Teak Markets in Asia and Grading Criteria

Teak is a pest-resistant and durable hardwood, which represents one of the world’s most traded and valued timbers. Similarly, teak is used in everything from traditional shipbuilding and construction to furniture confection and cremation ceremonies. Originally from South Asia, the largest consumers of teak today are India and China. In the case of India, the country accounts for 75% of global teak imports. Simultaneously, India is a major manufacturer of furniture made with teak; during 2012, the country exported US$592 million worth of teak furniture. Likewise, China is the world’s largest wood importer, totaling US$60 billion in 2012, and importing US$41 million worth of sawn teak timber that same year. Like India, China is a major manufacturer of wood furniture, but it does not focus exclusively on teak hardwoods. During 2012, China exported approximately US$17 billion worth of wooden furniture. Unsurprisingly, the largest importers of wooden furniture are the United States, Germany, France, and the United Kingdom. Increasingly, these western markets are requiring fair trade certificates and enforcing quality assuring legislation as it relates to wooden products coming from Asia in order to ensure their legal origin and sustainable manufacturing.

On the other hand, the largest producer and exporter of teak in recent years has been Burma (Myanmar). However, new legislation aimed at increasing value added manufacturing within Burma, as well as protecting domestic teak forests, will affect the country’s teak export quantities during the coming years. In the meantime, teak cultivation and trade throughout Central and South America has been increasing steadily. Today, countries such as Costa Rica, El Salvador, Panama, Ecuador, and Brazil, amongst others, have become major teak exporters towards India and China. Similarly, countries throughout sub-Saharan Africa are increasing their teak output and trade.

Teak Markets in Asia and Grading Criteria

Teak wood is graded based on strict quality criteria. Teak logs with the highest rating, Grade A, must meet the following characteristics: be more than 70% heartwood (not bark or sapwood), not have cracks or holes, not be bent, and it cannot have more than two knots larger than 5 centimeters in diameter every two meters. Meanwhile, Grade B teak logs must meet the following criteria: be between 50% and 70% heartwood, it cannot have more than five knots over 10 centimeters in diameter in a span of two meters, and it can only be slightly bent in just one direction. The quality and grade of teak logs is a key factor in determining market placement and international pricing. Farmers and harvesters of teak must monitor, trim, thin, and prune trees for years and decades, from germination all the way to full maturity, in order to ensure that all of the criteria mentioned above are respected. Healthy teak forests and farms are free from insects and pests; branches are thinned on a monthly basis; tree crowns are pruned; and trees grow straight up. Properly managing a teak plantation and ensuring quality trees is the key to a profitable agribusiness project.

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