Wood prices are set to increase due to strengthening of euro and an improvement in freight prices, even as demand for products is expected to go up during the coming months.
Currently, price of soft wood starts at $200 per cubic metre whereas the American ash (hardwood) is priced at $460 per c mt.
Naresh Merani, Director, Merani Trading, yesterday told Emirates Business that the most popular woods have registered a seven per cent increase during the past two months. According to him, local demand for wood has been consistent.
"I usually get demand orders around three to four months before the products hit the market. Now I can see a momentum, which shows the way the market is going to be about two to three months from now," he said.
Wood prices have remained steady for most of the year although the weakening of the dollar, a stronger euro and a rise in freight prices has affected prices during the last two months.
"As most of the imports are euro based, we have witnessed a seven to eight per cent increase during the last two to three months," said Merani. According to him, soft wood is mostly imported from New Zealand, Europe Chili and Brazil.
Hardwood is mostly imported from United States, Africa, Europe and Malaysia.
"The price of wood from America is steady whereas wood from Africa is going up as euro is gaining. Wood from Malaysia is also expected to go up due to an increase in freight," he said.
Danube Building Material yesterday said that wood prices have continued to remain stable after stabilising in the first week of July, and is expected to increase further in the coming months. Red Meranti from West Malaysia, has increased to Dh2,750 per tonne from Dh2,700 per tonne.
In a statement issued to the press, Rizwan Sajan, Chairman, Danube Building Materials, said: "Prices of wood have dipped to its lowest in the first quarter this year, which is a tremendous development for developers who are nearing the completion of their projects and are gearing up for delivery.
"With factors such as fluctuating supply of raw materials and the current correction in the real estate and property market, we anticipate the prices to increase further. Our goal is to leverage this shift by delivering top-quality products to major projects and developments across the region," he added.
A recent Statistics Centre-Abu Dhabi (Scad) bulletin, however, said that prices of several building materials including wood had registered a drop in July. Wood prices, it said, had fallen by 0.06 per cent compared to prices in June.
Scad's bulletin said that the fall in the price of wood during July was due to a decline in the average price per sheet of large Malaysian Merionti red timber by 3.85 per cent, from Dh75.8 in June to Dh72.8 in July.
Indonesia red teak-faced plywood sheets measuring 3x7x3.6mm and 4x8x3.6mm fell by 6.41 per cent and 1.59 per cent, respectively. On the other hand, the average price per cubic metre of Chilean and Romanian white wood surged 4.79 per cent and 4.71 per cent respectively.
An upward trend was also observed in regard to the prices of various types of white plywood, which topped their June levels by 0.38 to 1.43 per cent.
By Joseph George
© Emirates Business 24/7 2009
