Don’t you hate it when your local weather station or app changes their prediction of a sunny day, just as you finish washing your car, and then a downpour erupts? At the same time, any meteorologist who announced, “I’m just not sure what the weather is going to be like” would be out of a job. Well, since our main job is not to predict the future of the lumber market, hopefully this mixed bag of Teak market news won’t be too frustrating for you.
The basic cause for constant fluctuations in the Teak market has to do with the Myanmar government and trade sanctions against it. The U.S. has recently lifted such sanctions, potentially giving U.S. suppliers the ability to buy Burmese Teak directly from the source, alleviating the costs and limited supply associated with having to lengthen the supply chain.
At the same time, quality control issues, combined with concerns over legal sourcing and a looming ban on logging could mean continually climbing Teak prices, instead. Unfortunately, the effect of extremely high prices is usually abandonment of the species, altogether.
The most solid information that we have to go on is the logging ban set by the Myanmar government, scheduled to begin in April 2014. While their forests have historically earned a reputation for being sustainably managed, the situation after 50 years under a military regime is anyone’s guess. In the mean time, the global demand for Teak has certainly increased. Even if Myanmar forests have continued to be managed well, they may not be able to keep up with the growing demand, making a logging ban necessary in order to protect this valuable natural resource. The ban is set to shift exports from logs to lumber, fueling the nation’s struggling economy by providing sawmill jobs and reducing illegal exports, in the process.
All of that seems to make sense for the health of Myanmar; however, reductions in annual harvest amounts have also been mentioned. With an additional 20% reduction anticipated even before the April 2014 ban, only 40% of the timber once seen as available will be allowed to be harvested. While such measures can potentially help maintain a healthy forest and sustainable Teak quality, the bright and promising future may not have a chance to come.
Once the logging ban hits next April, the situation will really escalate. Generally speaking, a tree takes anywhere from 3 to 8 months to get from the forest floor to the export yard. After the ban occurs, the logs will need to be milled in Myanmar, requiring an additional 6 to 8-month time lapse. All in all, a 9 to 16-month wait until Teak begins its voyage on the high seas will be completely baffling in a world in which 2-day shipping has become standard. Even without major price hikes, customers will likely look for alternative species that are readily available, potentially marring the Teak market for years to come.
J. Gibson McIlvain Company
Since 1798, when Hugh McIlvain established a lumber business near Philadelphia, the McIlvain family has been immersed in the premium import and domestic lumber industry. With its headquarters located just outside of Baltimore, the J. Gibson McIlvain Company (www.mcilvain.com) is one of the largest U.S. importers of exotic woods.
As an active supporter of sustainable lumber practices, the J. Gibson McIlvain Company has provided fine lumber for notable projects throughout the world, including the White House, Capitol building, Supreme Court, and the Smithsonian museums. Contact a representative at J. Gibson McIlvain today by calling toll free (800) 638-9100.