Analysts report that demand in the main export markets remains weak but that there are signs of increased buyer interest in Europe and that, after a quiet spell, Indian buyers have become more active.
First quarter furniture export performance set to be one of the worst in recent years
The Malaysian Furniture Entrepreneurs Association (MFEA) has said Malaysian furniture exports fell in the first quarter of this year.
The Star newspaper reported the association president Lor Lean Seng saying the first quarter performance is one of the worst for the furniture industry in recent years.
According to a Malaysian External Trade Corporation report, furniture exports for January and February 2013 amounted to RM1.088 billion (approx. US$357 million) representing a 9.3% decline from the same period last year.
Exports to the US were worth RM323 million (approx. US$106 million), down 5% compared to the same period in 2012.
Exports to other major buyers of Malaysian furniture such as Japan, Australia and United Kingdom also fell in the first two months of 2013.
Japan imported RM119.9 million (approx. US$ 39 million), down 13.7% over the same period last year while Australia imported 7% less at RM72.9 million (approx. US$24 million).
Malaysian furniture exports to the UK fell by a massive 23% in the first two months of the year to RM55.2 million (approx. US$ 18 million).
The MFEA president said the level of orders reported during the second quarter are not encouraging so export sales are expected to continue to be on the low side.
Depressing news on furniture sales in the domestic market, where first quarter business was down 20-30%, is adding to the pessimistic outlook for the furniture industry.
Malaysian furniture exporters not suffering alone
The president of the MFEA has said furniture exporters in China and Vietnam are also experiencing difficult times, although Vietnam’s furniture exporters have an advantage as the dong has not appreciated as much as in other furniture exporting countries in the region.
The appreciation of the Malaysian ringgit against major currencies has contributed to the decline in exports.
Peninsular Malaysian exports steady in first two months
Exports of other products by manufacturers located in Peninsular Malaysia for the period Jan – Feb 2013 were a little more encouraging.
Plywood exports were worth RM839 million (approx. US$ 275 million); sawnwood exports were worth RM358.7 million (approx. US$ 118 million), and moulding exports were worth RM125.7 million (approx. US$41 million).
Timber industry vital for continued socio-economic growth in Sarawak
The Borneo Post has reported Awang Tengah Ali, the state minister of Resource Planning and Environment, saying the timber industry in Sarawak plays a vital role in contributing to socio-economic growth in the state.
Awang Tengah said the Sarawak timber industry brought in RM7.455 billion (approx. US$ 2.44 billion) to the state in 2012 compared to RM7.085 billion (approx. US$ 2.32billion) in 2011. This 5.2% growth was due to strong demand in markets in the Middle East, South Korea, Singapore, India and Philippines.
Sarawak timber exports for the first quarter this year totalled RM1.85 billion (approx. US$ 607 million) a drop of 3.2% compared to last year.
The decline was due to an overall decline in demand except in the case of plywood for which exports increased by 5.4% in the first quarter to RM1.057 billion (approx. US$347 million).
In terms of volume, plywood, which account for 40% of all timber exports by the state, increased by 14% to 734,162 cu.m.
Sabah reports healthy but not exciting first quarter export performance
The Statistics Department of Sabah released export data for the first quarter of 2013 showing that sawnwood exports, at 59,486 cu.m, were worth RM87,2 million (approx. US$28.6 million). Thailand was the biggest buyer of sawnwood (26%) followed by South Africa (11.9%), Taiwan (11.6%), China (11.4%), and Japan (9.0%).
Sabah’s exports of plywood for the first quarter totalled 165,205 cu.m valued at RM 248.6 million (approx. US$81.5 million).
Japan was the main buyer of plywood from Sabah taking an 18% share followed by Peninsular Malaysia (16%), North Korea (14.6%), Egypt (12.2%) and USA (8.1%). Veneer exports (8,449 cu.m) from Sabah totalled RM11.8 million (approx. US$3.9 million) while exports of mouldings totalled RM14.8 million (approx. US$ 4.8 million). Exports of laminated boards earned RM 18.8 million (approx. US$6.1 million).