{"id":18968,"date":"2024-07-08T15:25:35","date_gmt":"2024-07-08T05:25:35","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=18968"},"modified":"2024-10-21T20:17:42","modified_gmt":"2024-10-21T10:17:42","slug":"is-indias-tiger-economy-faltering-timber-imports-in-freefall","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/is-indias-tiger-economy-faltering-timber-imports-in-freefall\/","title":{"rendered":"Is India’s Tiger Economy Faltering? Timber Imports in Freefall"},"content":{"rendered":"\n

“Who would buy a sawmill?” That was the question posed in Wood Central’s article last week<\/a>, which reported that lumber producers are struggling amid a global slowdown in residential construction.<\/p>\n\n\n\n

However, while much of the attention has centred around the sluggish North American market<\/a>, dubbed the world’s “best bet” for global lumber, and the Chinese market\u2014where thousands of unsold dwellings now remain vacant<\/a>\u2014India is seen as a growing market for manufacturers and exporters<\/a>, with a seemingly endless hunger for timber.<\/p>\n\n\n\n

That is, until it wasn’t!<\/h6>\n\n\n\n

However, the rivers of gold could be ending – with Wood Central revealing that India is now cutting back on lumber, signalling a potential false dawn for exporters eying the Indian market as a pivot from China.<\/p>\n\n\n\n

According to data from the Indian Ministry of Commerce and Industry, imports for the first quarter of 2024 were down 37% over the same period last year. Whilst more recent data from April and May (considered off-peak for construction) shows that declining imports continue.<\/a><\/p>\n\n\n\n

\"image<\/figure>\n\n\n\n

And it’s not just lumber\u2014used in framing, flooring, wall panelling, and window framing, with imports of timber furniture and log imports sinking…and fast!<\/strong><\/p>\n\n\n\n

In essence, traders are taking less timber during the busy construction months (September to March) than in the previous year, which is a massive reversal of the 137% increase between 2022 and 2023.<\/p>\n\n\n\n

India\u2014as one of the world’s top 10 importers of wood products\u2014<\/a>has been flagged as a major growth market producer of roundwood, lumber, and furniture, with the ITTO reporting that roundwood will grow 70%, from 57 million cubic metres in 2020 to 98 million cubic metres in 2030<\/a>, fueled to a large degree by a surge in construction activity.<\/p>\n\n\n\n

According to the Indian Centre for Science and Environment<\/a>, the country’s 2022 demand for lumber was 63 million cubic metres \u2013 30 million cubic metres for domestic production and 33 million cubic metres from imported sources.<\/p>\n\n\n\n

\"Sluggish
Sluggish global economic activity is crunching lumber pricing, at the same time that costs of production and distribution are skyrocketing. (Photo Credit: Brain light \/ Alamy Stock Photo)<\/figcaption><\/figure>\n\n\n\n

Turning to Australia, New Zealand, Canada, the United States, Brazil<\/a><\/em>, and even Uruguay, Indian importers have been aggressive in the market, dominating export orders. Last year, Wood Central reported that 91% of softwood leaving Australian shores arrived at Indian ports.<\/a><\/em><\/p>\n\n\n\n

India’s housing market is finally showing signs of fatigue.<\/h6>\n\n\n\n

However, like all good things, India’s hunger for lumber has hit a roadblock – just as its booming real estate market, “its tiger economy” has slowed:<\/p>\n\n\n\n

“After steady growth in home sales in India’s top seven markets for over three years, sales of new homes declined for the first time in the April-June quarter,” according to an article in India’s Business Today last week.<\/a><\/p>\n\n\n\n

\"Timbers
For more than three years, timber from across the world has been imported and used to build up India’s mega-cities, including Mumbai, where Chicago-based Perkins & Will designed Antilia, the largest residential project undertaken by Australia’s largest construction company, CIMIC, formerly Leighton Holdings. (Photo Credit: Medium)<\/figcaption><\/figure>\n\n\n\n

According to data from Anarock Property Research, sales in the June quarter fell by 8%\u2014120,340 housing units were sold last quarter, compared to 130,170 in the previous quarter.<\/p>\n\n\n\n

Among the key markets, Hyderabad reported the steepest decline – down 23% quarter-on-quarter; this is followed by Kolkata (-18%), Chennai (-9%), Bengaluru (-8%) and Pune (-8%). In the Mumbai Metro Region, the largest real estate market in the country, sales declined 3%.<\/p>\n\n\n\n

“This drop is also due to the significant hike in property prices over the last year, which has prompted many investors to take a breather,” said Anuj Puri, Chairman of Anarock Group, who said developers are now pivoting to social and affordable housing.<\/p>\n\n\n\n