KUCHING: Malaysia’s timber harvesting and production volumes saw a significant decline in December 2024, while demand also continued to weaken in both domestic and international markets, particularly for exports, according to the Global Timber Index (GTI) – Producers Report for December.
“In December, the GTI-Malaysia index registered 20.3 per cent, an increase of 1.5 percentage points from the previous month, but remained below the critical value of 50 per cent for the 26th consecutive month, indicating a further contraction in business activity for leading timber enterprises,” the report said.
Among the 11 sub-indexes tracked, only the purchase price index was above the 50 per cent threshold, while the inventory index for finished products sat exactly at 50 per cent.
The remaining nine indexes remained below the critical level.
“Compared to November, the indexes for new orders, inventory of finished products, purchase quantity, and purchase price rose by 5.0 to 15.0 percentage points. Meanwhile, export orders, existing orders, employment levels, and delivery times remained unchanged. However, the indexes for harvesting, production, and inventory of main raw materials fell by 5.5 to 14.3 percentage points,” the report added.
GTI-Producers is a specialised economic indicator for timber-producing nations under the International Tropical Timber Organisation (ITTO).
A reading above 50 per cent signals industry expansion, while a reading below 50 per cent indicates contraction.
On the certification front, the GTI-Malaysia report noted that as of October 2024, a total of 40 forest management units covering 6.52 million hectares were certified under the Malaysian Timber Certification Scheme (MTCS).
Additionally, 370 timber companies have obtained the Chain of Custody certificate, allowing them to display the Programme for the Endorsement of Forest Certification (PEFC) logo on MTCS-certified timber exports, according to the Plantation and Commodities Ministry.
On December 10, Malaysia successfully achieved its goal of planting 100 million trees between 2021 and 2025, well ahead of schedule.
The country currently maintains a forest cover of 18 million hectares, representing 54.58 per cent of its total land area.
In December, Malaysia was re-elected as chair of the Coalition on Sustainable Timber.
The coalition, comprising forestry and timber industry associations from nine countries—including Bolivia, Brazil, Ecuador, Ghana, Indonesia, Malaysia, Nigeria, Paraguay, and Peru—focuses on addressing challenges posed by the European Union Deforestation Regulation (EUDR).
The overall GTI-Producers index stood at 48.4 per cent in December, remaining below the critical threshold for the eighth consecutive month.
This reflects an ongoing downturn in timber harvesting and primary processing across pilot producing nations, which include Indonesia, Malaysia, Thailand, Gabon, the Republic of Congo, Ghana, Brazil, and Mexico.
In 2022, these eight countries collectively produced 289 million cubic metres of logs and sawnwood, accounting for 63.7 per cent of the total output from ITTO member nations.
“The timber sector in Brazil showed clear improvement in December compared to the previous month, while Thailand’s timber supply and demand continued to grow. However, other timber-producing nations faced ongoing challenges, with their indexes remaining in contraction territory,” the report said.
The GTI index for Thailand stood at 53.3 per cent in December, marking its second consecutive month above the 50 per cent threshold, driven by strong domestic demand and rising new orders.
In Africa, the GTI indexes for the Republic of Congo (ROC), Ghana, and Gabon were recorded at 41.6 per cent, 36.4 per cent, and 34.7 per cent respectively, all remaining in contraction territory.
“Ghana’s timber sector shifted from expansion to contraction due to a significant drop in production volume and domestic orders. Gabon’s timber industry continued its contraction trend, with declines in harvesting, production, and orders, while reports from the GTI focal point indicated a notable decrease in capacity utilisation among timber companies. Meanwhile, in the ROC, the timber sector showed a slight contraction on both the supply and demand sides, with production and operational performance gradually weakening,” the report noted.
In Latin America, Brazil and Mexico posted GTI indexes of 51.1 per cent and 39.9 per cent, respectively, with Brazil surpassing the 50 per cent threshold.
“In Brazil, harvesting volumes continued to decline due to persistent rainfall, while production slowed amid high inventory levels. However, the timber market showed strong performance this month, with both domestic and international orders increasing,” the report stated.
Meanwhile, Mexico’s timber harvesting and production volumes continued to decline. “The export market remained relatively stable, but domestic demand contracted. Timber companies in Mexico hope the government will introduce import restrictions and encourage consumers to prioritise locally produced timber,” it added.
