Teak demand springs a leak

There is no doubt teak has been the pre-eminent wood for high-end marine applications and outdoor furniture for decades. The wood is also prevalent in fine furniture, prized not only for its appearance, but also for its tight growth rings, density, durability and water resistance.

The world’s finest old-growth teak has always come from Burma, now known as Myanmar. Because of the country’s repressive military regime and practice of human rights violations, the United States imposed sanctions in 2003 on all exports from Burma. Therefore, Burmese teak that enters this country comes through Europe and is graded as FEQ (First European Quality) Burmese teak. It is illegal for U.S. wood dealers to directly import Burmese teak from Myanmar. However, Burmese teak can still be obtained from Thailand and other areas in Southeast Asia.

“Most of the teak coming out is from Thailand and most of that crosses illegally from Burma,” says Rick Hearne, owner of Hearne Hardwoods in Oxford, Pa. “There is a little that is truly coming out of Thailand, enough to keep the situation cloudy, and also Laos and Cambodia. Actually, talking to a couple of the big suppliers, it’s a pretty dead commodity at the moment because most of it goes into the boating industry and all but the highest-priced boats are dead in the water right now.”

“The demand for genuine teak has softened somewhat in the last six months as the demand for pleasure boats, sailboats and yachts has slowed, as well as a large number of high-end homes, hotels and resorts that have been out on hold due to the state of the economy,” says Wayne Rogers of East Teak Fine Hardwoods of Donalds, S.C., North America’s largest teak importer. “While the price of certain sizes of teak has come down a little due to the demand, the cost of logs to the sawmills has remained steady. I don’t see any price increases in the near future.”

As the supply of old-growth teak has dwindled, the acceptance of plantation teak from Latin America and Indonesia has slowly grown. Although not as dense as Burmese teak, a market for plantation teak has emerged, primarily for use in outdoor furniture and interior trim.

“Everything that I have read says the density of plantation teak is about the same as regular teak; everything is the same except for the growth rings,” says Steve Brunner, owner of Tropical American Tree Farms, growers of plantation teak and other tree species in Costa Rica since 1992. “Any of us who know wood can tell immediately if it is old growth or plantation, but the market seems to accept plantation teak.

“We’ve sold some 13-year-old first log wood to a good quality U.S. manufacturer [for outdoor furniture] and, except for dimensions, it easily would have qualified for FEQ. But there’s still a portion of the wood, even in the 13-year-old, that I wouldn’t be excited about selling for outdoor use … I’m a very strong advocate of young teak for indoor. We see a lot of market of the younger teak on interior decorative panels.”

Teak (Tectona grandis) is also known as Rangoon teak, India teak and Asian teak. Teak trees are very fast growing and can reach heights of 150’ with trunks up to 5’ in diameter. The wood is golden to dark brown with occasional darker streaks and turns a silver-gray when it oxidizes. Teak is usually straight-grained and tends to be oily, which contributes to its durability and resistance to moisture. Teak has a specific gravity of .65 and has fair working properties. Because it is so abrasive, sharp cutting edges are necessary to prevent severe blunting.

“The problem is high-quality teak logs are hard to buy, ones that you can actually get long and wide boards out of,” Hearne says. “That is why the pricing is so difficult. We are paying more for logs right now than what we were paying for kiln-dried lumber two years ago. We do have some that are in the 20" to 30" [wide] range, 15', 16' long. We bought our logs through Europe and it was certified by the World Bank as being clean. A lot of these projects are funded by the World Bank and, if they’re funded by the World Bank, they have to have the paperwork in order.”

East Teak imports and maintains a large inventory of 100 percent FSC-certified teak lumber. “This is true Asian teak that is recycled from old buildings that are at least 75 to 100 years old,” Rogers says.

With the market for plantation teak growing, Brunner says he has his hands full.

“We’re going to plant this year and then probably hold off for another five to eight years and just focus on marketing wood,” Brunner notes. “We have about 50 million board feet that are coming out of the farms between now and 2020 … At the end of last year, we had about 2.3 million trees and I’d love to keep planting, but then I look at our responsibility in the next few years and I just can’t.”

Retail prices for 4/4 FEQ Burmese teak range from $29.50 to $34/bf. The price of 4/4 plantation teak is priced between $9.50 and $12/bf.

This article originally appeared in the May 2009 issue.