IT was a temporary relief for plywood exporters when South Korea decided to defer its anti-dumping duties on the products early this month thus reversing its earlier decision to slap punitive duties ranging from 5.11% to 33.81% on local plywood imports in July.

The republic’s Ministry of Finance and Strategy said a formal ruling would only be made within the next five months pending further investigations by the South Korean Trade Commission (KTC).

To recap, nine local plywood suppliers – eight from Sarawak and one from Peninsular Malaysia – have been alleged for dumping their products by the Korean Wood Panel Association (KWPA) in March. This, in fact, was the first dumping allegations faced by local plywood exporters.

The KWPA filed a petition to the KTC claiming that local plywood exporters had sold their products below the production cost and hurt many South Korean plywood manufacturers which in turn suffered damages in terms of profits, sales and market share.

As at 2009, the plywood market in the republic stood at 700 billion won (US$584.4mil) mainly used in the construction sites as casts or moulds for cement.

The issue can also be considered serious as the KTC intends to follow up with the World Trade Organisation on anti-dumping procedures.

Given such strong accusation, one may wonder who is actually on the right side?

Has the KWPA been correct on its scope of Malaysia’s merchanised product or is it true that Malaysian plywood exporters have been dumping their products in the republic?

Sarawak plywood industry players, also the country’s largest producer, had cried foul over the KWPA allegations. Both Sarawak Timber Association and Sarawak Timber Industry Development Corp had jointly refuted the accusations.

While the local plywood exporters accused for the wrongdoing had cooperated with KTC by providing pertinent information and data during the first round of investigation in April in which many said, had resulted in the postponement of the anti-dumping duties.

However, some quarters are now concerned over the new investigations undertaken by KTC on the issue.

Should the allegation is proven, there could be a likelihood of South Korea banning its entire import of local plywood.

In 2009, Sarawak’s export of plywood to South Korea was slightly over 530,000 cu m with a value of about RM570mil. The state has about 34 plywood panel products manufacturing companies.

It is learnt that South Korea is currently the second largest plywood market for Sarawak after Japan.

Another potential threat could be Sarawak’s plywood exports to Japan, its biggest overseas buyer.

Should the problem with South Korea was not amicably resolved, Japan might take its cue and refuse to buy local plywood, according to sources.

While local plywood exporters might still be spared from South Korea’s anti-dumping duties, however, they need to remain alert and fully prepared should KTC come knocking at their doors for further dumping probes.

?    Deputy news editor Hanim Adnan thinks that local plywood manufacturers and exporters must remain united and have enough ammunition to prove to KTC that they are clean.