Massive flooding in Malaysia and Indonesia, the world's top exporters of tropical timber, has forced timber prices up sharply, according to a new industry report.

"The incessant rainfall and widespread flooding drove prices for Malaysian timber products sharply up," the International Tropical Timber Organisation said in its latest newsletter.

"With minimal raw material trickling in, stockists of sawnwood and plywood are marking up prices by as much as 25 percent to 30 percent," it said.

Seventeen people have been killed since unseasonably heavy rain started in December, severely affecting several areas including the southern Malaysian state of Johor, a main player in the furniture industry.

The group said neighbouring Pahang state, a major source of raw logs and sawn timber, had also been seriously affected by heavy rainfall and flooding.

"Assessment of damages to the Malaysian timber industry is ongoing and may not be known for three months," it added.

Peter Chin, minister of plantation industries and commodities, told AFP that a construction boom in the Middle East was also helping to boost timber prices.

Neighbouring timber producing giant Indonesia was also not spared, the group said.

"Export prices of timber products, especially plywood, rose sharply amidst thunderstorms and law enforcement efforts to curb illegally-harvested timber from reaching the various ports around the country," it said.

"Armed, uniform military personnel were stopping trucks for spot-checks on several highways leading to the major ports."

The timber group said that Indonesia and the European Union have agreed to begin talks to curb the sale of illegal timber products to Europe.

Indonesia has also proposed a commercial logging moratorium in the country's critically degraded forests following the widespread flooding, which was blamed on illegal logging.

The moratorium would last from six months to a year and apply to anyone felling trees for non-personal use in protected areas.