Thai rubberwood furniture will enjoy another 3-5 lucrative years in European markets, as the local rubber industry is among a handful of timber and wood product sectors that conform to Europe's strict new regulations on timber imports.

The Thai rubberwood furniture is advanced compared with those in other major rubber-growing countries such as Indonesia and Malaysia, said Luckchai Kittipol, a former chairman of the Thai Rubber Association.

The industry has made improvements to comply with EU timber import requirements.

The EU's new Forest Law Enforcement, Governance and Trade action plan will start in March.

The new rule prohibits the placement of illegally harvested timber and products derived from such timber in the EU market.

Mr Luckchai said most Thai rubber trees are now grown on legitimate land.

The Office of the Rubber Replanting Aid Fund has offered farmers 26,000 baht a rai over the last six years to grow rubber on legitimate land.

Thai rubber furniture also uses only rubberwood from domestic supply, as the wood must be processed within a short period after felling or the timber will be damaged, said Mr Luckchai.

However, he admitted the EU's strict new regulations on timber imports will hit other types of Thai timber and the wood product industry hard.

Mr Luckchai urged the Thai government to issue appropriate legislation to make private firms comply with EU timber import legislation.

Thailand itself has banned exports of processed wood since 1987, while current laws focus mainly on wood conservation.

The country is a net importer of timber, with 10 million cubic metres of imports a year.

Four million cu m of timber are planted domestically.

The Industrial Works Department estimates there are 12,000 wood traders and manufacturers in Thailand including 2,700 in Bangkok.

The Office of Small and Medium Enterprises Promotion puts the number of wood traders and manufacturers at 80,000, of which 95% are SMEs.

Furniture exports last year totalled 34 billion baht and timber exports 80 billion.

"The government must accelerate measures to cushion any possible adverse impacts the regulation will have on the Thai timber and wood industry," said Mr Luckchai.

So far, Indonesia has signed a voluntary partnership agreement to comply with the new EU regulations, while Thailand is expected to join similar agreement soon.

The Thai cabinet has already approved a framework of voluntary partnership agreement by the Natural Resource and Environment Ministry.

Deputy government spokesman Parkdehans Himathongkom said the framework for such an agreement is now pending parliamentary approval.

Complying with the EU's new timber regulation will help to save Thailand's timber exports to that market, worth 10 billion baht a year, he said.

Mr Parkdehans added that Thai companies should also be required to conduct due diligence to ensure that timber exported to the EU has been harvested legally and sustainably.

Source: Bankok Post Business

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com