The Reserve Bank of India's (RBI) recently issued a press release on its March, mid-quarter economic review:
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=28335

It outlines the rationale for the 25 basis point cut to 7.5% in the rate at which it lends to banks, with other rates remaining unchanged. The review notes that since the Third Quarter Review January 2013, global financial market conditions have improved. However, domestic growth has decelerated significantly, affected by relatively high levels of inflation.

The review indicates that India’s GDP growth in Q3 of 2012-13, at 4.5 per cent, was the slowest in the past 15 quarters. Of particular concern is the weaker output of the services sector, the mainstay of overall growth. While growth in industrial production was positive in January, capital goods production and mining activity continued to contract.

Lower GDP growth forecast
In the quarter under review India’s trade deficit narrowed significantly as exports increased and non-oil imports fell. However, between April 2012 and February 203 the trade deficit was higher than a year ago.
The review notes that there are still major risks in the global economy. Nevertheless, leading global indicators are positive but future growth is expected to be very slow.

On the domestic front, the priorities are to raise the growth rate, restrain inflation pressures and mitigate the possible impact on the economy from external forces. The Central Statistics Office has projected GDP growth for 2012-13 to be lower than the Reserve Bank’s baseline projection of 5.5 per cent, reflecting slower than expected growth in both industry and services.

The key to reinvigorating growth, says the RBI, is accelerating investment. The challenge in returning the economy to a high growth trajectory is revival of investment. A competitive interest rate is necessary for this, but lower interest rates alone cannot solve the problem. Issues such as bridging supply constraints, fiscal consolidation and improving governance need to be addressed says the RBI.

Extending new areas under rubber plantations
Kerala state is the centre for latex production in India. Tripura in the north east of the country is the second Indian state to follow the example of Kerala in developing rubberwood plantations. To-date around 57,600 hectares of plantations have been established generating employment for more than 50,000.

Having witnessed the benefits of investment in rubberwood plantations, the state of Arunachal also aims to establish a commercial rubberwood plantation sector. In collaboration with the Rubber Board of India, the state government in Arunachal aims to produce 100,000 tonnes of latex. The rubberwood plantations will yield roundwood and also facilitate production of minor forest products such as honey.

Currently, Gujarat state has only a small area of rubberwood plantations but that may soon change. The state has a received a proposal from a tyre manufacturer to build a factory in the state. To encourage this investment, the state government plans to invest in rubberwood plantations to provide the latex raw material for this new industry. The establishment of commercial rubberwood plantations will also provide an opportunity for growth in the wood processing sector in the state as rubberwood logs will be available when the plantations are periodically felled and replanted.

Sales of Teak and other hardwoods from Indian forests
Auction sales of teak and other hardwoods were concluded in the government forest depots in Western India during March. Prices for freshly harvested logs were good but the price received for log lots felled some time ago were low. Average prices during the March auction are shown below. Prices are per cubic foot ex depot.

Prices for Haldu (Adina cordifolia) and Laurel (Terminalia tomentosa) logs

Imported Teak logs
Supplies and shipments remain stable as do price levels. The turnaround in imported timber is very quick due to the shortage of domestic hardwoods.

Imported Plantation Teak Prices (C&F)

Variations exist based on lengths and average girths of logs in a parcel. Prices also vary with measurement allowances given for bark and sap in different countries of origin.

Domestic sawnwood prices
Prices for air dried sawnwood remain unchanged. Prices are shown below as per cubic foot, ex-sawmill.

Domestic Ex-mill Sawnwood Prices for Imported Timber

Prices for Myanmar Teak sawn in India

The price range is the result of variations in length and cross section.

The trend of replacing Teak with other durable tropical hardwoods, continues because of high prices.

Imported (KD 12%) sawn wood prices per cft ex-warehouse

Plywood market news
The rising costs of peeler logs, glues and other chemicals, transport charges and labour charges are affecting profitability in the plywood industry. Manufacturers from Punjab and Kerala recently met and agreed that price increases are inevitable. Analysts are concerned that the market may react negatively to this proposed price increase. Plywood prices after the agreed increases are shown below.

WBP Marine grade from domestic mills

Domestic Ex-warehouse Prices for Locally Manufactured Plywood