In recent months, the price of high-end mahogany raw materials—such as Siamese rosewood and lobular rosewood—has dropped sharply in the domestic market, with an average decline of 30% to 40%. This has started to squeeze profit margins for mahogany furniture, especially in terminal retail stores that have been slower to adjust. Recently, a well-known mahogany furniture store in Dongguan even advertised a "0 profit" promotion, signaling a shift in the market.
Industry experts note that while some premium varieties have seen significant price drops, common types of mahogany have remained relatively stable. Therefore, it’s advisable to approach the purchase of mahogany furniture with caution, avoiding blind chasing of high-end brands.
The price of precious wood has now fallen back to levels seen at the start of last year. According to Ning Xiaofeng, general manager of the Dongcheng United University Redwood Art Center, since May, the prices of red rosewood and Burmese rosewood in the Dongguan market have both dropped by over 20%.
A long-time mahogany trader from Dongguan, who has operated along the Yunnan border, reported that the most dramatic drop came from Siamese rosewood from Laos and Cambodia. Top-grade Siamese rosewood fell from over 400,000 yuan per ton at the beginning of the year to between 250,000 and 280,000 yuan per ton. Similarly, lobular rosewood has also dropped by about 30% to 40%, returning to the price level seen in early 2013.
“Most expensive mahogany varieties have fallen significantly because speculation was too intense over the past two years,†said Mr. Yao, a supplier in the industry. “With the current economic climate not being favorable, many speculators are eager to cash out.†He added that there is currently enough stock of mahogany materials, and large manufacturers have sufficient inventory. As a result, the price of premium redwood raw materials is unlikely to rise in the short term.
Mr. Yao emphasized that the major price drops have occurred mainly in high-value species like Siamese rosewood and lobular rosewood, while ordinary rosewood has only experienced minor declines.
Redwood furniture profits have also shrunk by 5% to 8%. Ning Xiaofeng explained that raw material price fluctuations typically take three to four months to reach the end market. This round of price drops has gradually affected the sales of finished mahogany products. “Our profit margin has decreased by 5 to 8 percentage points,†he said.
Ms. Xiao, head of sales at the new Chinese-style mahogany brand Yangtang, which recently entered the private sector, said that entering a downturn in the mahogany market means reducing prices and profit margins is a smart move. She noted that choosing a private company model focuses on value and minimal profit, with a warehouse-style management approach. Since Yangtang primarily uses Burmese rosewood, which has seen a drop of over 20%, the company launched a 7.8% discount on its entire product line and some categories with a “0 profit†promotion on August 22 to stimulate demand among middle- and high-end consumers.
Mr. Yao, a raw material supplier, analyzed that the price of raw mahogany should at least double once made into furniture. However, most of the finished mahogany furniture currently sold in stores still reflects the pre-price-drop material costs, meaning the final furniture prices won’t fall much. That said, ordinary mahogany furniture may need to be priced lower to adapt to the current market conditions, especially in the context of declining prices of famous redwoods like Siamese rosewood.
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