KUCHING: Sarawak’s tropical log suppliers are unwilling to commit to orders from buyers from India due to the “tight” supply situation.
“Nobody dares to commit on the supply orders despite the prevailing good prices,” said an industry source.
It said the new orders came in when several Indian importers met with major log suppliers in Sarawak in the past one to two weeks. They comprised existing importers and those who have imported logs through middle-men in Singapore.
Statistics from the Sarawak Timber Association show that India remains the top buyer of Sarawak logs, importing 1.3 million cu m of the 2.4 million cu m the state exported during the first seven months of this year.
Due to the tight supply, the average prices for tropical logs have gone up by more than 10% from a year ago.
The shortfall in log supply was attributed largely to the abnormal wet weather which had adversely affected logging activities between May and July.
Although the weather has improved, timber companies are now faced with another dilemna – the difficulties to transport logs down the Rejang River as its tributaries in Belaga and Balleh, where major logging activities are carried out, are drying up.
Due to the low water level, transportation of logs by barges from upper Balleh had been halted for nearly two weeks. Express passenger boats and cargo vessels have also suspended their operations on the Kapit-Belaga route.
Some have blamed the drastic drop in the water level in the upper Rejang River to the impoundment – which started on Oct 13 – of the Bakun hydroelectric dam.
It was reported that the water level at the Kapit waterfront was about 6.7m on Oct 13 but dropped to below 2m a week later.
Jaya Tiasa Holdings Bhd general manager Datuk Peter Yong said as the logs could not be transported down the Rejang River to Tanjung Manis for export, this had caused the tight supply situation.
Barges are used to bring down the sinkers while the floaters are tied into rafts and towed down by small boats to Kapit. The logs are then loaded on vessels to Sibu, where many plywood and other timber-processing mills are located, and Tanjung Manis for export.
Nearly 40% of the 5.8 million cu m of logs produced by Sarawak in the first seven months of this year came from the central region, mostly from Kapit Division.
The Sarawak government allows only 40% of the state’s log production to be exported while the remaining 60% is reserved for the downstream processing mills.
“We have the option to transport the logs by lorries to Sibu but it is very costly. The road transportation cost is between US$10 and US$15 more per cu m than river transportation,” Yong said.
However, logging activities were going on as usual as the company log ponds’ stock levels were still low, he said, adding: “We will leave the logs at the log ponds first and wait for the good water level in the river to transport them down (to the processing mills or export point).”