The price of precious wood species has fallen significantly in recent months. Since May last year, the cost of rosewood raw materials has dropped, with both Siamese and Burmese rosewood seeing declines of over 20%. Mr. Liu, a store manager at a major redwood brand in Zhengzhou, noted that high-end mahogany raw materials like Siamese and lobular rosewood have experienced sharp price drops, averaging between 30% to 40%. As a result, the profit margins for mahogany furniture in retail stores have started to shrink. To boost sales, some stores launched a “0 profit†promotion during the Spring Festival, but the results were underwhelming. Many consumers are now expecting further price reductions.
The most significant drop has been seen in Siamese rosewood from Laos and Cambodia, where top-grade material has fallen from over 400,000 yuan per ton to around 250,000 to 280,000 yuan per ton. Similarly, lobular rosewood has also dropped by 30% to 40%, returning to levels seen at the start of 2013. According to Mr. Liu, this decline is partly due to excessive speculation in the previous two years, with many investors eager to sell off their stocks. He added that current domestic stockpiles of mahogany are sufficient, and manufacturers still hold significant inventory, which means only a small portion of the material is used for finished furniture production. As a result, prices of premium redwood are unlikely to rebound in the short term.
A rosewood supplier revealed that in recent years, the price of red rosewood reached as high as 1,000 yuan per kilogram, leading many manufacturers to store large quantities without using them for production. With tighter access to capital, the market has seen an oversupply of raw materials, forcing many traders to sell at lower prices. This has created a shift in the industry, with some retailers adjusting their strategies to remain competitive.
Market analysts suggest that the domestic mahogany market has entered a digestion phase. The first half of 2014 saw a surge in rosewood imports, indicating strong demand. However, with increased investment and rising material costs, the industry has become more volatile. Price fluctuations typically take three to four months to reach the retail level, and the current drop is now being reflected in finished product sales. Mr. Liu noted that profit margins have shrunk by 5 to 8 percentage points, prompting some businesses to reduce prices in hopes of stimulating demand.
While the price of raw materials has fallen, the final furniture price usually doubles the cost of the wood. Therefore, most mahogany furniture currently on the market still reflects pre-price-drop costs, meaning that finished products won’t see significant reductions. However, furniture made from less expensive wood species is now being priced more competitively to match market conditions. This adjustment helps bring the industry back to a more rational pricing model.
With the rise in anti-corruption efforts, luxury consumption in China has declined, affecting the high-end mahogany market. Sales of premium materials like Siamese and lobular rosewood have suffered, while more affordable options such as Burmese rosewood have gained popularity. In the future, low-cost or mid-range mahogany furniture is expected to dominate the market, appealing to a broader consumer base.
As purchasing power among ordinary consumers grows, more families are spending over 100,000 yuan on furniture. Some mahogany dealers are now targeting this group, offering smaller, more affordable pieces. A set of mahogany sofas can cost around 20,000 yuan, while a set of chairs might be nearly 10,000 yuan. In many solid wood furniture stores, sales staff often label these items as “redwood,†though they are not as expensive as traditional rosewood or yellow pear.
Mr. Liu pointed out that compared to leather sofas, which can cost 20,000 yuan or more, certain types of mahogany furniture—like hedgehog rosewood or chicken wing wood—can be purchased for 30,000 to 40,000 yuan, with room for negotiation. Many consumers are choosing these options for their durability and value retention. As the range of redwood species expands, consumers are making more informed choices and gaining stronger bargaining power.
Industry experts believe that the current trend of falling prices will continue for some time. Although Burmese rosewood has seen a sharp decline, the market remains active, and the downward trend is expected to persist. While some merchants highlight the scarcity of redwood, suggesting it will only grow more valuable, others caution against overestimating its long-term potential. The reality is that supply chains are still functional, with countries like Myanmar and Vietnam continuing to export processed timber and semi-finished goods.
Both consumers and businesses should approach the investment value of mahogany with a realistic perspective. The domestic market faces challenges such as limited distribution channels and high brand premiums. While some may view mahogany as a resource to be preserved, the risk of overvaluation is real. Given the policies of origin countries, it’s unlikely that all mahogany imports will be banned in the future. Therefore, treating mahogany solely as a scarce resource could lead to unnecessary risks.
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