Double-digit expansion in plywood export to key Japan market KUCHING: Malaysia’s plywood export to key Japan market has expanded by double-digit and is way ahead of its main competitor, Indonesia. Japan imported 683,000 cubic meters of tropical hardwood plywood from Malaysia in the first 10 months of 2021 against 599,100 cubic meters in the corresponding period in 2020 or an increase of 83,900 cubic meters or 14%. On the other hand, Japan has slowed down plywood imports from Indonesia to 572,400 cubic meters from 608,800 cubic meters or down by 36,400 cubic meters or 5% during the same period, according to International Tropical Timber Organisation (ITTO), which quoted data from Japan Finance Ministry, in its latest bi-monthly report. In October 2021, Japan raised its imports of hardwood plywood by 25% to 169,163 cubic meters from the previous month, and this volume was also higher than October 2019. During the January-October 2020 period,Japan had purchased more plywood from Indonesia (608,800 cubic meters) than from Malaysia (599,100 cubic meters ) but Malaysia levelled up the gap to a tie of 702,700 cubic meters with Indonesia for the whole year. Japan’s domestic supply of hardwood plywood was affected after the country’s largest hardwood plywood manufacturer Daishin Plywood Industry Co ceased operation and went into liquidation last year. Daishin had been imported tropical logs and processed into plywood for walls and other applications for decades. With Daishin quitting plywood manufacturing, the Japan Lumber Reports (JLR) said Japan’s imports of tropical logs has decreased to almost none. In the first eight months of 2020, there were only two ships from Papua New Guinea transporting tropical logs into Japan. “With declining logs production in Malaysia and chronic high prices, there is no hope to use (tropical) logs again. “Lumber of South Sea (tropical) hardwood is also hard to come by because logs are scarce in South-East Asia due to the rainy season, so lumber prices are high,” said JLR, a trade journal published every two weeks and its reports reproduced in the ITTO tropical timber market report. The JLR said the market prices of imported hardwood plywood has continued to rise because the suppliers’ export prices keep escalating and the yen’s exchange rate is weakening. “In the supply regions (Malaysia and Indonesia), rainy season has already started.Local plywood mills did not have time to build up inventory before the rainy season started. “Higher adhesive price is another factor causing the increase in (export plywood) prices. Container shortage increases transportation cost,” it added. Ta Ann Holdings Bhd, one of the key Malaysian plywood manufacturers and exporters to Japan,had reported a 11% increase in the average selling price of its plywood products in third quarter to Sept 30,2021 (Q3’21) from Q2’21. In Japan, the JLR said there is supply shortage of domestic softwood plywood throughout the year in 2021. The JLR said the remaining plywood mills in Japan are now using veneer instead of tropical logs in their manufacturing activities. Sarawak’s log production volume from natural forests has fallen sharply in the last decade in line with the state’s sustainable forest management policy. Harvested logs dropped to 5.74 million cubic meters in 2020 from 14.3 million cubic meters in 2019. The Sarawak Timber Industry Development Corp (STIDC) expects the production volume to plummet to two million cubic meters by 2030. thestar