Timber prices soar as log quotas hit global supplies

Sector faces more price hikes as soft and hard wood increases, and plywood jumps 20% in six months

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By  Zoe Naylor Published  May 27, 2006

The timber sector is the latest to be hit by crippling price rises, with the cost of plywood shooting up 20% in the last six months. “Prices for soft and hard wood have been rising steadily for the past 18 months,” said Jason John, manager at Dubai-based joinery firm, Pino Meroni. Red Meranti has climbed from an estimated US $450 (AED1,600) to $550 per tonne, while MDF rose from around $215 per m3 to $240 per m3. White wood, commonly sourced from Chile and Romania and widely used for fencing, has also risen in price. Some of the biggest price increases, however, are for plywood, which is often sourced from Indonesia. “The rises in the past year for plywood are quite significant,” said Siddharth Balachandran, director of Dubai-based building materials supplier, Bumga Group. “Plywood has maybe increased in price by 20% in the past six months and now costs around $300 to $350 per m3,” added Balachandran. One reason for the increase in timber prices is higher freight charges triggered by rising fuel costs. “It is all part of a ripple effect, whereby the increasing oil prices has seen an increase in global freight rates,” said Gerard de Rozario, business development manager at Ajman-based Mohiudeen Wood Works. “Timber is sourced from various regions of the globe and freight accounts for a major cost within the total pricing of the end product,” he added. Restrictions on log cutting imposed by certain countries are also being blamed, added John: “In Malaysia there are restrictions on teak wood that impacts what they’re allowed to grow. And quotas [on logging] also impact on the price.”

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