Indonesia

Indonesian Furniture Industry Achieves US$743,000 in Potential Transactions at Hungarian Exhibition

From March 25 to 29, Indonesian companies participated in the 2026 "Home Design Exhibition" in Budapest, Hungary.

An official said  that Indonesian furniture and home décor products recorded potential transactions worth US$743,070 at the Home Design exhibitiont, underscoring growing demand from Central and Eastern Europe.

Trade relations between Indonesia and Hungary continue to strengthen and consolidate. According to Eurostat data, Hungary's imports from Indonesia grew at an average annual rate of 9.47% between 2021 and 2025.

Indonesia Tightens Forest Carbon Trading Rules

On April 13, the Indonesian government officially issued Minister of Forestry Regulation (Permenhut) No. 6 of 2026, which regulates carbon trading procedures under the forestry sector's greenhouse gas (GHG) emission offset mechanism.

Through this policy, the government has provided a clearer roadmap for forestry carbon trading, covering emission reduction targets and the scale of areas involved.

The scope of participants in carbon trading has also been broadened, no longer limited to corporations but now including community forestry groups, indigenous communities, private forest landowners, and carbon service management institutions.

The minister revealed that it is estimated that between 2024 and 2050, the potential scale of Indonesia's carbon market could reach 13.4 billion tonnes of CO2 equivalent. This potential comes from various sectors, including land restoration, production forests, social forests, and indigenous forests.

Indonesia Faces Longer Dry Season in 2026

On April 6, Indonesian Minister of Forestry Raja Juli Antoni stated at a press conference that this year's dry season will arrive earlier and last longer than in previous years, potentially leading to forest and land fire risks exceeding those of last year.

Data from the Sipongi monitoring system showed 702 fire hotspots recorded between January 1 and April 5, 2026, a sharp increase compared to 125 hotspots during the same period in 2025.

As of the end of March, approximately 7% of Indonesia's seasonal areas had entered the dry season; the dry season coverage is expected to expand significantly between April and June.

Indonesia to Halt Diesel Imports, Shift to Palm Oil Fuel

Effective July 1, 2026, Indonesia will stop importing diesel as part of the full implementation of B50 biofuel; B50 is a fuel blend consisting of 50% diesel and 50% crude palm oil (CPO).

The Minister of Agriculture explained that this move is an important part of the government's commitment to strengthening national energy independence by utilising palm oil as an alternative fuel.

He further explained that palm oil can not only be processed and refined into diesel but also converted into gasoline and ethanol; the research, development, and promotion of related technologies are currently being accelerated.

Malaysia

Sarawak Reduces Natural Forest Timber Royalty Rates

On April 15, the Sarawak government approved a 50% reduction in natural forest timber royalty rates and certain statutory fees to ease cost pressures on industry players and address current market challenges.

The Sarawak Forest Department issued a statement saying that the measure covers all Forest Timber Licences (FTL) and Forest Plantation Licences (LPF), but does not include Wood Industry Tariff H0272502. The move aims to provide timely support to the forestry and timber industry against the backdrop of rising fuel prices, global market instability, supply chain disruptions, and increased operating costs.

The Sarawak Forest Department noted that the industry's focus is shifting towards export business because export-oriented production yields higher profit margins, leading to a contraction in domestic timber processing activities. In this context, the measure is expected to enhance the competitiveness of local processing, thereby helping the industry return to balance.

The department added that annual timber production is expected to stabilize at around 1.73 million cubic metres, reflecting a significant recovery in industry confidence. Currently, the state government is actively promoting large-scale plantation forestry to reduce dependence on natural forest timber.

Sarawak Promotes Timber Industry Transformation

Sarawak Deputy Premier Datuk Amar Awang Tengah Ali Hasan stated that Sarawak is actively promoting the transformation of its timber industry, focusing on developing high-value downstream sectors to enhance overall industrial competitiveness and export value.

Awang Tengah said that Sarawak will focus on developing high-value products such as engineered wood and furniture in the future, and encourages industry players to make good use of wood waste, converting it into products like wood pellets.

In terms of exports, Sarawak exported approximately RM2.5 billion worth of timber and timber products last year, with main products including plywood and veneer, and key export markets including Japan, South Korea, India, and other Asian countries and regions.

Sarawak Government Promotes Establishment of Furniture Parks

The Deputy Minister of Natural Resources and Urban Development of Sarawak stated that the state government is actively promoting the establishment of "Furniture Industrial Parks" in Kuching and Tanjung Manis to drive the timber industry from a traditional export model towards high-value downstream processing.

The development plan for these furniture industrial parks has been underway and a preliminary detailed plan has been completed. Relevant sites in Kuching and Tanjung Manis have been identified, with Tanjung Manis originally being based on the timber industry; this plan can also be seen as an important continuation of the past industrial layout.

The Deputy Minister said that in the past, Sarawak focused more on log exports, but is now shifting to downstream processing to increase product added value, which is an important direction for the transformation of Sarawak's timber industry.

Malaysian Furniture Industry Faces Rising Costs

The Malaysian Furniture Council (MFC) has called on the government to maintain the current minimum wage level of RM1,700.

The council issued a statement saying that the Middle East conflict has led to rising diesel prices, directly affecting upstream suppliers such as sawmills and particleboard factories, causing major disruptions to the supply chain and further pushing up raw material prices. The strengthening of the ringgit has also weakened the competitiveness of the country's products, making Malaysian-made goods more expensive compared to competitors. Overall, various policies and factors over the past two years have led to a 25% to 30% increase in production costs, significantly reducing the bargaining power of local manufacturers.

The statement noted that with the minimum wage review expected to be completed in September, many businesses fear that any further increase from the current RM1,700 will trigger higher inflation and bring more severe knock-on effects.

Peninsular Malaysia Forestry Department Introduces AI and Drones to Combat Illegal Logging

The Minister of Natural Resources and Environmental Sustainability stated that the ministry will soon submit a report on drought and hot weather. He has instructed the Meteorological Department to continuously issue the latest forecasts to assist the Department of Environment, the Ministry of Health, and the National Disaster Management Agency in disaster preparedness.

On the other hand, he pointed out that the Peninsular Malaysia Forestry Department has introduced the latest technologies such as artificial intelligence (AI), geographic information systems (GIS), and drones to more effectively combat illegal logging and other criminal activities.

He stressed that lawbreakers are using increasingly advanced technological equipment, so forest rangers must master modern digital applications to counter the threats.

Thailand

Thailand Pushes Forward with Three Free Trade Agreements

The government is accelerating negotiations on three major free trade agreements (FTAs) – namely Thailand-EU, Thailand-South Korea, and ASEAN-Canada – aiming to conclude them within 2026. This strategy aims to open new markets, attract new investment, and reduce over-reliance on a few specific trading partners.

At the same time, Thailand is preparing for the subsequent implementation of previously signed agreements. The FTA signed between Thailand and the European Free Trade Association (EFTA) has now taken effect and is positioned as a "gateway" to high-income markets; while the FTA signed between Thailand and Sri Lanka is expected to strengthen economic and trade ties with South Asia, thereby expanding Thailand's regional trade base.

Thai Furniture Export Data for January-March

According to data published on the website of the Thai Furniture Association, total exports of furniture and parts from Thailand reached US$495 million in the first quarter of 2026, a year-on-year increase of 23.37%. During the same period, sawn timber exports reached US$336 million, up 3.68% year-on-year; MDF exports reached US$178 million, down 24.15% year-on-year; particleboard exports reached US$107 million, down 19.15% year-on-year.

Thai Government Promotes Legislation of Community Forest Act

On April 28, Deputy Government Spokesperson Ratchada Thanadirek announced the results of the cabinet meeting. She reported that the Prime Minister and Minister of Interior issued directives during the cabinet meeting aimed at advancing the legislative process for the Community Forest Act bill. The goal is to enable people to coexist harmoniously with forests in a sustainable manner. The draft bill aims to empower local residents to jointly protect and maintain forest areas while also benefiting from their conservation efforts.

For example, community members and community committees are allowed to generate income by selling carbon credits. Currently, communities can receive only 5% of such proceeds; however, if the government succeeds in pushing the bill through parliamentary approval, all income from the sale of carbon credits will go directly to the people.

Ratchada further stated that the Prime Minister also issued directives to prepare measures to mitigate the impacts of drought and the El Niño phenomenon, especially as the country enters May – a period typically characterised by dry conditions.

China

China's Sawnwood Import in Q1 2026

In the first quarter of 2026, China's sawnwood imports showed a distinct trend of "shrinking volume and rising prices." According to customs statistics, from January to March, the country imported a total of 5.017 million cubic meters of sawnwood, a year-on-year decrease of 14.1%; the import value fell by 5.6% to US$1.420 billion, while the average unit price rose by 9.9%.

In terms of import sources, Russia remained the largest supplier with 1.935 million cubic meters, but saw a sharp contraction of 28.7% year-on-year, with its market share dropping from 46.5% to 38.6%, while its average price increased by 4.2%. Thailand ranked second with an import volume of 1.048 million cubic meters, a slight decline of 5.9% year-on-year, and an average price increase of 9.3%.

Overall, against the backdrop of ongoing trade frictions, rising logistics costs, and geopolitical risks, the structure of import sources is accelerating its reorganization. The shares of emerging and alternative sources such as Canada, Belarus, Vietnam, and Myanmar are rapidly increasing.

China's Log Imports in Q1 2026

Customs data show that from January to March, the total national log import volume was 7.164 million cubic meters, a decrease of 11.2% year-on-year; the import value was US$1.17 billion, down 13.6% year-on-year; the average import price fell by 2.7% compared to the same period last year.

Overall, log imports in the first quarter showed a comprehensive decline in volume, value, and average price, reflecting low activity in downstream industries such as construction and furniture, as well as sustained destocking pressure. For domestic importers, the downward price trend of softwood (exemplified by radiata pine) may further squeeze industry profit margins; meanwhile, the supply gap created by a sharp drop in U.S. hardwood imports may create alternative opportunities for similar species from Europe, Canada, and other regions.

11 Provinces Announce 76 Key Projects in the Timber Industry

Recently, provinces including Yunnan, Jiangxi, Zhejiang, Anhui, Hubei, Guizhou, Fujian, and Hunan have released their lists of key projects for 2026. Among them, a total of 76 projects related to the timber industry are included. This is the first time in recent years that the timber industry has entered provincial-level key project lists on such a concentrated scale.

The 76 key timber industry projects announced by the 11 provinces cover multiple areas such as wood processing, wood-based panel production, forest chemical industry, comprehensive wood utilization, and forestry biomass energy, focusing on industry keywords like environmental protection, energy efficiency, high-efficiency production, and green development. With the successful implementation of these key projects, the forest products industry is expected to usher in new development across key regions of the country.