CAIRO - The Nile Delta town of Damietta has been in the doldrums due to unprecedented higher costs in its main industry – furniture. It is a well-established Egyptian industry that employs 90 per cent of the labour force in Damietta. "Spiraling timbre prices are a major threat to our business. Importers have increased prices without any good reasons. Wholesalers and manufacturers are feeling the pinch," said Emad Hamdy, a Damietta-based timbre trader. "Prices have doubled over the past months. Importers say world prices and the dollar have risen. The result is a slump for Damietta factories and workshops," Hamdy said. Prices of whitewood and beech have jumped to LE2,000 and LE3,200 respectively, according to Hamdy. In 2010, Egypt's furniture exports totalled $260 million. Two years earlier, the country's furniture exports hit LE1.7 billion ($285 million), according to the Ministry of Industry. There are 45,000 furniture factories and workshops in Damietta, according to the State-run Central Agency for Public Mobilisation and Statistics (CAPMAS). Higher timbre costs may force half of these production units to shut down, analysts say. As production rates have already fallen by 50 per cent due to sector protests after the January 25 revolution, any further blow would add insult to injury in Damietta. Unemployment in Egypt rose from nine per cent of the labour force in 2010 to eleven per cent this year, according CAPMAS. But unofficial reports estimated unemployment before the January 25 revolution at around 20 per cent. Ismail Lashin, another timbre trader, attributes the rise in wood prices to a decline in Russian exports. "Producing countries like Russia and Romania have reduced their exports. This is the reason why wood prices have shot up," Lashin said, calling for opening new markets for log imports. Russia, the world's largest lumber exporter, increased log shipments in the first quarter of 2011 after a four-year decline, according to Wood Resource Quarterly. Russian exports of softwood have "gone up substantially", especially to China, Uzbekistan, Japan and Egypt. China is the largest market for Russian logs, followed by Uzbekistan, Japan and Egypt. But industry experts say "cherchez China". "China has increased its furniture exports to Egypt, putting the local manufacturers in a very tight corner," said Mohamed el-Shabrawy, head of the Timbre Chamber at the Federation of Egyptian Industries. "Chinese furniture is not made of natural wood but of MDF, which does not last long," el-Shabrawy noted. According to him, MDF, or Medium-Density Fiberboard, is made of separated fibers. "MDF is not a good, long-lasting material for furniture," he said. "Parquet floor pieces made of natural wood can easily be sanded and polished, while MDF needs to be replaced if frayed," he explained. Last year, Egypt imported furniture worth $170 million, mostly from China, according to official data. In 2010, China exported wooden furniture worth $16.2 billion, jumping by 34 per cent in value compared to 2009. But as they say every cloud has a silver lining. Local consumers and furniture traders believe that cheap Chinese products have a future in this country. "They are cheap and nice. People want low-cost products that suit their budgets when they furnish their houses," said Khaled Badran, a furniture storeowner in Manasra, central Cairo. "They are of a lower quality compared to Damietta furniture. But many people want to pay less," Badran added.
