Softness in poplar prices will boost industry

What is the current situation regarding raw material prices, especially wood?

Wood has become somewhat cheaper Right now. This trend didn’t happen suddenly, but developed gradually. Even during the rainy season, supply remained strong. Normally, rains affect cutting and supply, which pushes prices up. But this time, it was the opposite — supply was so much that prices dropped. At present, top-quality wood in the market is selling at around ₹1,400 per quintal. Good-quality average poplar is available for ₹1,200–1,250. Looking at the availability of raw material, we are positive about the future. We hope the situation will improve further in the coming days.

Does that mean supply is more than the demand?

That’s exactly how the market works — prices fall if supply is high and buyers are fewer. That’s what happened this time. Also, it’s true that customers are holding back right now. Many are waiting for further price drop, and that too creates pressure on the market.

Do you think this price fall will last long?

Predicting the market is always difficult. But in my view, prices may remain steady as of now for some time. The reason is simple: supply lines are strong. Until the stock is consumed and demand normalizes, prices are unlikely to rise quickly. Yes, poplar wood is always in demand. But no trader can predict with 100% certainty, when or how much prices will change. As because eucalyptus has demand in other sectors, the chances of any big changes in its demand or prices are low.

Do GST rate changes had any impact?

Not directly. GST rate is still 18%, with no change. Yes, the reduced GST in some other sectors, a positive did affect in market sentiment. People expect that demand across sectors will rise, which will boost confidence of everyone. But the real reason for current price movements in timber is supply-demand balance, not GST.

Any impact of international conditions, especially U.S. policies?

Yes, there is. When a big economy like the U.S. is hit, the effects are felt globally. With job cuts and fears of recession in the U.S., the Indian government faced the challenge of strengthening domestic demand. That’s why steps were taken to boost local consumption. India’s biggest strength is its population. With 1.4–1.45 billion people, demand always exists here.

What is your current production strategy?

New factories in the industry are now updated with highly modern machines like 15-daylight and 20-daylight presses. Their layout and technology are advanced, which increases their production capacity and reduces overhead costs. Our plant is relatively old. I believe we should work according to our resources and expenses. If resources are limited, we should only produce as much as we can handle. Depending on market demand and trends, we plan our production strategy.

What about GST reforms?

Honestly, not much has changed. There is talk about lowering GST rates, but real reforms happen only when systems become simpler. Traders still get stuck in paperwork. Some processes, like new registration, have become easier, but there is no major changes in day-to-day business. Real GST reform will be assumed, when paperwork reduces and traders save time. Currently, the government focuses more on making new laws rather than ensuring proper implementation.

What about pollution control strictness?

It’s true that control pollution control rules apply to everyone. There would have been more resistance if they targeted only a few. But when all are equally affected, solutions will emerge gradually. The problem is that the government is lax in enforcing the rules, it makes. Announcements are made, but then ignored. Everyone is left confused about what exactly needs to be done. This creates complications because there’s no clarity.

What is the situation in the industry regarding BIS licenses?

Those who already have licenses, doesn’t have any major issues. Their business was already running smoothly and will continue as it is, though costs have gone up. The real problem are those, who are operating without licenses. The government isn’t strict with them. In meetings, officials suggested associations should provide lists of unlicensed operators. But that’s not the industry’s job — the government should inspect and act on its own.

Will everyone need separate licenses for F10 to F50?

No, only one license is needed. But factories will have to provide samples for all grades separately. Overall, with the increase in both factory and market samples, licensers are in deep mental and financial stress.

Recently, some factories had fire incidents.

Yes, three factories caught fire, perhaps near their oil boilers. All these accidents were similar in nature, as far as I guess. Fire in a plywood factory means losses worth lakhs. Each factory reportedly lost around ₹60–70 lakh. The problem is, insurance doesn’t cover full losses. Even if fully insured, one can recover only about 70–80%. But the documentation process is so complicated, that insured is frustrated most of the times. 

What do you see as the biggest challenges for the industry?

• First is the technology gap — new factories with modern machines are marching ahead, while old plants are lagging behind.
• Second is rules and regulations — the government keeps making new ones, but their implementation is unclear.
• Third is licenses — unlicensed operators continue producing in absence of strict action.
• Fourth is market uncertainty — prices of raw material and finished goods keep fluctuating, leaving no stability for industrialists.

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