The imports and exports of timber are some of the world’s leading raw materials businesses, and China continues to be a leader in purchasing and control of this valuable resource. In October 2007, China unveiled a policy for forest industry development, announcing that it would support China’s forest industry by reducing import tariffs and taking on larger investment projects overseas. This means that China is positioning itself as a world leader in the buying and selling of timber, which in turn can drive global prices higher than ever before.
The New York Times reports on the international environmental groups that are concerned about the sudden rise in timber prices. With the increased logging processes and management required, there is also significant damage to the rainforests. While countries such as China are making economic gains from their imports, countries such as Malaysia and Indonesia are facing immense change that are having an impact on their community and lifestyles.
What this means for the rest of the world is a large spike in timber costs; in the futon and furniture industry, this translates to increased wholesale costs for sellers, which in turn can affect the final price of all types furniture made with timber and related materials. Competing with China’s buying abilities is proving difficult for many countries.
Countries such as Indonesia are taking a proactive approach to this increased demand by opening up new factories and increasing the number of lumber-processing businesses in the area. This offers more employment opportunities for needy communities in the area, but also increases the value of the exports. And, as more timber is exported, deforestation becomes a significant issue; environmentalists are especially concerned about the rapid reduction in natural forest and preservation, and lack of government control as the need for profit-making becomes a top priority. Land and nature preservation are taking a back seat as the demand for this valuable resource continues to rise.
The cost of wood can be impacted by a variety of conditions and situations, and most recently, efforts to control illegal logging have resulted in tariff costs from the respective countries. However, with China’s reduced tariffs and ability to purchase larger amounts of timber, other countries have a lower chance of competing in the same market. By increasing the rate of timber export, countries that provide the wood have a difficult time keeping up with demand. As timber becomes more valuable, the price will continue to increase.
Posted on January 20th, 2008 by aaron
Filed under: Futon News
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