Indonesia

Indonesia's Trade Ministry Announces January Reference Prices for Wood Products

Indonesia's Ministry of Trade has announced the benchmark export prices (HPE) for wood products for January 2026. For January 2026, the HPE has increased for several types of processed wood, including veneer from both natural and plantation forests; boards for packaging; and processed meranti and merbau wood with a cross-section of 1000-4000 square millimeters. However, the price for processed teak wood within the same cross-section range has declined.

Indonesian Industry Worries About Supply Chain Impact from PBPH License Revocations

Recently, the Indonesian government announced the revocation of Forest Utilization Business Licenses (PBPH) for 22 companies across three provinces: Aceh, North Sumatra, and West Sumatra. The total area affected covers 1,010,991 hectares.

In response, Purwadi Soeprihanto, Secretary General of the Indonesian Forestry Entrepreneurs Association (APHI), expressed concern that this move would impact the sustainability of the forestry supply chain, given the sector's heavy reliance on domestic raw material supply. A reduction in upstream raw material supply will directly affect downstream production processes, subsequently impacting the export performance and competitiveness of Indonesian forest products.

Preliminary estimates suggest that this wave of PBPH license cancellations in the three Sumatran provinces could lead to the loss of approximately 19,000 jobs across the upstream and downstream sectors. It is also projected to reduce domestic forest product trade value, state non-tax revenue (PNBP), export taxes, and foreign exchange earnings by a total of $125.29 million annually.

Indonesia Joins Coalition to Grow Carbon Markets

Indonesia has officially joined the Coalition to Grow Carbon Markets, becoming its 11th government member. This marks a significant step in strengthening international climate finance and expanding high-integrity carbon markets. Indonesia's membership brings substantial expertise in forest carbon projects and nature-based solutions to the coalition.

The Coalition to Grow Carbon Markets was launched during London Climate Action Week in June 2025. Other member countries include Kenya, Singapore, the United Kingdom, Canada, France, Panama, Peru, Switzerland, New Zealand, and Zambia. The coalition aims to accelerate global emissions reduction by enhancing incentives for private sector investment in high-integrity carbon credits, particularly those related to nature-based solutions.

Ministry of Forestry Strengthens Forest Governance, Proposes Regional Forestry Coordination Centers

In a working meeting with the House of Representatives Commission IV on January 19, Indonesia's Vice Minister of Forestry, Rohmat Marzuki, emphasized that Indonesia's forests are a vital national strategic asset, covering approximately 119.67 million hectares, or about 62.5% of the country's total land area. These forests include conservation forests, protected forests, and production forests, each playing crucial ecological, social, and economic roles.

Rohmat stated that the Ministry of Forestry will continue to protect the ecological functions of forests while meeting national development needs. This will be achieved by implementing stricter, more integrated, and governance-based controls on land use changes within forest areas.

Regarding institutional strengthening, the Ministry has proposed the establishment of 35 Regional Forestry Coordination Centers (Puskorwilhut). These centers are designed to enhance coordination, integrate forestry policies, and improve the efficiency of forest monitoring and control at the regional level.

Malaysia

Trump Delays Furniture Tariffs, Malaysian Industry Sees "Limited Relief"

Recently, U.S. President Donald Trump postponed plans to impose additional tariffs on upholstered furniture, cabinets, and dressers, maintaining the current rate of 25%. Malaysian timber industry players indicate that the U.S. decision to delay additional tariffs on certain furniture products offers only limited relief for Malaysian manufacturers currently grappling with rising domestic costs and weak demand in the U.S. market.

Desmond Tan Boon Hai, Chairman of the Malaysian Furniture Council, noted that the decision hasn't significantly boosted Malaysia's competitiveness since many other countries face the same tariff rate. For some local manufacturers, the extension of the 25% tariff has a limited impact, primarily affecting cabinets, dressers, and upholstered furniture.

Tan added that while the industry hopes the government can renegotiate tariffs on Malaysian-made furniture with Washington, the ultimate success of any bilateral agreement remains uncertain. Addressing domestic challenges, he suggested the government could provide more direct support by reviewing policies that significantly increase operational costs for furniture manufacturers. These include the expanded scope of the Sales and Service Tax (SST), mandatory EPF contributions for foreign workers, adjustments to the minimum wage, realignment of fuel and electricity prices, and the multi-tiered levy on foreign workers set to take effect this year.

Malaysia's Furniture Export Landscape

Malaysia's primary furniture exports include solid wood dining tables, chairs, and upholstered sofas, with a growing market share for modular furniture. According to data from the Malaysia External Trade Development Corporation (MATRADE), Malaysia's total furniture exports in 2024 stood at RM 12.83 billion.

The United States remains the largest market, with exports valued at RM 6.05 billion, followed by Singapore (RM 1.18 billion), Australia (RM 683.6 million), Japan (RM 629.8 million), and the United Kingdom (RM 543.5 million).

On April 2 last year, the U.S. announced tariffs on imports from nearly all countries, including Malaysia. Malaysian exports were initially subject to a 25% tariff, but an executive order signed on August 1 reduced it to 19%. However, in September, new 25% tariffs were imposed on kitchen cabinets and upholstered furniture, taking effect in October.

Malaysia Construction Hardwood Plywood Market Outlook 2026-2033

Verified Market Reports has released its "Malaysia Construction Hardwood Plywood Market Size, Strategic Outlook, and Forecast (2026-2033)". The report indicates steady growth in this market, driven by urbanization, infrastructure development, and a rising middle class, projecting a compound annual growth rate of approximately 4.5% over the next five years. Regionally, strong demand is noted in high-growth areas like Kuala Lumpur, Penang, and Johor, fueled primarily by high-end residential development and industrial expansion. The sector is characterized by a mix of domestic production and reliance on imports, with a focus on sustainable, high-quality products that meet green building standards.

The report points out that Malaysia's hardwood plywood import and export landscape is influenced by regional trade policies and supply chain factors. The industry relies on imports for approximately 60% of its raw materials and finished plywood, primarily from China, Indonesia, and Vietnam, making the market susceptible to tariff fluctuations and supply chain disruptions. On the export side, Malaysia's finished plywood is mainly shipped to Singapore, the Middle East, and Australia, with trade volume growing at an average annual rate of 3.5%.

Thailand

DSI Seizes THB 2.5 Billion in Illegal Timber

Thailand's Department of Special Investigation (DSI), in coordination with the National Park Administration and the Royal Forest Department, has dismantled a timber smuggling network. A raid on warehouse facilities in an industrial estate in Chachoengsao Province uncovered over 1,598 cubic meters of illegal timber, with an estimated export value exceeding THB 2.5 billion.

Investigations revealed that the timber was illegally harvested from protected areas. It was then transported to Chiang Mai and Nong Khai provinces for document processing before being moved to Chachoengsao for export. The criminal network employed forged documents and concealed routes to evade detection, with the timber ultimately destined for China and Vietnam.

The DSI has stated it will continue to broaden its investigation to identify all involved parties and pursue legal action. Authorities are also collaborating with partner agencies to intensify efforts against illegal logging and cross-border timber smuggling, aiming to protect Thailand's forest resources and public interest.

China

National Bureau of Statistics: Furniture Manufacturing Revenue Drops 10.7% in 2025

In 2025, China's furniture manufacturing sector recorded operating revenue of RMB 612.51 billion, a year-on-year decrease of 10.7%. Total profit for the sector reached RMB 32.81 billion, down 12.1% year-on-year.

From a market perspective, the cyclical adjustment of the real estate market hindered the transmission of downstream furniture demand. The pace of recovery in both retail and project-based channels failed to keep up with the broader market trend. Amidst intensifying price competition, rigid costs for raw materials, labor, and channel operations severely squeezed corporate profit margins.

The upstream segment of the industry chain also underwent significant adjustment. In 2025, operating revenue for the wood processing and wood, bamboo, rattan, palm, and grass products industry fell by 14.6% year-on-year, while the decline in total profit reached a substantial 38.3%.

China's Log and Sawn Timber Imports See Decline in Both Volume and Value in 2025

Customs data reveals a significant contraction in China's log and sawnwood import market in 2025, with both import volume and value declining.

Import Volume: In December 2025, China imported 4.373 million cubic meters of logs and sawnwood, a slight year-on-year decrease of 0.2%, indicating stable import activity towards year-end. For the full year, cumulative imports from January to December totaled 55.445 million cubic meters, an 11.8% decrease year-on-year. This represents a reduction of over 7 million cubic meters compared to the previous year, marking the first time in nearly a decade that annual imports have fallen below 60 million cubic meters.

Import Value: The import value of logs and sawnwood in December 2025 reached US$923.2 million, a marginal year-on-year decline of 0.1%, largely consistent with the monthly volume decrease. The total import value for the year stood at US$11.2172 billion, down 13.9% year-on-year. The steeper decline in value compared to volume reflects shifting dynamics in the overall cost of imported timber. The pattern of simultaneous declines in both volume and value further confirms the contractionary trend in the import market.