Phuentsholing—Timber exports from Bhutan are on the rise, thanks to an increased demand from Indian markets.

Over the past four and a half months, more than 146,953 cubic feet (cft) of timber have been transshipped from the Natural Resources Development Corporation Limited (NRDCL) Toorsa Depot in Phuentsholing, with additional prepaid stocks currently being delivered.

Records from NRDCL’s regional office in Phuentsholing indicate a significant uptick in export volumes. Timber exports shot up from 50,606.26 cft over the previous three months to 71,825.74 cft in July alone. The export growth trajectory continued into August, with 24,521.68 cft of timber already transshipped.

NRDCL’s Regional Manager Nawang Denden said that the depot is currently being restocked following the clearance of initial stocks. “Advance payments have been received for the remaining logs, which are now being transported in five to six truckloads of 18 and 22-wheeler trucks daily,” he said.

The initial phase of the timber exports, which began in October 2023, encountered a host of challenges, mainly related to system and procedural adjustments. “Our focus was also more on timber extraction during that time, and we were only able to export a few truckloads as part of a trial run,” Nawang Denden said. “However, we are now seeing a significant upward trend in export volumes.”

In fact, the monthly demand from Indian markets is equivalent to NRDCL’s annual production. “There are no marketing challenges for timber,” the regional manager said.

Timbers are exported to various markets in India, including Gandhidham in Gujarat, Srinagar in Jammu and Kashmir, and Delhi.The NRDCL has established connections with eight consignees, four of whom are bound by a three-year Memoranda of Understanding (MoUs).

“We are focusing on larger industries, as the MoU agreements require consignees to make advance payments, including a security deposit of about Nu 1 million,” Nawang Denden said.

In February, the NRDCL also piloted conifer timber export auctions in Phuentsholing and Gelephu, with the highest bid reaching Nu 360 per cft. Blue pine and mixed conifers, which consist of about five different species, are being exported at prices ranging from Nu 270 to Nu 500 per cft, depending on type and quality.

The government has requested the Indian government to include 20 additional timber species for export, including hardwoods like Augur and softwoods such as Alder (Gama shing).

Despite improvements in the process, exporters still face challenges such as documentation mismatch and delays at check posts due to extensive paperwork.

Exporters are optimistic about a surge in business due to the high demand and a shortage of suppliers in India, where forests are reserved and tree stocks are depleting.

Varun Poudel is preparing to export his first 2,000 cft of timber this week, after exploring markets in Delhi, Bangalore, and Kolkata. “Some proprietors manage multiple factories with a demand for over 100 truckloads. If we can meet that demand, it will be a significant boost,” he said.

He pointed out that documentation and lengthy approval process caused unnecessary delays. “I need to apply for approval at the regional office even after it has been approved by the head office in Thimphu,” he said.

Timber is harvested from Hongtsho and Ramtoto in Thimphu, as well as Chumey in Bumthang, and transported to Phuentsholing for its logistical advantages.

Except for lower Wangdue and Tsirang, the government has initiated scientific thinning nationwide, aiming for annual exports of 10.7 million cft from 2024 to 2026 to improve the trade balance and generate foreign exchange.

The government aims to generate Nu 10 billion in revenue from wood and wood product exports over the next five years. This initiative, started towards the end of 2023, aims to reduce imports and enhance revenue generation.

According to Bhutan Trade Statistics, imports of wood and wood-based products fell to Nu 3.56 billion in 2023 from Nu 4.28 billion in 2022, while exports increased to Nu 263.29 million, up from Nu 217.87 million the previous year.

Logging operations in the country were nationalised in 1979. Two decades later, in 1999, the government banned the export of timber to bolster forest conservation and ensure affordable timber for rural development.

Source:  kuenselonline.com