Slow Demand, Payment Recovery Keep Trade Sentiment Low

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The housing demand and real estate sector continued slowdown is impacting the volume demand in wood panel segment confirms ground reports gathered by the Ply Reporter from different parts of the country. There are reports that retailers’ sales reported a 55-60 % lesser transaction compared to November- December span. The demand for plywood products are weak especially in premium price segment although mid priced plywood is selling comparatively better.

The demand cycle in North, East and Western region is too slow where as Southern states are still generating orders for plywood products. In door category North and Western India are better performing shows the market data of various sales points. The Payment recovery cycle is reported to have extended up to 120 days following banking tightness and other liquidity issues said/agreed every person who was approached by the Ply Reporter during February.

The drop in sales volume and payment is being linked with election schedule and government stability factor by the market people. Equally March closing hence maintaining lesser inventry, advance tax deposits and GST revenue payments are also said to be top reasons by the retailers. The Ply Reporter estimate that despite of demand scarcity and liquidity crunch, Plywood market size is reaching to 30,000 crore of which unorganized and mid-segment players have around 85.0 % of market share.

The present trade sentiments show tremendous dullness not only because of volumes but mainly because of drop in margins at every level. Among Manufacturers, distributors, retail counters everyone is feeling the margin pressure and is now openly accepting it. Fy 2019- 20 will have a lot of expectation from election in terms of majority for a stable government though till clear majority comes, a lot is at stake for the building material industry & trade front, feel majority of dealers and producers.

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