India potentially strong market for Canadian lumber, energy

Published: January 15, 2014

ROSS MAROWITS
THE CANADIAN PRESS

India Canada

Workers pile logs at a softwood lumber sawmill in Saguenay, Que. THE CANADIAN PRESS/Jacques Boissinot

MONTREAL — India is a strong potential growth market for Canadian lumber despite misinformation about wood construction that have limited exports even as they have soared in neighbouring China, Canada’s resource minister said Wednesday.

“This is the fourth-largest consumer market in the world. For us to ignore that would make no sense and we’re not and we see enormous potential,” Joe Oliver said during a conference call from Mumbai, where he’s on a six-day trade mission.

The federal government announced it is investing an additional $600,000 to spur efforts to boost lumber exports to a market with about 1.2 billion people.

Ottawa has already provided $1.6 million to Forest Innovation Investment India (FII India), Canada’s forest products market development office, which is also supported by the B.C. government.

Oliver said more effort is required to sell the Canadian lumber brand and overcome the lack of a tradition in using wood for construction and myths about lumber being unable to withstand India’s intense heat and humidity.

“You’ve got to put in the time. You don’t necessarily have instant wins — you have gradual improvement and increasing recognition,” he said.

The minister said Indian demand for imports is a decade behind China. While Chinese imports from Canada soared by 1,000 per cent between 2007 and 2012, Indian imports shrunk in one year to just 53,000 cubic metres of B.C. lumber valued at $8.7 million.

“China was very small too 10 years ago and yet the Chinese market was crucial in helping our forestry industry emerge from the recession when residential construction in United States basically collapsed.”

He said exponential growth in India fuelled by rising disposable incomes will accelerate demand for all kinds of Canadian products, including lumber, oil and gas, mining products and nuclear power.

“There’s nothing at the moment but when it happens we’re looking at an additional market in the billions.”

Oliver also said there is growing interest by India in investing in Canada and said the impending election of a new prime minister to replace Manmohan Singh won’t impede the potential “irrespective of who wins.”

He said efforts to build Indian lumber imports must be realistic by initially focusing on specialty products like door and window frames and furniture, instead of building construction that has traditionally fallen to other materials.

Analyst Paul Quinn of RBC Capital Markets says Indian lumber imports will gradually increase but efforts face transportation and infrastructure challenges to get the material to local markets. Internal dynamics of doing business in India can also be more challenging than China where government involvement can clear roadblocks.

“I think it’s going to be a slower growth story than what we’ve seen with China but I think it’s going to be yet another place to put lumber which continues to tighten the market,” he said from Vancouver.

Quinn sees Canfor Corp. (TSX:CFP) and West Fraser Timbing (TSX:WFT) being the main beneficiaries because of the volumes they already have in the country.

North American lumber production increased 1.1 per cent in October from the prior year with Canadian output rising 3.6 per cent and by 10.7 per cent from September. Shipments decreased 0.7 per cent from the prior year on a 1.2 per cent decrease in Canada.

Lumber shipments from British Columbia to China were up 6.9 per cent for the first 11 months of 2013, while prices have risen five per cent over the last month after climbing 19 per cent in 2013.

Quinn said he expects prices in 2014 will be similar to last year, but with less volatility. He forecasts they will average US$360 per thousand board feet for 2014, down from US$372 as of Jan. 10, but rise to US$410 for 2015 and US$435 for 2016 as U.S. housing starts reach 1.3 million in 2016.

The analyst expects Canada’s forest products companies will post stronger results in the upcoming fourth quarter and full year and will feel the positive effects of a lower Canadian dollar in the first quarter.

“It looks like a pretty significant tailwind building for the first quarter,” he said, noting that the loonie has dropped to near 91 cents US from the fourth-quarter average above 95 cents US.

Related Stories

13:25ET 15-01-14

[+]

Tags: , , , , , , ,



Readers Comments (0)

Comments are closed.

Featured

ADOPTION INDIA

India’s ‘shameful’ adoption record

With 30 million orphans, just 2,500 adoptions took place in India in 2014 RAMA LAKSHMI WASHINGTON POST When Shreya Roy applied to adopt an orphan…
Continue Reading »

allergy-death-manslaughter

Restaurateur faces manslaughter charge after customer died of peanut allergy

IANS London – An Indian restaurant owner in Britain has been charged with manslaughter following the death of a customer after eating curry prepared at…
Continue Reading »

ferocious pets

Exotic Pets: African lioness kept as pet in central Pakistan gives birth to litter of 5 cubs

THE ASSOCIATED PRESS MULTAN, Pakistan — It’s a baby boom for the owner of a pet lioness in central Pakistan. The African lioness named Queen…
Continue Reading »

LOCAL NEWS

Vancouver car sales

Planning to buy a new car? Check out what’s on offer at Like It Buy It Vancouver

POSTMEDIA NEWS Act fast to buy your dream car at a discount. A rare new Roush RS3 race car is on sale now for 25…
Continue Reading »

Vancouver Yoga Fashion

Lululemon sees surge in fourth-quarter sales

MICHELLE MCQUIGGE THE CANADIAN PRESS Strong North American sales helped drive fourth-quarter results at Lululemon Athletica Inc., but the Vancouver-based retailer says its hopes for…
Continue Reading »

Bollywood

Canadian YouTube sensation Superwoman meets Bollywood’s ‘Dilwale’

IANS Mumbai – Indo-Canadian YouTube sensation Lilly Singh, famously known as Superwoman, met filmmaker Rohit Shetty and actor Varun Dhawan on the set of their…
Continue Reading »

Don't Miss...

Vancouver car sales

Planning to buy a new car? Check out what’s on offer at Like It Buy It Vancouver

POSTMEDIA NEWS Act fast to buy your dream car at a discount. A rare new Roush RS3 race car is on sale now for 25…
Continue Reading »

India-Vancouver Desi

Justin Bieber’s roast on Indian TV on Fools’ Day

IANS New Delhi – Singer Justin Bieber’s infamous ‘roast’, hosted by Kevin Hart, will hit Indian television on April 1, just months after the controversial…
Continue Reading »

messy custody battle-desi lingerie model

Jeremy Renner’s messy divorce from B.C. model gets messier as custody battle rages

VANCOUVER DESI A B.C. woman who was married to Hollywood actor Jeremy Renner is being accused of being a gold digger and blackmailer who has…
Continue Reading »

India-Canada-Vancouver Desi

Indian PM Narendra Modi to visit Vancouver, Toronto and Ottawa in April

VANCOUVER DESI Indian Prime Minister Narendra Modi is coming to Canada in April, Prime Minister Stephen Harper announced Wednesday. Modi will be visiting Toronto, Ottawa…
Continue Reading »

India marriage-abuse-prostitution-poverty

Indian child bride became a mother of three at age 14, was forced into prostitution by husband, then abondoned

HINDUSTAN TIMES She was barely 10 when her parents sold her off, became a mother of three by the age of 14 and was abandoned…
Continue Reading »


Bollywood Latest

Bollywood bride

Bollywood actress Anushka Sharma becomes a bride, not for Kohli but 7Up

IANS New Delhi – “Band Baaja Baaraat” actress Anushka Sharma, who was spotted at the India-Australia cricket match in Sydney on Thursday, had decked up…
Continue Reading »

Bollywood-Cricket

Bollywood filmmaker Ram Gopal Varma’s cricket bomb: I am sooooo happyyy India lost

HINDUSTAN TIMES We have an advice for filmmaker Ram Gopal Varma and it’s a simple one: Think before you tweet. Hot on the heels on…
Continue Reading »

Bollywood actor Salman Khan

Bollywood actor Salman Khan’s statement to be recorded in hit-and-run case

IANS Mumbai – Bollywood mega star Salman Khan will step into the witness box on Friday to record his statement on the 13-year-old hit-and-run case…
Continue Reading »