Timber prices up 20% as weather hikes cost of operations
BANDAR SERI BEGAWAN
PRICES of timber products are up by an estimated 20 per cent from last year largely because supply in the domestic market has gone down from previous years, traders said.
It would be noted though that prices have increased despite sluggish domestic demand mainly due to delay in government projects whose timber requirements feed the local industry.
Traders blame unfavourable weather conditions for the reduced supply, and this has also pushed up prices in the market, said Tan Peng Lam, managing director of Timbertech Company.
"The prices are already going up. There has been a 20 per cent hike in prices of timber as compared to last year," he said in an interview with The Brunei Times.
"What we are all facing now is the weather problem, we cannot save the logs. Hopefully by July or August, the weather would improve and things can get back to normal," he added.
Due to unstable climatic conditions, Tan said several sawmills have suspended business operations temporarily some have even put operations on hold for up to six months until weather conditions are favourable.
Tan foresees slow growth in the timber industry this year due to sluggish demand.
"Demand is very slow this year because government projects are slow to begin, but we will still be able to survive," he said.
KH Lee, director of Twinwood Kiln Dry Treatment Industries, said government rules on land allocation for the industry also affects supply.
"We are given timber quotas every year. There is 97,000 cubic metres of land which divided by 24 saw milling companies, if you are talking about quantity it is a problem," he said.
"We cannot do anything as the government is doing its part in preserving the forests for future generations," he added.
He said Brunei used to import a lot of timber from Miri and Sarawak in Malaysia but timber from neighbours is usually those of low quality as good quality timber is already exported to other countries.
"Our local timber is still of very good quality and cheaper than imported timber," he said.
Twinwood Kiln Dry Treatment Industries has not been importing timber for seven years.
"We are not importing temporarily because the prices are too high due to the international market shortage. It is not easy to import," Tan said.
With imported timber it is also impossible to compete with local products, said the managing director.
Among other concerns that were raised was the issuance of approved import permits by the forestry department and the tax imposed on imports.
"Sometimes it is not easy to obtain the permit," he said.
Mahmud Yussof, the Acting Deputy Director of the Forestry Department, said the tax was under the jurisdiction of the customs department and not his.
"(But) there should not be any problem in applying for the permit. Companies can approach the forestry department. We can issue it in three days," Mahmud said.
"They can import from wherever they want. The procedures are easy. I myself approve these permits," he said.
The Brunei Times