Rosy times ahead for rosewood furniture
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A yellow rosewood chair at a recent furniture fair in Beijing. More than 2 billion yuan ($3 billion) in hot money flooded into Vietnam from China to buy yellow rosewood goods last year. [China Daily] |
Guo Haibing, a rosewood furniture seller in Beijing, said he felt satisfied about his income this year at a friend's get-together because the market for his goods started to warm up in 2010.
"I made more money than the previous year," said Guo. "At least the market is better than it has been for the past two years. Both the price of rosewood furniture and the number of buyers grew steadily in 2010."
Industry insiders agreed the market was improving after turbulent times.
According to Guo, a set of sofa and chairs made of rosewood can cost anything between 150,000 yuan ($22,727) and 2 million yuan. The price of different rosewood furniture depends on other raw materials used and the skill of the carpenter.
There are several types of rosewood: yellow (huanghuali), the rare zitan and red (hongsuanzhi). The price also differs according to source and rarity.
Currently, huanghuali, a rare species of rosewood from Vietnam, is 700,000 yuan a ton in the Chinese market and hongsuanzhi is 65,000 yuan a ton. A set of sofa, chairs and a wardrobe made of hongsuanzhi is 500,000 yuan in Huayi Furnishing Co, a furniture company based in Beijing that has been producing and selling rosewood furniture for 17 years.
Rosewood furniture is not to everyone's taste but if someone likes it, he or she would probably want to decorate the home in the same style. As a result the cost can be prohibitive for a salary earner.
The price of rosewood furniture used to be even higher in 2007 after year-on-year growth of 20 percent before 2005. At that time, the rosewood market was a playground for investors rather than a regulated market for collectors or homeowners who admire it.
After 2005, the price of all kinds of rosewood began to soar at a surprising speed. One type - red sanders - increased up to 750,000 yuan a ton from 150,000 yuan and huanghuali rose to 1.2 million a ton from 200,000 yuan over the space of just two years.
A representative of a trade company specializing in rosewood in Jiangsu province in East China said a 15 percent to 25 percent year-on-year growth in the price of rosewood is normal but the sixfold increase was extraordinary.
"Too much hot money rushed into the market when investors could not find other places for their money in 2007," said the head of a wood trading company based in Fujian province who declined to be named.
The market shrank fast when the bubble burst and, with the financial crisis of 2008, not only many furniture sellers but also the factories were bankrupted.
Guo said he made more than 150,000 yuan a year in 2007,which is pretty high for a salesman in a rosewood furniture factory. However, afterward he suffered two poor years. Now he has regained his confidence in the market.
Analysts said many investors speculated heavily in the rosewood market in 2007. Now, the prices of some certain types of rosewood are no less than they were in 2007, but they are mostly bought by regular buyers and collectors rather than by speculators.
Yang Bo, general manager of Yuanhengli Rosewood Co, said the market is back in a healthy condition. He said the number of companies dealing with rosewood furniture increased 30 to 40 percent last year - a good sign.
Zhang Yue, a 55-year-old woman from Beijing, is planning to buy a set of rosewood furniture in the coming new year for good luck. She said the highest price she could afford is 500,000 yuan for the whole set.
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