Malaysia: Ensuring continued access to the EU timber market

03 June 2010

Malaysia: Ensuring continued access to the EU timber market

The Timber Exporters’ Association of Malaysia (TEAM) has urged the federal government to sign the Voluntary Partnership Agreement (VPA) under the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan with the European Union (EU) in order that Malaysia can gain wider access to the EU timber market.
To date, Ghana, the Republic of Congo and Cameroon have signed VPAs with the EU.
Access to the EU timber market is becoming a critical issue for Malaysian timber producers. Due to the debt crisis in Europe, the Euro has weakened against the Malaysian Ringgit. This has the effect of making Malaysian exports more expensive.

Sabah furniture manufacturers seek relief from high costs
Furniture exporters from Sabah in East Malaysia complain that their market position is at risk due to high production costs, increasing ocean freight charges, unreliable power supply and tight raw material supplies.
The reason for the complaint is that the fee for a furniture export license is RM5,000 in Sabah, compared to only RM200 in West Malaysia. The EU market, which accounted for some 90% of Sabah’s furniture exports has weaken and as a result, Sabah's position as the nation's leading outdoor furniture exporter is at risk.
Furniture manufacturers from Sabah are also seeking aid from the federal government to compensate for production losses caused by power blackouts.