Sarawak’s tropical log supply hit by reduced log export quota

With the reduced log export quota in Sarawak, India and Japan are facing a challenge to meet their required volume for export.

As small and super logs are getting harder come by in Sarawak, Japanese buyers are shifting their attention to Sabah where more logs are available. However, Kapur and Kruing in Sabah are also lacking in supply. In addition, as the rainy season starts in November, the log supply will decline further.

This has led to Malaysia log prices to remain on a pricier cost at US$275 per cubic metre FOB on Meranti regular, US$255 on Meranti small and US$245 on super small.

Since the demand for South Sea logs, lumber and plywood is sluggish in Japan, buyers have reduced purchase volume. If export prices continue to remain high, gap between supply and Japan will widen. However, as India and China are not buying logs from Sarawak, local log suppliers are unable to be aggressive too.

In the meantime, log production continues to be active in Papua New Guinea and Solomon Islands due to their stable weather. India has also started buying from these places to replace Sarawak’s logs, hence, there is no surplus. However, the depressed China market has led to the absence of China as a buyer.

Source: ITTO