KUCHING: China’s economy has been recovering at a rate much slower than anticipated after the country abandoned its zero COVID-19 policy in December 2022 as seen by the performance of its timber sector.
According to China Customs, the country’s log imports in first quarter of 2023 (Q12023) slumped seven per cent in volume to 9.27 million cubic metres (cu m) as compared to that of Q12022 although imported logs were much cheaper as the average price has fallen by double-digit from a year ago.
In Q12023, China’s log imports valued at about US$1.61 billion, which fell by 18 per cent from Q12022 and the average price for imported logs declined by 12 per cent to US$173 per cu m (cost, insurance and freight (CIF)), said International Tropical Timber Organisation (ITTO) in its recent tropical timber market report.
Based on China Customs data, of the total log imports in Q12023, tropical logs volume fell 14 per cent to 1.54 million cu m while its value declined by 32 per cent to US$385 million from Q12022. Tropical logs accounted for about 17 per cent of the national total import volume.
“The average price for imported tropical logs was US$251 CIF per cu m, down from the same period of 2022,” said the report.
China sourced the bulk of its tropical hardwood log from Papua New Guinea (PNG) which amounted to 693,000 cu m (45 per cent) in Q12023, up two per cent from a year ago.
This was followed by Solomon Islands, which supplied 416,000 cu m or an increase of three per cent during the same period.
The biggest increase was tropical logs shipment from Congo, which surged 88 per cent to 152,000 cu m.
“Hardwood log imports dropped by 24 per cent to 2.55 million cu m, accounting for 28 per cent of the national total.
The average price for imported hardwood logs fell 12 per cent to US$245 CIF per cu m over the same period in 2022. “Softwood logs imports rose slightly by 1 per cent to 6.72 million cu m, accounting for 72 per cent of the national total.
However, the average price for imported softwood fell 16 per cent to US$146 CIF per cu m over the same period in 2022.”
“After abandoning its zeroCOVID policy in December last year, the economy has been recovering but at a rate much slower than expected. China’s imports contracted sharply by in April (-8 per cent) while exports grew at a slower pace of 8.5 per cent as compared to 14.8 per cent in March,” added the report.
In Q12023, New Zealand and Germany were the top two largest suppliers of logs to China, with shipments of 3.78 million cu m and 1.17 million cu m valued at US$495 million and US$196 million respectively.
Their combined exports made up more than 50 per cent of China’s total imports during the quarter under review. Because of the Russia-Ukraine conflict, China’s log imports from Russia plunged 38 per cent to 460,000 cu m in Q12023. The report said China’s imports of softwood logs were relatively stable in Q12023 while imports of hardwood logs declined significantly and log prices fell.
“With the gradual recovery of logistics, ports and roads across the country, the accumulated stocks in the country are now being delivered.
Analysts suggest second quarter log prices will remain steady. “After the partial reduction of import tariffs in 2022, the overall cost of logs is expected to decline and become stable which will further reduce the cost pressure on manufacturers,” said ITTO.
