Prices of timber products broadly higher

The April report from ITTO shows that the prices of most timber products have improved. The higher prices could be attributable to raw material shortages in Malaysia, due to heavy rains affecting the log extraction & production.

One interesting news item highlighted by the report is that the Japanese Nanyozai Freight Agreement (NFA) has now been dissolved and this could lead to a drop in the future availability of shipping vessels for Sarawak timber. I do not think this will happen because the NFA is a cartel formed in 1962 to avoid excessive competition in the importation of timber log & timber products from Southeast Asia. The NFA members were accused of tax evasion by the Tokyo Regional Taxation Bureau for failure to report JPY1.1 billion income which was paid to a Hong Kong-based company (for more, go here). In fact, the dissolution of NFA could lead to greater competition among the shippers & a lowering of freight rates.


Source: The ITTO Tropical Timber Market Reports