The Indian log market has reached China price parity with ‘A’ longs now selling for USD 159-160/JASm3. While volumes delivered to this market are 14% down year on year to May 2018, it has been a steady market and exporters still expect an increase in demand in Q4.
There is an increased schedule of ship arrivals from NZ over the next six weeks, so this will be a good test of this market. Containers of logs are also arriving from Germany, South Africa and southern yellow pine from the USA.
The labour shortage mentioned in previous Wood Matters continues, but some labour has returned to the mills from agricultural work. Log stocks are about 120,000m3 in Kandla and 30,000m3 in Tuticorin. The cash flow of log buyers is still tight after the introduction of GST and the increased scrutiny on bank lending compounding the weakening of the Indian Rupee against the US dollar.
Source: PF Olsen Wood Matters