Turning Points of 2019 - Timber: High Price, a Constant Pain Point

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Since the beginning of 2019, the Poplar timber prices noted an upward trend, reaching the 1000 mark in the second half of the year. The rise in poplar prices created the biggest turnaround in the Plywood industry in North India as it led to an increase in the price of Full Poplar plywood leading manufacturers to shift to alternate plywood. In fact, the rising trend in Poplar logs was registered from the last 3 months of 2018.

The falling percentage of oversized logs and rise in under and sokhta or below 20 inches girth impacted the cost of manufacturing. With the rise in timber demand and lesser availability of Poplar logs in UP, Haryana, and Punjab, troubled the entire North Indian Plywood manufacturing sector. The switch from Poplar to Eucalyptus was noted in 2019 hence the production of alternate plywood and full hardwood plywood was noted to increase in Yamunanagar and Punjab.

Yamuna Nagar based plywood industry witnessed a fall in timber arrival from states like Punjab and UP but the supply of Core Veneer and logs from Rajasthan, Rampur, Roorkee, Balachaur, Hoshiarpur, Ropad etc improved. The supply of Arhu timber and veneer saw an improvement in Yamunanagar for making cheaper quality plywood. Increased prices of Poplar logs are painful for the plywood manufacturing units as the prices for finished goods are not increasing. There has been almost a 100% jump in a year for Poplar logs along with a rise in eucalyptus prices as well.

High Poplar logs prices led to adverse impacts with over 60 plywood manufacturing establishments forced to shut down their plants in North India, because they were producers only cheaper grade ‘All Poplar plywood’. Besides this, many manufacturing units were compelled to reduce their capacity utilization with the over-supply scenario in the alternate plywood market.

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