Indonesia

Rising regulatory risks may force planters to scale back in Indonesia

Rising regulatory risks in Indonesia could prompt some plantation companies to scale down or exit their operations over the longer term following a wave of large-scale land seizures, Public Investment Bank Bhd (PublicInvest) said in a recent note.

Recently, Indonesian authorities confiscated vast plantation land spanning Central Kalimantan and Riau, as well as North and South Sumatra. The land, previously controlled by 232 companies, has been transferred to Agrinas, a state-owned company established in early 2025 under the administration of President Prabowo Subianto.

The operations were carried out jointly by the Ministry of Environment and Forestry, Ministry of Defence, and the Attorney General's Office. The task force has set a target to reclaim up to three million hectares of plantations deemed illegally operating within forest areas by August.

Malaysia

US cuts Malaysia tariff to 19% from 25%

Malaysia will now face a 19% tariff on exports to the United States, reduced from the previous 25%, under an executive order signed by US President Donald Trump.

The new tariff structure takes effect in seven days and applies to goods entering the US for consumption, with limited exceptions for shipments already in transit.

Signed on July 31, 2025, the order amends Executive Order 14257 and imposes revised ad valorem duties on multiple trading partners, including all major Asean nations.

Under the latest tariff list, Malaysia, Thailand, Indonesia, the Philippines, and Cambodia each face a 19% rate.

Vietnam faces a 20% tariff, while Brunei is listed at 25%. Laos and Myanmar are hit with the highest rate at 40%. Singapore is not included in the latest round of adjustments.

Sarawak’s furniture industry launches strategic plan for global growth

Sarawak’s furniture industry is poised for a major transformation as the Sarawak Timber Industry Development Corporation (STIDC) and the newly appointed Sarawak Furniture Industry Association (SFIA) 2025-2028 committee unveiled a comprehensive strategic plan to boost the sector’s global competitiveness.

The announcement was made during the SFIA 17th Committee Installation Dinner held at the Borneo Convention Centre Kuching (BCCK), where STIDC General Manager, Zainal Abidin Abdullah, outlined a joint strategy with SFIA, focused on sustainability, innovation, supply chain development, and export market expansion.

A major highlight of the plan, accoridng to Zainal, is the establishment of two dedicated Furniture Parks in Demak Laut and Tanjung Manis under the 13th Malaysia Plan (13MP).

STIDC and SFIA are also jointly developing a Furniture Industry Blueprint, which will serve as a roadmap for addressing persistent challenges such as raw material shortages, skilled labour deficits, rising costs, and intense global competition.

Malaysia forms committee on EU deforestation rule

The Malaysian government has formed a Special Committee to spearhead the country's response to the European Union Deforestation-free Products Regulation (EUDR), involving three key ministries: the Ministry of Plantation and Commodities (MPC), Ministry of Natural Resources and Environmental Sustainability (NRES), and Ministry of Investment, Trade and Industry (MITI).

A key priority of the Committee is to secure Malaysia's classification as a low-risk country under the EUDR framework.

This includes strengthening national traceability systems and ensuring the provision of credible forest data to the Global Forest Resources Assessment (FRA) by the Food and Agriculture Organisation of the United Nations (FAO), which forms the quantitative basis for EUDR's country risk assessment.

The Committee will also act as the central channel for Malaysia's engagement with the European Commission, including the submission of official datasets, policy updates and participation in technical exchanges.

Thailand

Prices of some wood products continue to rise in Thailand

The Director of the Office of Trade Policy and Strategy at the Ministry of Commerce noted that prices of wood products such as flooring, door frames, and window frames continued to rise in June, driven by higher raw material and other production costs. And with expansion of infrastructure construction and the government's accelerated budget disbursements for economic stimulus, the construction material prices are likely to rise in the third quarter.

The Director also noted that geopolitical conflicts in some regions had caused significant volatility and an upward trend in prices of commodities such as petroleum, energy, and metals. These external factors pose substantial risks and uncertainties, requiring close monitoring and evaluation.

China

China's timber import report for the first half of the year released

According to data from the General Administration of Customs, China's timber imports reached US$5.811 billion (approximately 41.744 billion yuan) in the first half of this year, marking a year-on-year decrease of 14.29%. The import volume totaled 28.94 million cubic meters, down 11.7% compared to the same period last year.

Among these, log imports amounted to 16.79 million cubic meters, accounting for 58% of the total import volume, with a year-on-year decline of 10.8%. The import value of logs was US$2.695 billion, reflecting a 17.6% decrease. The average unit price of imported logs fell by 7.7% year-on-year during this period.

Sawnwood imports reached 12.15 million cubic meters, down 12.9% year-on-year, with an import value of US$3.117 billion, representing a 13.1% decrease.

Overall, both log and sawnwood imports showed double-digit declines compared to the same period last year. However, based on quarterly import trends, second-quarter imports of both logs and sawnwood increased by 8.16% compared to the first quarter.