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Malaysia is expecting commodity exports, particularly
exports of timber products, to recover in line with the
economic recovery in both the EU and the US.
Exports of Malaysian commodities declined from RM112
billion in 2008 to only RM90 billion in 2009 due to the
global economy slowdown.
Demand for Malaysian timber fell from RM22.8 billion in
2008 to RM19.8 billion in 2009.
Exporters cautious
Malaysian timber exporters are closely watching
developments in the EU and US markets. Currently
economic recovery in the two main markets is considered
weak and may not be sustained.
With the US dollar weakening against the Malaysian
ringgit, timber exporters will face a tough time in the US
market if they cannot trim prices.
In addition, because of the advantageous exchange rate of
the Chinese renminbi against the US dollar, competition
from Chinese manufacturers, especially of furniture, will
continue to be fierce.
New Year slow down
Prices of Malaysian timber products remain relatively
stable as most businesses wind down for the annual
Chinese Lunar New Year holidays.
Price increases for sawn rubberwood lead the charge as
there has been less felling of rubberwood trees because
prices of natural latex rubber continues to climb upwards.
The sharp rise in prices for natural rubber and palm oil
could lead to a sharp drop in the supply of rubberwood
logs and oil palm fibres.
A prolonged shortage of rubberwood logs may take root
and this could impact the local furniture and panelproducts
industry after the Chinese New Year holiday.
Source: ITTO TTM Report 15:3 1 –15 February 2010
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