Zuraida: Malaysia should capitalise on US, UK’s timber demand surge

by NURUL SUHAIDI/graphic by TMR

MALAYSIA is prepared to work closely with the UK and US to address the latter countries’ demands for timber products. 

Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin said there is a growing potential for the local timber industry this year given that American importers are looking for other sources as a result of the sanctions on Russian timber products.

“Such measures have severely hampered the timber market for the UK and the European Union,” she said in a statement today.

Currently, the current market sentiment for Malaysian timber in the US is bright, especially for Meranti and Keruing.

“The demand for Meranti sawn timber has increased by 9% year-on-year (YoY), while Keruing has increased by 467% YoY.

“Apart from timber, the American importers are also looking for alternative material, especially plywood,” she added.

Therefore, in this aspect, Zuraida said Malaysia is keen to collaborate with the UK, especially under the Programme for the Endorsement of Forest Certification.

She added that the timber players in the country also stand to benefit from many duty-free products and can often avoid the need to claim preferential rates of duty.

“While Malaysia benefits from the UK customs’ regulation update, the ministry also hopes that the UK government will further streamline the procedures and document handling to ease the current logistical issue,” she said.

Apart from that, Zuraida said Malaysia is also keen to discover the UK’s position on the deforestation proposal and work on a consensus on the definitions of deforestation and forest degradation.

“This is because the Malaysian timber industry places strong concerns on the ENVI (Committee on the Environment, Public Health and Food Safety) Deforestation proposal,” she said.

She revealed that despite the pandemic, the Malaysian timber industry continued to perform well with export growth of 3.1% to RM22.7 billion in 2021 from RM22.02 billion in the previous year.

Meanwhile, according to the Malaysian Timber Council (MTC), Plywood was ranked top in terms of export value which together with wooden furniture, sawn timber, and builder joineries, as well as carpentry contributed more than half of the total exports.

In early 2020, demand for Malaysian timber-based products, particularly furniture, surged as more individuals around the world began working from home, resulting in an increase in home building, repairs and remodeling.

However, while the opportunity remains bright, she said Malaysia’s sawmills face challenges in fulfilling the demand and orders due to the slow shipments from Malaysia as a result of a shortage of logs from natural forests.

“Another challenge that exporters have to cope with is heavy port congestion that ranges from lack of containers to insufficient vessel space and other logistical constraints,” she added.

Nevertheless, transshipments of timber products have been identified as a potential medium-term solution.

“To address the issue, US-based International Wood Products Association is eager to speak to Malaysian timber industry leaders for viable solutions,” she said.

Zuraida also noted that collaboration is being drawn up between the US compliance officer and Malaysian authorities such as the Malaysian Timber Industry Board and Customs to protect Malaysia from being targeted by the US domestic timber product association and the US authority on suspicion of trade circumvention.

Nonetheless, she warned that the timber industry has yet to entirely recover as there were still some laggards in terms of rising sea freight charges, availability of containers, manpower shortages, and lack of raw materials.

In response to the issue, she stated that MTC has implemented various programmes to assist the timber industry in overcoming more serious difficulties such as technical developments and resource efficiency.

“The council has also come up with seven must-win initiatives for 2022 which focus on reviving businesses with several new programmes for oil palm trunk products.

MTC previously collaborated with the Forest Research Institute Malaysia in establishing the environmental, social and governance guidelines for the timber industry.