Markets
Chart Beat: MDF imports spike in April, likely to remain elevated in FY25
Summary
- The delay in implementing Bureau of Indian Standard quality check norms to February next year could lead to a surge in MDF imports, thus impacting the domestic industry in FY25
The monthly and annual trends in MDF (medium-density fibreboard) imports paint a contrasting picture. In March and April, MDF imports declined sharply by 80% and 60% year-on-year, respectively, to an average of 7,400 tonnes, showed the ministry of commerce data compiled by Emkay Global Financial Services. This compares with the average monthly run rate of around 28,000 tonnes in FY24.
But the month-on-month trends in imports points to a different and worrying scenario. MDF imports rose 80% in April on a month-on-month basis, pointing to an influx of cheap imports entering India from countries such as Vietnam and Indonesia. In effect, realizations of the domestic wood product industry suffered, declining 16% month-on-month in April.
Further, the delay in implementing Bureau of Indian Standard quality check norms to February 2025 could lead to a surge in MDF imports, thus impacting the domestic industry in FY25. Plus, operating costs remain elevated due to higher sea freight costs. According to analysts at Emkay Global, it is likely that companies in the segment may choose to increase prices, but there could be a lot of planning and caution before any price hike is announced. Against this backdrop, the earnings performance of companies, including Century Plyboards, Greenlam Industries, and Greenpanel Industries, should be tracked
