Why the price of Furniture in China increased in 2021?

For two years, the furniture industry in China and worldwide has seen a massive jump in prices. In 2019, there was a slight 2.3% increase. However, between 2019 and now, we have seen a more significant price increase. In this article, we will explore some of the factors responsible for this massive jump in price.

The Chinese Furniture Market

The term furniture is a broad term that brings together a lot of household items tables, tabletops, desks, beds, chairs, storage cabinets, sofas, and other things usually placed in a home or other buildings for comfort and sometimes aesthetics. China remains one of the nations with the largest furniture industries in the world. A majority of this demand comes from the fact that the country has the highest population globally.

In the past few years, multi-purpose and intelligent pieces of Furniture have grown in popularity to meet the rising demand in the local furniture market demand in terms of aesthetics and functionality.

Asides from meeting the demand of the local market, the Chinese furniture industry serves the world’s need for Furniture. This makes China a world-leading producer, exporter, and consumer of Furniture at the same time with an estimated CAGR of 7%. About 40% of the world’s furniture production comes from China alone.

As of 2018, the export value of Chinese Furniture was about USD 53.69 billion, according to data from the General Administration of Customs of China. These Chinese furniture exports serve major countries, including the United States, Hong Kong, Japan, Vietnam, and the European Union.

While the industry continues to thrive, there has been a sudden surge in prices connected to the global covid 19 crisis of 2020. The following are some reasons that explain the sudden price changes.  

1. Exchange rate

One of the main reasons why Chinese Furniture is highly demanded worldwide is because they are affordable. That is not coincidental because China’s Yuan has less value compared with other currencies of the world. That means that people living in other countries with higher value currencies will find Chinese Furniture cheaper.

In 2020, there was a sudden rise in the value of the Yaun that went on until October. This massive rise in value led to an enormous increase in price.

In 2021, there was also a similar rise in value. Although the increase was not as much as in 2021, it was still significant as it led to a slight increase in the price of Furniture both domestically and on international markets.  

2. Raw material

A significant challenge that has been causing a rise in the price of Chinese Furniture is the scarcity of raw materials. Since the middle of 2020, there has been a sharp increase in the cost of bulk raw materials. As a result of the short supply and the high demand for these products, manufacturers have had to deal with severe price fluctuations.   

2.1 Wood

Even though China is one of the world-leading producers of Furniture, most of the wood it uses for production is imported from abroad. This means that changes in the international market will significantly impact the prices of Chinese Furniture.

Since the corona epidemic happened, the price of wood worldwide has increased by 188%, especially in places like South America, North America, Africa, Russia wood, etc.  

As the epidemic situation grew out of control, most import activities had to reduce or stopped outrightly. As a result, no containers or vessels were bringing importing wood for months. This led to a shortage of raw materials here in China, which gradually led to a gradual increase in the price of Furniture. For example, in a typical month, China imports thousands of containers carrying the Africa rosewood. However, from last year till this year, the country only imports between 1 hundred to 2 hundred containers per month. The short supply means the wood becomes a priced commodity.

2.2. Iron

Iron is one of those materials with a comprehensive use case in many industries, not just the furniture industry. Unfortunately, due to the Covid-19 pandemic, many manufacturers had to shut down their production lines, reducing the quantity of iron available. With such a huge demand for iron in many other industries, the pressure created a shortage. Together, the pressure and shortage gradually increased the value of iron.    

2.3. Brass

Like iron, brass is a widely used material in many manufacturing industries. Due to the drop in production of brass both locally and abroad, there was a shortage in the supply of brass. As a result, there was an increase in the price of Brass-made Furniture in China.

3. Government policy (electricity control)

In a bid to reduce China’s greenhouse gas emissions, the government created a dual control policy. This policy requires that provinces in China cut their power consumption. To ensure compliance, there has been widespread power rationing across China. This has led to a decrease in the total economic output in China, not only in the furniture industry. This reduction in production output means buyers have to compete to buy the few available items at a higher price.      

How to control the price of the Furniture?

A lot of things go into the production of Furniture. Therefore, it is difficult to tell if the price of Furniture will drop in the future. However, the following are some tips to help you get affordable Furniture despite the price hike.

  1. Choose the low season to place an order.

In China, the National day and Spring festival are the two biggest holidays. Most of the significant events in China will be held around these two holidays, which are in October and January. At these periods, there will likely be high demand for Furniture, which will lead to high prices. So, if you want reasonable prices, you should place your order during the low production season, which is usually from February to July.

  • Simple the designs

Although aesthetically pleasing, Furniture with complex designs usually commands higher prices. This is because the cutting and design process usually takes a longer time. More so, intricate designs require more labor. Therefore, if you want to beat the hike in the price of Furniture, consider going for simple techniques.   

  • Accept a little longer delivery time.

Thanks to the pandemic, shipping speed has reduced, especially between China and the US. The delivery time now takes double the time of what it used to be. Although a few manufacturers might give you fast delivery in China, it might be a little too pricey. So if you want affordable Furniture, you might want to go with a longer delivery time.  

Peng Jiao

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