Manufacturing and construction has remained quiet in India until late November due to the Diwali festival. Economists suggest this may be the most important Diwali festival in over 10 years.
Consumption makes up 60% of the GDP in India, and an economic revival in India requires an increase in consumer spending which usually occurs in the festive season. The Diwali season usually accounts for 25-40% of all domestic sales of consumer durables.
Log supply will likely increase as log volume from Queensland that would have been sold in China has been diverted to Kandla in break bulk and Tuticorin in containers.
This is additional to the regular two-three vessels from Uruguay and two vessels from New Zealand per month. Some volume from Uruguay may be sent to China if China log prices continue to lift faster than Indian prices.
Kandla lumber prices are steady at INR 471 levels. Log and lumber demand are forecast to increase after the Diwali period.
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