Eucalyptus emerged as a rescue raw material since a year for plywood industries. It played as cushion for manufacturers but now it is also catching up with the poplar prices. Increasing prices of Eucalyptus in Haryana, Punjab and Uttar Pradesh is a cause of concern for manufacturers due to rise in product cost. Industry is of the view that prices of Eucalyptus logs have increased by 20% in last 2 months. The Bareilly based manufacturing clusters are getting eucalyptus prices higher by 30 percent compared to prices 6 months ago. Majority of producers are of the view that ‘eucalyptus prices are rising due to short supply and heavy rains. The timber merchants told to Ply Reporter correspondents that, present demand is slow hence our loadings are down by 20%. But once demand comes back, the prices of Eucalyptus core will go up further. The real big issue is that manufacturers are unable to pass this price increase of timber to market because of poor payment receipts and liquidity.
Passing on Eucalyptus price rise will be an acid test for many producers who have been managing the show somehow. The core veneer peeling units are under distress too due to poor payments receipts and rising outstanding. The industry veterans are of view that giving free credit to weak players will actually force peeling veneer units towards capital shortage one day hence people shall ask for the right price this time with Safeda prices. It is known that ‘North based plywood manufacturers have shifted their operation from Full Poplar plywood to Alternate plywood, hence the consumption of eucalyptus timber has increased sharply and will continue to rise up.
The leading people of plywood industry are of view that many people who did not charge right price and tight payments when increasing prices of Poplar logs were going out of calculation, are now on the verge of closure. It is anticipated that Eucalyptus log prices will also cross 900 per quintal mark by the end of this year, if demand scenario improves.