Radiata Pine (AD)
500-550
Sawnwood, (Ex-warehouse) (KD) Rs per ft3
Beech
110-1200
Sycamore
1200-1300
Red oak
1400-1550
White Oak
1400-1650
American Walnut
2000-2150
Hemlock clear grade
1000-1100
Hemlock AB grade
950-1000
Western Red Cedar
1400-1550
Douglas fir
1050-1100


Domestic Ex-mill Sawnwood Prices for Myanmar Teak Sawn in India

Teak Export Grade F.E.Q Rs. 4500 to 10500
Teak A grade sawn timber Rs. 3400 to 4000
Teak B grade sawn timber Rs. 2800 to 3100
   
Sawn Myanmar Plantation Teak
FAS grade lumber Rs. 2000 to 2600


Indian plywood manufacturers investing overseas
The sourcing by Indian plywood manufacturers of core and even face veneers from Vietnam, Thailand, Malaysia and Myanmar is increasing. There is growing interest from Indian companies in constructing plywood mills the countries mentioned above.

Current plywood prices, ex-warehouse, per square foot are shown below:

Domestic Ex-warehouse Prices WBP Marine Grade Plywood

Plywood, (Ex-warehouse) Rs per sq.ft
4 mm 30.00
6 mm 43.00
12 mm 66.50
15 mm 79.00
18 mm 95.00


Domestic Ex-warehouse Prices for Locally Manufactured Plywood

Locally Manufactured
Plywood “Commercial
Grade”
Rs per sq.ft
  Rubberwood Hardwood
4mm Rs.14.10 Rs.24.00
6mm Rs.20.60 Rs.32.00
8mm Rs.26.50 Rs.35.00
12mm Rs.32.00 Rs.40.00
19mm RS.42.00 Rs.55.00
5mm Flexible ply Rs.30.00  
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