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Obtaining Teak in a Volatile Market

Last updated on November 29, 2012 by Sozo Staff Leave a Comment

Gib McIlvain III with teak logs

One of the largest US importers of FEQ Teak, J. Gibson McIlvain (www.mcilvain.com) has seen a rise in Teak’s popularity and diversity of its demand. Once used almost exclusively by boat builders, we’re finding others interested in its golden hues and consistent grain patterns. Both vertical grain Teak and quartersawn Teak are being used increasingly for both interior and exterior domestic applications, such as decks, windows, doors, and trim. The most popular variety is still Genuine Burmese Teak, because Plantation Teak can sometimes lack the quality and consistent coloring.

Obtaining high-quality Burmese Teak is getting more and more difficult, though, since the amount of Teak exported does not match the new higher demand. One factor in Teak’s waning availability is that the new Myanmar Parliament building has been designed with extravagant amounts of Teak. Due to this and other global demands for this limited resource, we expect the supply of Teak to decrease, promoting higher prices.

FEQ teak boards

For those who are not new to the industry, these issues are no surprise: The Teak market has historically been an extremely volatile one. Economic sanctions prevent US lumber suppliers from purchasing directly from Burma, and the addition of a middleman always causes increased price. With the addition of emerging markets buying more exotic hardwoods, Burmese saw mills are learning to play the game: They’re selling more of all grades of Teak at higher prices. For those in countries like China and Mexico that aren’t as heavily regulated as the US, buying any quality from any source is acceptable. For us in the US, the situation affects us deeply.

To complicate matters even further, the Myanmar government recently announced that they will ban timber exports beginning in April 2014. With the impending export ban, the only way believed to soon obtain Teak will be directly from the Myanmar government, which is illegal as long as the US embargo is in effect. Hopefully the US government will soon change its stance toward Myanmar.

Afromosia

Even with all the difficulties in obtaining FEQ Teak, we’re still committed to acquiring it for our customers until that is no longer legally possible. Why? This species beats out many other exterior woods in both weather resistance and appearance. We’re willing to put in the diligent effort needed to maintain relationships with Far East buyers to help our customers continue to have access to Teak, but we also want them to understand the issues involved in the market fluctuations they’re bound to notice.

While we continue to import Teak, we’ll also continually research alternative species and recommend them for certain applications. One such alternative is Afromosia, which is sometimes referred to as “African Teak.” We continue to examine and stock other African species, as well, and will inform our customers when we feel certain that they’re reliable alternatives to Teak.

For those die-hard Teak enthusiasts, there’s new hope with the new democratic influence. While the European Union has lifted sanctions against Myanmar, allowing for direct import of Teak, the US has yet to lift their own sanctions. Here at McIlvain Lumber, we’re hopeful that such a change will be coming soon.

Filed Under: Construction

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