2. GHANA

  Takoradi Port development to benefit exporters
The port at Takoradi was the first to be built in Ghana and is now the second largest in the country. The port has handled Ghana＊s traditional exports such as timber and wood products for decades.

The volume of traffic through Takoradi Port has grown in recent years as much of the oil drilling and exploration equipment comes into the port and there has been an expansion of outgoing shipments such that the port has become increasingly congested.

To address the problem of congestion at the port the Ghana Ports and Harbours Authority (GPHA) has entered into an agreement with the China Harbour Engineering Company (CHEC) for work on a first phase of an US$150mil. Takoradi Port Infrastructure Development Project.

Currently, Takoradi Port has seven berths 每 four multipurpose and one each specifically for manganese, bauxite and oil. Draughts range from 9 to 10 metres. The port has a covered storage area of 140,000 square metres, 250,000 square metres of open storage space and container-holding capacity of 5,000 TEUs (twenty-foot equivalent unit).

Takoradi Port handled 53,041 TEUs in 2010, up 9% from 47,828 TEUs in 2009. In-coming container traffic amounted to 24,127 TEUs and outgoing traffic amounted to 28,914 TEUs.

Vessel movements jumped 33.6% to 1,277 in 2010 from 956 the previous year. Vessel turnaround time in 2010 averaged 2.1 days, down from 3.3 days in 2006.

Total cargo traffic rose 19% to 4.01m tons in 2010, up from 3.37m tons in 2009. Imports totalled 1.72m tons and exports 2.29m tons in 2010 up from 1.26m tons and 2.11m tons respectively in 2009.

The first phase of the port infrastructure development project has already started with the demolition of old structures; dredging of existing berths; construction and extension of breakwaters; building of new berths for bulk cargo such as bauxite, manganese, clinker, etc; building of oil terminals and improvement of access to the port.

When the work is completed the port will be able to handle more traffic and larger vessels. In addition, vessel turnaround time should be reduced leading to lower shipping costs a bonus when shipping traditional commodity products from the port.

President outlines plan to expand manufacturing
In the national address to parliament, the President, John Mahama, provided assurances that the government will marshal the collective energy of all stakeholders to facilitate the emergence and growth of a strong manufacturing sector.

The President mentioned some key areas that need to be addressed to achieve this goal namely; a review of current tax structure for manufactures to improve competitiveness, establishment of an industrial development fund to support ailing and struggling manufacturing industries and to provide fully serviced industrial plots, especially in the regional capitals.

Fuel prices to go up
The government has announced that prices must be raised by 15 每 20% on all petroleum products because of the soaring price of crude oil on world markets and the cedi/US dollar exchange rate developments in recent months.

Many analysts believe the increase in fuel prices will have a negative knock-on effect on prices of all goods and services. Fuel costs are significant elements in wood production costs and the increase in fuel costs could negatively impact the sector.

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3. MALAYSIA  

  Inflation is in check and 2013 prospects appear good
The Malaysian economy grew by 5.6% in 2012 compared to 5.1% in 2011 according to a recent report from the Central Bank. Growth in the last quarter of 2012 was 6.4% and there was an increase of 1.3% in the consumer price index.

Private sector investments grew by 20.2% while public investment went up by 11.1% in the last quarter. The Central Bank report said that investments were robust and were the main drivers of growth in the last quarter.

Growth in the construction sector continued to be strong, pushed up by civil engineering and building in the residential sector. A sustained growth in the domestic economy is expected to support positive growth in 2013, despite expected weak economic growth in the advanced economies.

Domestic demand has been stimulated by some expansionary government policies which are slowly being wound down. Malaysia was one of the few S. E. Asian economies to achieve a substantial expansion of exports during the final quarter of 2012.

Despite low log stocks prices remain flat
The timber industry in Malaysia is slowly getting back to business after the long Chinese New Year holiday but trading remains quiet at the moment. Log stocks are reported low at present, the combined result of the rainy season and the long industry shut-down for the New Year festival.

Some plywood factories are complaining that the flow of logs is inadequate for production and this is resulting in some upward pressure on log prices. Analysts report that these pressures will grow if market demand picks up however, at the moment trade is too thin for there to be any major shift in prices.

The Chinese market is still quiet as the industries there slowly get back into production after the holiday period while Indian buyers are only in the market to meet immediate demand.

Markets in Asian ＆growth engines＊ waiting for some good news from EU and US
Analysts anticipated an improvement in timber prices as log stocks fell due to the disruption to logging activities but there has been little change.

Lingui Development Bhd, a major timber company in Malaysia was quoted by the Malaysian Star newspaper saying ※demand for plywood and veneer from Japan in the fourth quarter of last year was generally lackluster, partly due to the weakened yen§.

Timber exporters such as Lingui have been severely impacted by the considerable slowdown in demand from Asia＊s ＆growth engines＊, China and India. All eyes are on Europe and USA to deliver a prosperous year of the snake.
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4. INDONESIA

  Indonesia＊s timber legality assurance system promoted to UK trade
The Ministry of Forestry and the Indonesian Embassy in the UK recently held an event to promote Indonesia＊s timber legality assurance system (SVLK). The event, billed as an ＆Interactive Market Dialogue on Indonesia＊s timber legality assurance system (SVLK), was held in London and attracted over 60 timber importers. These importers praised Indonesia for taking the initiative to provide information on the readiness of Indonesian exporters for the EUTR.

This multi-sector dialogue was the first conducted in UK after it became mandatory for timber companies in Indonesia to comply with the Indonesian legislation on timber legality verification.

The meeting in London focused on presenting Indonesia＊s SVLK in the framework of the Indonesian and UK trade and involved private enterprises and NGO＊s.

Imports have confidence in Indonesian V-legal license
A mission from Indonesia led by Agus Sarsito visited the EU to provide first hand information to the EU trade on progress in the implementation of the VPA between Indonesia and EU.

Importers in the UK and Belgium confirmed that Indonesia＊s timber shipped with the V-Legal license is recognised as meeting the EUTR.

The head of the mission said he was sure that EU importers will have complete confidence in the Indonesian timber legality assurance system. Indonesia is now shipping wood products with a V-legal license and up until February 19 some 8,000 licenses have been issued.

Group certification allows legality audit costs to be shared
A number of exporters in Bali have secured SVLK Certification confirming the legality of their wood products and so assuring their customers that the wood used has been legally sourced.

Six companies in Bali took the initiative to establish a cooperative, Koperasi Bersama Indonesia (KBI) to facilitate cost sharing for the process of securing the V-Legal certificate.

The companies that are now certified are PT. Putri Ayu, PT. Mitra Bali Fair Trade, PT. Kriya Jaya International, CV. Maharani, UD. Margono and UD Bali Shine Wood.

The Indonesian legislation provides for small enterprises to form a group such as KBI to share the cost of certification. A Lead Auditor at one of Indonesia＊s independent certification companies said the cost of securing SVLK certification could be from US$2500 to US$5000 depending on the complexity of the operation.

The V-Legal certificate is now mandatory for exporters and there have been cases in Surabya where shipments have been stopped because the appropriate V-Legal license was not obtained by the exporter.
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5. MYANMAR

  Teak dealers scramble to stock up on teak logs
The Myanma Timber Enterprise open tender sales were held on 22 and 25 February and the following average prices were recorded.

Prices are quoted in euro per ton, hoppus measure.
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Traders are reporting that the current market for teak logs is very firm. The prospect of a complete log export ban is driving dealers to increase their stocks of teak logs.

Average prices at the most recent auction were firm despite some inconsistent grading which was of concern to buyers. Some buyers said that reasonably good log parcels were made available for the sealed bid part of the February sale.

In contrast to the better than expected price levels for logs for export, average prices for logs for use by local millers were much lower however, the grades that were purchased by the domestic mills were also lower than those purchased by exporters.

Fresh Gurjan logs, especially those suitable for veneer, were in strong demand. Analysts say that buyers have started to take the prospect of the log export ban seriously judging from the trend in demand and price levels. Buyers of Gurjan prefer fresh logs as they are mainly used for veneer.

Timber legality workshop
The Minister for Environmental Affairs and Forestry (MOECAF) recently opened a workshop on ＆Timber Legality Assurance Systems＊ (TLAS) and his address was reported in the state owned vernacular daily newspaper the ＆Mirror Daily＊.

The minister highlighted the need for Myanmar to implement a TLAS to ensure Myanmar exporters can secure access to the EU market. He stated that Myanmar has had many years of experience in harvesting timber and downstream processing in accordance with national forest laws and regulations.

In December 2012, the Myanmar Certification Scheme was introduced and he mentioned that formation of a timber certification committee has been proposed. He mentioned the need to establish independent auditing agencies to certify that harvesting, logging and transportation is in accordance with the laws and is conducted in an open and transparent manner.

Recently an EU delegation visited the MOECAF and discussed the EU Timber Regulation. The minister also welcomed the plan by the EU and the Myanmar Timber Merchants Association to jointly organise a ＆Timber Certification Training Workshop＊.

Discussions continue with international bodies with a view to securing assistance in the field of forest conservation, legalisation and the development of the Myanmar wood industry.
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6. INDIA

  Call for budget to stimulate housing sector
Developments in India＊s housing sector reflect the state of the economy. Sales of new homes have fallen and developers are seeing margins shrink as the availability of mortgages has fallen and interest rates have climbed. According to some estimates around 20 mil. homes are required in urban areas to meet demand but activity in the sector has slowed.

As the Indian parliament begins to discuss the next fiscal budget the real estate sector is looking for a tax break similar to the 10 year tax holiday given to infrastructure companies. Representatives of the real estate sector say that providing the tax holiday will encourage them to market affordable homes on which margins are small. Increasing the stock of low cost homes is a priority for the government as it tries to reverse the expansion of slums in urban areas.

In addition to the tax relief sought, the real estate companies are calling on the government to allow greater tax deductions by home buyers on housing loan interest payments. Analysts point out that if interest rates decline this will have an immediate impact on demand.

India ranked high in Nielsen Global Consumer Confidence Index
Consumer confidence in India improved in the final quarter of 2012 according to the Nielsen Global Survey of Consumer Confidence and Spending Intentions. See press release: http://www.nielsen.com/in/en/news-insights/press-room.html.

The press release says ※54% of respondents in India indicated they would put spare cash into savings, eight percentage points lower than last quarter (62% in Q3). Thirty-nine percent said they would invest in new technology and products, while 36% reported they would spend spare cash on new clothes§.

In terms of job prospects the Nielsen press release says ※In the final quarter of 2012, 76 percent of online respondents in India were optimistic about their job prospects over the next 12 months, a point below the 77 percent in Q3 2012, and two points below the same period last year (78% Q4 2011)§.

Achieving a balance between mining and forestry
The planting of commercial tree species on wasteland, unused areas in non-forest lands, in agro-forestry and social forestry areas as well as along canals, roads and railway tracks offers an opportunity to meet the growing demand for timber, wood products and for raw materials for the paper and rayon industries.

Eucalyptus, casuarina, varieties of bamboos as well as shade trees such as neem, ashoka, bombax and others could contribute to improving the environment and bio-diversity.

Most of the states of India have been successfully establishing tree crops on non-forest lands, an effort that is commendable given the low forest and tree cover in the country. Currently the national tree cover is around 23% but the target is to increase this to 33%.

The success of these activities needs to be documented and promoted so that additional degraded and otherwise fallow and unused land could be identified and made available for tree crops.

The struggle to maintain the national forest cover is complicated by demands for expansion of mining concessions for iron ore and coal, many of which are in forest areas.

To try and achieve a balanced development Forest Survey of India has been given the task of identifying and mapping national pristine forests so informed decisions can be made on mining concession allocation.

Change in Forest Act brings huge benefits to forest communities
With the introduction of a Forest Rights Act and through efforts of the Tribal Affaires Ministry, the Environment Minister, Ms.Jayanthi Natarajan, succeeded in correcting the definition of bamboo from that of a tree, as defined in the Indian Forest Act of 1927, to its technical classification as a grass. This small but obviously necessary change will have a significant impact on the livelihood of rural communities.

Because of the change in definition the management, harvesting and sale of bamboo will no longer be the responsibility of the Forest Department but will fall under the Tribal Affairs Ministry. Bamboo is a major raw material for the paper and pulp industry and is thought to be worth around Rs.100 billion annually.

Because of this change in definition the benefits from bamboo production and sales, rather than going to government revenue will now be enjoyed by the rural communities where the bamboo is grown.

Sales of Teak and other hardwoods from Indian forests
During the log auctions held on 30th January 2013 approximately 14,000 cubic metres of teak logs were sold in the depots of Dang forests of Western India. Analysts report that, while overall the quality was satisfactory, the prices offered were lower than in the past auctions reflecting the current domestic economic uncertainties.

Average prices realised at the most recent auction are shown below. Prices are per cubic foot ex depot.
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Auction of such large quantities of logs is a relief to sawmillers who have been experiencing raw material availability problems.

Increased volumes of logs are being delivered to the depots. Depots in Central India expect to auction around 30,000 cubic metres of fresh logs and the dates for the next auction are soon to be announced.

Imported Teak logs
The availability and shipment of teak logs from overseas suppliers remains steady and prices have not changed significantly.

Current C & F prices per cubic metre, delivered Indian ports are shown below:

Variations are based on quality, log length and the average girth.

Domestic prices for air dried sawn timber remain unchanged as indicated below. Prices are shown as per cubic foot, ex-sawmill. Prices for imported KD (12%mc) sawn wood remain steady.

Good financial returns from plantations
More and more plantations of Poplar and Eucalyptus are being established to meet the growing needs for raw material. The financial returns to plantation owners are good as prices have been increasing.

Indian plywood manufacturers continue to source core and face veneers from Vietnam, Thailand, Malaysia, and Myanmar. Factories in Myanmar are said to be supplying good quality veneers and adequate quantities.

As the trend for Indian companies to build mills overseas continues more raw materials will become available enabling domestic mills to better utilize their installed capacity and meet the growing domestic demand.

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7. BRAZIL

   Growth estimates portray renewed optimism
The Brazilian Central Bank is forecasting that economic growth in 2013 will reach 4 percent. In December 2012 the economy expanded by 0.26% compared to levels in November and this reflected the overall slowdown in the economy towards the end of the year.

In 2012, the Brazilian government acted to lower interest rates, cut taxes for industry and ease credit but these measures did not spark a recovery in the economy.

In recent weeks the government has been targeting the availability of consumer credit as it views a recovery in credit as a key element in its efforts to reverse the economic slowdown.

While several financial institutions foresee an expansion of consumer credit in the coming months, interest rates on consumer loans are very high and this dampens demand for credit.

Inflation worries emerge once again
According to the Brazilian Institute of Geography and Statistics (IBGE), the inflation rate surged in January recording the highest monthly variation since April 2005.

The January 2013 inflation rate at 2.25% was also the highest for the month of January since 2003. Over the past 12 months the inflation rate rose to 6.15%, well above the maximum of 5.8% registered for the previous 12 months.

Currency weakens slightly against the dollar
In January 2013, the average exchange rate was BRL 2.03/USD compared to BRL1.79/USD during the same month in 2012. The 2013 rate reflects a slight depreciation of the Brazilian currency against the US dollar.

 Interest rates a key to recovery
A decision to hold the prime interest rate (Selic) at 7.25% was made by the Monetary Policy Committee (Copom) of the Central Bank (BC) at its last meeting.

Most financial analysts consider that the Selic rate should be maintained at its current level, at least during the first quarter of this year and that consideration should be given to lowering the rate to 7% in the second quarter if the economy does not show signs of recovery.

Removing bureaucratic hurdles will stimulate the timber sector
According to the Center of Industries of Wood Producers and Exporters (Cipem) the timber sector in the state of Mato Grosso is expected to grow tenfold over the next ten years due mainly to increased output from reforested areas and through improved forest management.

According to the Mato Grosso Reforestation Association (AreFloresta), the area of teak plantations in the state increased 20% between 2007 and 2010 and the area of eucalypt plantations more than doubled in the same period.

The supply of raw materials from plantations will more than compensate for the reduced harvest in the natural forest says the Association. At present the timber sector represents the fourth largest sub-sector in the state＊s economy after agriculture, livestock and manufacturing.

In 2012, the income generated through trade in forest products increased 9% compared to 2011, from R$ 256.1 million to R$ 278.9 million.

It is expected that in 2013 growth will be higher than last year supported by the State Environment Secretariat (SEMA) project ＆Restructuring of Land Regularization and Environmental Licensing Procedures in the State of Mato Grosso＊. This project aims to remove bureaucratic hurdles in the timber sector so as to stimulate expansion in the sector.

Acre State gets German funds to combat deforestation
The rate of deforestation in Acre State in the Amazon region has fallen by half over the past 25 years and the efforts of the state are a model for combating deforestation. Over the years the state has implemented an economic development model that includes forest protection and combating poverty.

For its efforts in the protection of the environment the German Government awarded Acre State euro 16 million to finance further environmental projects.

The contribution was forthcoming because the state administration is exploring the development of a REDD project, the international mechanism to financially compensate for the maintenance of tropical forests and mitigating greenhouse gases emissions.

The German donor has a specific programme called ＆REDD Early Movers＊ to contribute to efforts to halt deforestation.

This is the first time project funding has been provided to a state administration in Brazil and it is anticipated that this effort will attract a lot of national and international attention since Acre is a focus of attention when it comes to deforestation in Brazil.

Sources familiar with the project say that the State Government will use much of the project funds to support an existing scheme called the System of Incentives for Environmental Services (Sisa), created by the government of Acre to eradicate deforestation.

Pine exporters performed well in January
In January 2013, timber products exports (except pulp and paper) increased 3.2% compared to values in January 2012, from US$ 163.9 million to US$ 169.1 million.

Pine sawnwood exports increased 6.2% in value in January 2013 compared to January 2012, from US$ 9.7 million to US$ 10.3 million. In terms of volume, exports increased 12.5%, from 42,300 cu.m to 47,600 cu.m over the period.

Exports of tropical sawnwood fell 16% in volume, from 29,800 cu.m in January 2012 to 25,000 cu.m in January 2013 and in value the decline was 3.4% from US$ 14.7 million to US$ 14.2 million, over the same period.

Pine plywood exports increased 23% in January 2013 compared to January 2012, from US$ 25.2 million to US$ 31.0 million. Plywood exports also increased by 21.5% during the same period, from 69,300 cu.m to 84,200 cu.m.

On the other hand, exports of tropical plywood dropped from 5,800 cu.m in January 2012 to 5,400 cu.m in January 2013, a 7% decline. There was no change in the value of tropical plywood exports for the same period.

Data shows that the value of furniture exports dropped from US$ 29.5 million in January 2012 to US$ 28.5 million in January 2013, representing a 3.4% decline.

Brazilian Furniture Project delivers positive results
In 2012, furniture exports to Mexico under the ※Brazilian Furniture Project§ were outstanding according to analysts.

Brazilian furniture exports to Mexico fell by 14% between 2011 and 2012 while during the same period companies participating in the ※Brazilian Furniture Project§ increased their sales by 43% to the Mexican market. This result proves the effectiveness of the export model which aims to provide greater visibility to the Brazilian furniture industry in key international markets.

Companies participating in the project also saw demand in other countries improve. Sales to the United States grew by 8% in 2012 reaching US$78 million, compared to US$72.1 million in 2011.
Another significant increase was recorded in sales of Brazilian furniture to Peru which jumped from US$ 21.5 million in 2011 to US$ 27.4 million in 2012, an increase of approximately 27%. Sales to Angola also rose 13%, reaching US$ 52.9 million in 2012 compared to US$ 46.8 million in 2011.

Countries such as Chile, Colombia, the United Arab Emirates, Russia and South Africa are also included in the list of target markets under the project.

Brazilian furniture industry seeking capitalise on success in Mexico
The Brazilian furniture industry participated in the latest fair "Expomueble Invierno" held in February in Guadalajara, Mexico.

"Expomueble Invierno" is a long running furniture trade fair which has been held for the past 32 years. The fair brings together more than 500 local and foreign exhibitors in an area of over 52,000 square metres and this year recorded more than 10,000 buyers and visitors.

Mexico is one of the most important overseas markets for Brazilian furniture and the industry was determined to participate in the fair to enhance the image of Brazilian furniture and consolidate the Brazilian presence in the Mexican market.

Price trends
The domestic market remains rather quiet and average prices in lira have not changed over the past weeks.

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8. PERU

  Wood exports fell 3% in 2012, says Adex
Erik Fischer, chairman of the Wood and Wood Industry Committee of the exporters association, Adex, has reported that timber exports in 2012 reached US$ 164 million and that this represented a 3% decline on levels one year earlier.

He also reported on a meeting with the Deputy Minister of Foreign Trade and Forestry Union representatives where a commitment was made for all parties to work together to stimulate the forestry and forest industry sectors.

In this regard he stressed the importance of a sound legal framework to encourage investment and the importance of ensuring regulations for the sector do not become a deterrent to investment.

While export demand was subdued in 2012 the domestic economy was robust. Andina, the state news agency, has reported that GDP in 2012 grew by 6.3% with an especially strong performance (plus 5.9%) in the final quarter of the year.

The expansion of the economy, says Andina, was driven by growth in non-primary sectors, especially by increased activity in the construction (12.6 percent), commerce (6.4 percent), and services (7.1 percent) sectors.

Add more value to timber production, recommended expert
Jessica Moscoso, Executive Director of the Center for Technology Innovation - Wood (CITEmadera) explained that the main challenges for the Peruvian timber industry are to add greater value to their production and to take advantage of the diversity of timber species in Peru.

According to Moscoso, the lack of technology and research support and poor communication between forest authorities and industry is another challenge that must be addressed.

Streamlining bureaucracy to ease burden on business
Businesses in Peru have long complained about the burden of satisfying bureaucratic procedures which they say are endless and a serious handicap to industrial development in the country.

Recognizing that the bureaucracy is overwhelming business the government has plans to streamline government agencies and simplify the paperwork required for everything from applying for licenses to paying taxes.

The State News Agency, Andina, says the government plan by 2016 to reduce by 50% the time it takes for businesses to satisfy regulations. The government wants to simplify the procedures as part of its government modernization plan.

Fast economic growth in Peru attracts EU business delegation
The EU Vice President Antonio Tajani recently traveled to Peru with a large business delegation representing 37 European companies and industry associations from 10 EU member states.

In a press release the EU said the members of the business delegation had a combined turnover of some euro 320 billion, while the business associations in the delegation represented more than 64,000 companies.

This mission was part of the series of "Missions for Growth" designed to help European enterprises, in particular small and medium sized enterprises, to profit from fast growing emerging international markets. The visit to Peru was aimed at reinforcing partnerships to help industry and SMEs to fully exploit the potential for commercial relations between Peru and the EU.

During the visit agreements were concluded in the areas of raw material extraction and supply, industrial cooperation, small and medium sized enterprises development and construction. A further joint declaration was aimed at boosting tourism.
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9. GUYANA

  Greenheart logs shipped after a lull
During the period reviewed Greenheart fair and small sawmill quality logs were exported at fairly good average prices.

Purpleheart log export prices remain very favourable especially for the top qualities (standard and fair sawmill grades). On the other hand prices for small sawmill category Purpleheart logs dipped.

Mora log export prices remained stuck at the lower end of the export price range which was a disappointment.

Encouraging market interest in sawnwood
The demand from export markets for sawnwood was encouraging for both dressed and undressed timber.

Greenheart (Select, Undressed) prices fell from US$ 1,145 to US$ 950 per cubic metre. The good market demand for Greenheart (Merchantable, Undressed quality) drove top end prices to US$ 679 per cubic metre.

Purpleheart sawnwood (Select, Undressed) traded at US$ 1,060 to US$ 1,100 per cubic metre, an increase in its top end price from levels recorded two weeks earlier.

Mora sawnwood (Undressed) prices moved up during the period under review.

Dressed Greenheart sawnwood prices recorded a decline in the higher range price levels of the recent past. Prices fell from US$ 1,272 to US$ 1,060 per cubic metre. However, Dressed Purpleheart sawnwood export prices managed to move up compared to levels seen over the past month.

Processed wood products selling well in Caribbean markets
Demand for BB/CC quality Plywood market was noteworthy and export prices as high as US$ 589 per cubic metre were recorded during the period reviewed.

Guyana＊s Splitwood (shingles) continued to attract buyers and markets now extend to regions in the Pacific and Indian Oceans.

Guyana made Purpleheart doors attracted buyers in the Caribbean. For the first time in a long while some indoor furniture and door components found their way into the Suriname market.

First step in VPA 每 legality verification processes
The EU FLEGT Facility News of December 2012 / January 2013 headlined that the Guyana 每 EU VPA negotiations have begun with a focus on verification systems.

The first VPA negotiation session between Guyana and the EU was held in Georgetown on 5 December. The parties aim to have the VPA ratified by September 2015.

The parties agreed that the VPA should build upon Guyana＊s existing timber legality verification systems. These verification systems, which have been functioning for years, are likely to provide a sound basis for developing a legality assurance system, to be defined as part of the VPA.

It was agreed that the final legality assurance system should be locally appropriate and should serve the needs of the people without putting undue burden on them.

The Guyana Forestry Commission has set up a national technical working group composed of representatives from the public sector, the private sector and indigenous groups to follow the negotiations and participate in consultations.

This working group represents the first step towards broad consultation with stakeholders, an essential aspect of the VPA process. The parties agree that effective and genuine stakeholder involvement is the key for ensuring a solid basis for the country＊s definitions of legal timber and the
legality assurance system.

By entering into the VPA process, Guyana aims to demonstrate to international timber and wood-product markets that it can ensure robust timber legality and to strengthen its credibility in timber exporting. The next negotiation session will be held in June or July 2013.

Community Forestry a major development thrust for the Forest Sector
The Guyana Forestry Commission (GFC) has identified, as a priority action, the continuation of support to Community Forestry Associations to ensure the maximisation of benefits to forest based communities.

The support proposed will comprise training in sustainable forest management practices and participatory forest management as well as support for drafting operational guidelines for community forest activities.

2012 a very positive year for Community forestry in Guyana
The GFC recorded a total of 65 Community Forestry Organizations (CFOs) with State Forest Permissions (SFPs) 每 these are forest concession leases of under 20,000 acres in State Forests.

To-date, community organisations in Guyana have been allocated 120 concessions or 25% of the total small concessions allocated. It is estimated that at least 6,000 persons gain employment through these community organisation operations in the forest which, in 2012, produced over 25% of the total production from all small forest concessions .

Many community organisations are also now exporting forest products to international markets and have expressed plans to expand business.

Empowerment of communities to manage forests in a sustainable manner is a crucial aspect of the GFC Community Forestry programme. Community forestry will continue to be a focal area for the GFC in 2013.