India’s demand for sawlog could be at a saturation point, with Uruguay ramping up exports to the booming economy starting next month.
That is according to Scott Downs, PF Olsen’s Director of Sales and Marketing, who reported that Uruguay is preparing to supply four vessels into the Kandla, which “when combined with supply from New Zealand and Australia, means the market might reach saturation.”
As it stands, Uruguay is India’s top market for sawlog, with India’s Ministry of Commerce and Industry reporting that Uruguyans account for more than 20% of total trade for the first six months of 2024 (487,700 cubic metres) ahead of Australia (14.4% or 347,600 cubic metres), Ecuador (12.1% or 293,300 cubic metres), Argentina (9.1% or 213,700 cubic metres) and the United States (7.6% or 193,000 cubic metres).
However, this number does not fully account for the uptake in New Zealand trade (which has picked up since May) after both countries agreed to finally resolve their long-running dispute over Methyl Bromide.
Exporters are looking at India as a pivot from a soft China.
In February, Wood Central reported that India has emerged as one of the United States’ most important export markets, with 116,000 cubic metres of softwood lumber shipped from the West Coast to India last year alone. Already its fastest-growing hardwood market, the US is capitalising on India’s construction industry and, in the process, making up for a drop in Chinese demand—with total lumber exports almost tripling for the first six months of 2024 over last year.
Last year, Wood Central reported that Indian demand for Roundwood will grow 70%, from 57 million cubic metres in 2020 to 98 million cubic metres in 2030, driven by a surge in construction activity. According to the Indian Centre for Science and Environment, the country’s 2022 demand for timber was 63 million cubic metres—30 million cubic metres for domestic production and 33 million cubic metres from imported sources.
While import volumes remain lower in 2024 compared to 2023, India is competing with China to become the world’s largest consumer market for structural timbers. The Modi Government is grappling with a 19 million-unit housing shortage, which will double over the next five years.
Fuelling India’s demand for roundwood is a decision made in 2020 to reverse a 27-year ban on using timber in public buildings.
Last year, Wood Central reported that India’s Ministry of Environment, Forestry and Climate Change (MoEFCC) drove the 2020 decision to lift the ban, citing “a boost for the economy, opportunities to generate jobs and encourage farmers to plant more trees” to make up for a timber and forest deficit.
In the long run, India is also investing in a new streamlined transit system for timber and bamboo products. This system, along with a new government-backed national standard, is a vital part of Modi’s “Wood is Good: Grow More, Use More” policy.Â
