WHEN BERGE Snowdon, a cargo vessel, berthed at cargo jetty No 16 of Kandla port on the Kutch coast on the 19th of this month, members of the Kandla Timber Association (KTA) rushed to welcome the ship and cut a cake with its crew members. The celebration was called for as this first-ever consignment of pine round logs from Uruguay would break the near-monopoly of New Zealand origin pine in the Indian market, making import rates competitive.
“This is the first ever shipment of pinewood from Uruguay and the first ever major consignment not of New Zealand origin,” Navneet Gajjar, president of KTA told The Indian Express. “So far, we were dependent on imports of pinewood from New Zealand to service the Indian market for soft wood, except for the odd shipment from Australia.”
The Panama-flagged Berge Snowdon was loaded with 35,512 cubic metre (CBM) of pinewood from the South American country. The KTA president said the timber industry of Kandla and Gandhidham was excited about the new source of import. “The Uruguayan pinewood cost USD 145 per CBM. The price is very competitive compared to the USD 165 to 170 for New Zealand pine,” said Gajjar. “In fact, there has already been a price correction for New Zealand pine bound for India up to USD 10 after our members ordered the Uruguayan consignment.”
Uruguayan pine a game-changer
The Uruguayan pine log consignment may well do for the soft wood industry what consignments of hard wood from countries like Suriname and others did to the hard wood industry around three years ago. Until then, Malaysia serviced around 95 per cent of Indian import demand for hard wood. But when the monopoly began hurting the Indian timber market, importers looked as far away as Suriname, Solomon Islands, and Papua New Guinea, as the prices proved competitive. Diversification of sources reduced the share of Malaysian hard wood to 60 per cent. Chile is another South American country that exports pinewood and is a potential source for Indian importers, say market watchers.
He said 65% of India’s timber imports lands at Kandla port, which serves west, central and north India. There are more than 2,000 sawmills and around 100 plywood factories in Gandhidham. “Timber is a Rs 7,000 crore industry here. Every month, around three lakh CBM of wood is imported at Kandla,” he said. “More than 50 per cent of timber imports are of pinewood, as it is the cheapest. Majority of the pinewood is imported in the form of round logs while some is brought in the form of sawn and sized pinewood from the USA and Canada. But such imports cost more as it comes as containerised cargo.”
Pine timber is a soft wood, which is used as building material as well as in the manufacturing of flush-doors, plywood, pellets for packaging and so on.
“The breakthrough came after a delegation of timber businessmen visited Uruguay a few months ago,” Gajjar said. “So far, the importers had not looked beyond New Zealand for pinewood, and the monopoly was adversely impacting the timber industry. We are hopeful that new source will provide competition in pinewood exports to India.”
India has imposed restrictions on imports of timber logs of certain types of pine from countries like Australia, USA, China, North America, Fiji, Papua New Guinea, South Africa and even New Zealand. Imports from these countries are allowed only if the timber logs are fumigated with methyl bromide or are heat-treated so that pests are destroyed before the consignments land on Indian shores. “Many developed countries have shifted to phosphine fumigation, which is more environment friendly,” a source indirectly associated with the timber industry said. “However, Indian laws mandate methyl bromide fumigation. So, exporters of some countries give importers the options of both treatments. But the opening of a new source of import is definitely good for the Indian timber market. Until recently, nobody had thought about an alternate source to New Zealand. The status quo seems to have broken with the arrival of Uruguayan consignment.”
G P Singh, deputy director of the regional plant quarantine station at Kandla said that the Uruguayan consignment met Indian phytosanitary standards.
Uruguay is a major producer of pinewood with around 2.75 lakh hectare of land under plantation of pine trees. It is also a major producer of eucalyptus logs.