Basra woodworking prices surge due to dollar fluctuations, geopolitical tensions

BASRA — The price of wood in Basra has surged, with some types increasing by 50,000 dinars (around $32) per meter due to the rising U.S. dollar exchange rate, attributed to the ongoing crisis in Lebanon and geopolitical tensions following Iran’s missile attack on Oct. 1. Local traders say the fluctuation in currency is significantly affecting the Iraqi economy, especially markets dependent on imports.

Much of Iraq’s market relies on foreign goods, particularly from Turkey and China, where transactions are made in U.S. dollars. This reliance makes industries vulnerable to exchange rate changes, driving up prices across multiple sectors.

Carpenters in Khor al-Zubair, Basra governorate, report a growing demand for imported wood as Iraqi-sourced wood has fallen out of favor. Imported varieties like teak and beech wood from China and Turkey are preferred by customers.

“The cost of wood depends on the dollar exchange rate, and right now, it’s spiking,” said Ali Jassim Yaqoub, owner of a carpentry shop in Khor al-Zubair. “We use imported wood because that’s what customers want. Turkish, Chinese, and Iranian woods are particularly popular, as well as varieties from Malaysia and Africa.”

Iraq’s currency market has struggled, with a wide gap between the official exchange rate of 1,300 dinars per U.S. dollar, set by the Central Bank of Iraq, and the parallel market rate, which has risen to 1,520 dinars per dollar. This disparity is driven by U.S. Treasury sanctions over corruption and transparency issues in Iraq’s banking system.

In 2023, Iraq imported goods worth approximately $95.52 billion, underscoring its dependence on foreign imports.

Yaqoub added that Turkish MDF and HDF woods are currently in the highest demand because of their durability and strength. “Regular Javanese wood costs around 250,000 dinars (about $164) per square meter, while royal-grade wood ranges from 350,000 to 550,000 dinars ($230 to $361),” he explained. Prices for custom-made bedroom sets range from 2.5 million to 5 million dinars ($1,644 to $3,288), depending on design and size.

Yaqoub also owns a carpentry shop in the Hamdan Industrial Area, where demand is higher due to more modern machinery. “The shop in Hamdan uses advanced Turkish machines that can cut wood up to three meters long and 80 centimeters wide,” he said, noting that the older Iranian-made machinery in Khor al-Zubair affects production there.

The workshop works with a variety of imported woods, including Malaysian and African Javanese wood, Chinese teak, and beech wood, which are commonly used for furniture like bedrooms, doors, kitchens, TV stands, and home décor such as staircases.

Despite the price increases, Yaqoub is optimistic: “The market is volatile. Prices are high now, but they might drop again when conditions stabilize.”