GTI: Thai timber sector turns positive in June

Rong Kwang Sawmill in Phrae, Thailand. Photo: Forest Industry Organization (FIO)

Thailand’s timber sector returned to growth in June after five consecutive months of contraction, making it one of the month’s standout performers, according to the latest Global Timber Index (GTI) report. The ITTO-supported GTI tracks the performance of the timber sector in pilot countries.

The GTI for Thailand was at 65.0% in June, back above the 50% threshold, indicating strong activity in its timber sector. Other winners included Ghana (66.1%, the sixth consecutive month in positive territory), and China (57.5%, the fourth month above the threshold).

However, the readings for the Republic of the Congo (47.6%), Gabon (45.6%), Mexico (43.7%), Brazil (38.5%), and Malaysia (23.4%) remained in contraction territory, suggesting an overall decline in the timber business in those countries.

Positive signs were evident in the sub-indices of some countries. For example, harvesting volume rose in both Gabon and the Congo, while production volume in Thailand increased significantly. On the demand side, Mexico’s domestic market improved, while China and Ghana continued to see growth in their export markets.

In June, the GTI-Woodbased Panel Index, a specialized index for wood-based panels, stood at 57.7% and remained above the 50% threshold for the third consecutive month, suggesting improvement in the subsector. However, the GTI-Producers Index, a specialized index for timber production, was at 43.4%, indicating weakness in that area.

Enterprises surveyed for the GTI in June highlighted various challenges. For instance, Chinese businesses reported intense price competition and suggested regulating practices in the industry; Ghanaian enterprises expressed concern over rising electricity costs, while their Gabonese counterparts noted that SETRAG, the railway operator, raised the transportation price for logs. In Latin America, firms in both Brazil and Mexico highlighted issues related to international trade barriers or tariffs.

In its series of case studies on good practice for legal and sustainable timber trade, the June report showcases Mexico’s mechanization of harvesting activities.

The monthly GTI Report, GTI-Producers Report and GTI-Woodbased Panel Report are available free at www.itto.int/gti.