KUCHING: The overall demand for wood-based panels in tropical countries under Global Timber Index (GTI) watch grew for the third consecutive month in August 2025.
The new orders index in GTI-Woodbased Panel (GTI-WBP) pilot countries registered 53.2 per cent, the export orders index rose by 0.1 percentage point to 52.9 per cent, and the existing orders index stood at 50.8 per cent. This indicated slight growth in both domestic and international demand for wood-based panels as well as in the volume of existing orders.
“The three-month consecutive rise in overall demand for wood-based panels from June to August could be attributed to several factors, eg orders placed in advance as a result of US tariff policies, accelerated subsidies for old home renovations in China, and increased demand driven by infrastructure expansion and post-disaster reconstruction in some countries,” according to the latest GTI-WBP monthly report.
The pilot countries are Indonesia, Malaysia, Thailand, Gabon, Republic of Congo (ROC), Ghana, Brazil, Mexico, and China. In 2023, the total production of wood-based panels in these countries stood at 336 million cubic metres (cu m), accounting for 50.9 per cent of total global production.
The GTI-WBP report is prepared by the Global Green Supply Chain Initiative (GGSC) in collaboration with the International Tropical Timber Organisation (ITTO).
For August, the GTI-WBP Index registered 54.6 per cent, a decrease of 4.7 percentage points from July, and remained above the critical value (50 per cent) for the fifth consecutive month. This indicated that in the pilot countries, the overall business prosperity of the wood-based panel industry represented by the index expanded compared to the previous month; however, the improvement was less obvious than in July.
Last month, the supply of wood-based panels in the pilot countries showed an upward trend for the sixth consecutive month, with the index registering 67.9 per cent, up 4.7 percentage points from July.
“Driven by the recovery in demand, the industry had accelerated capacity release in production. In addition, the inventory index of finished products stood at 56.5 per cent, remaining in expansion territory for the fourth consecutive month, indicating that amid temporary recovery in demand, WBP manufacturers should be alert to potential overcapacity risks,” said the report.
On the other hand, the purchase price index for raw materials recorded 60.0 per cent, remaining above the critical value for the 14th consecutive month, indicating that amid insufficient log supply in many countries, WBP manufacturers were facing increasing cost pressures.
Additionally, some sample enterprises reported financial strains due to rising labour, fuel, logistics, and tariff expenses as well as delayed customer payments. There is therefore an urgent need to reduce costs, improve efficiency, and obtain tax relief or government subsidies.
Regarding the main challenges reported by GTI-WBP enterprises in various countries last month, these were mostly similar to those of previous months. In Malaysia, enterprises pointed out the lack of demand for plywood exports and shortages of logs for the processing industries.
The challenges faced by other countries included: a shortage of skilled labour (Ghana); insufficient orders (China); an increase in diesel prices due to short supply (ROC); poor road conditions and delayed supply of raw materials (Gabon); and price pressure from competitors (Mexico).
Brazilian enterprises faced a degree of uncertainty regarding the impact of recent US trade tariff measures on products directly from Brazil, as well as on products from other countries exported through Brazil that may ultimately enter the US market. Consequently, clients had been cautious in committing to new purchases.
GTI-WBP enterprises proposed various suggestions to address the challenges faced. These include slowing down production (Malaysia); exploring new export markets (Brazil); seeking alternative suppliers (Thailand); expanding into international markets to increase order volumes (China); adjusting the fuel supply model to meet enterprise needs (ROC); providing government support and incentives for apprenticeship training (Ghana); improving road and railway conditions to enhance logistics efficiency (Gabon); and strengthening capacity building to improve processing efficiency (Mexico).
