Government’s new pricing policy slumped the profit margin of saw millers in Bhutan. The saw millers have to buy timber from auction which is held once a month. The main problem is, while bidding for the timbers, the millers fail to compete with big time contractors and individuals who bids at higher price. The millers have to buy timber at a higher price but they sale at a price fixed by the government. Besides, they also include loading and transport charges into the timber coast.
After the new pricing policy has been implemented, the number of millers attending the auction declined and the country is facing timber shortage. Kuensel online reports:
Pema Phuntsho, who runs a sawmill in Pam, said that differences arose when they bid with contractors and private parties, who took logs for personal use, whereas theirs was solely for business to sell to consumers.
“There’s no fixed rate while bidding but when we sell it, we sell within the ceiling fixed by government,” he said, adding that the rush for logs sent bidding very high.
While the ceiling rate for different grades of timbers varied, he said he used to sell mixed hardwood timber for Nu 350 per cft earlier. Now the ceiling did not allow him to charge above Nu 209.29 per cft.
Even before the new pricing policy was implemented, the saw millers objected about it but there was no response from government’s side. Bhutan’s chief forestry officer, K.B. Samal also admitted that some of the concerns of the millers were genuine. He said that before the price was set, the millers used to make easy money which was not good for the government and people. He said that a task force was created comprising of experts in various fields that conducted in-depth research and then set the new price. He said that initially there may be some problems but the millers have to abide by the new policy. Things will definitely change in future.
Related article:
Kuensel online
Comment Preview