Japan Wood Products
Prices
Dollar Exchange Rates of
26th March 2013
Japan Yen
94.46
Reports From Japan
Outgoing BoJ governor urges caution on aggressive monetary
easing
The new governor of the Bank of Japan BoJ, Haruhiko Kuroda has said the bank
will expand its aggressive monetary easing policy to ensure growth in the
economy.
The new governor, who headed the Asian Development Bank before being asked
to take the helm at the BoJ, said in the past the bank had been too timid
with its policies and he supports the 2% inflation target.
The outgoing governor Masaaki Shirakawa cautioned that expansive monetary
policy alone is not the solution but this must be matched by deregulation
and a reduction in Japan's huge public debt if the economy is to be turned
around.
Tankan survey to undergo modifications
In other news the BOJ has announced it will modify its Tankan survey in
three respects:
1) the introduction of a survey on the inflation outlook of firms;
2) the removal of some questions requesting quantitative responses; and
3) a review of survey methods relating to the "conditions for commercial
paper issuance" diffusion index (DI).
The Bank intends to implement these changes in the first half of 2014. For
more see:
http://www.boj.or.jp/en/statistics/outline/notice_2013/not130322a.htm/
Negotiations begin on EU – Japan FTA
On March 25 2013 the EU and Japan officially launched negotiations for a
Free Trade Agreement (FTA). The aim is for a comprehensive agreement in
goods, services and investment eliminating tariffs, non-tariff barriers and
covering other trade-related issues, such as public procurement, regulatory
issues, competition, and sustainable development.
The first round of negotiations will be held in Brussels from 15 to 19 April
2013, full details of the background and importance of this FTA to both
sides are provided in an EU press release:
http://trade.ec.europa.eu/doclib/press/index.cfm?id=881
Japan is the EU’s second biggest trading partner in Asia, after China. In
2011 EU exports reached euro 49 billion, mainly in the sectors of machinery
and transport equipment, chemical products and agricultural products.
In 2011 EU imports from Japan were euro 67.5 billion, mostly machinery and
transport equipment and chemical products.
In 2011, EU imports and exports of commercial services from and to Japan
were euro 15.9 billion and euro 21.8 billion respectively. Japan is a major
investor in the EU. In 2011 the EU inward investment reached a value of euro
144.2 billion.
Japan's inward FDI has increased markedly since the mid-1990s, but remains
very low in comparison with other OECD countries (EU investments worth euro
85.8 billion in 2011).
If agreement on a FTA can be secured it is expected to boost Europe’s
economy by 0.6 to 0.8 % of its GDP and will create 400.000 jobs. It is
expected that EU exports to Japan could increase by over 30%, while Japanese
exports to the EU would increase by around 23%.
The negotiations with Japan will address a number of EU concerns, including
non-tariff barriers and the further opening of Japanese public procurement.
Both sides aim at concluding an agreement covering the progressive and
reciprocal liberalisation of trade in goods, services and investment, as
well as rules on trade-related issues.
Negotiations on trilateral FTA and multilateral TTP
During a trade ministers' meeting in Cambodia it was announced that Japan,
China and South Korea will begin negotiations on a trilateral free trade
agreement. In March this year the first round of negotiations for the FTA
began.
The Japanese negotiators have indicated willingness to chair the first three
day meeting at which plans will be laid for the creation of separate
committees to develop suggestions on tariffs, investment and services.
The Japanese government will also join the other 11 member countries in
talks on the Trans-Pacific Partnership. Neither China nor South Korea is
participating in the TTP talks.
Japan’s prime minister faced strong opposition to entering into talks on the
TPP but has said the TPP could be the key international economic framework
to lift the Japanese economy out of its prolonged deflation. Japan has
already established a TTP secretariat headed by Akira Amari, the minister
for economic revitalization.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR), a subscription trade journal published every
two weeks in English, is generously allowing the ITTO Tropical Timber Market
Report to extract and reproduce news on the Japanese market.
The JLR requires that ITTO reproduces newsworthy text exactly as it appears
in their publication.
For the JLR report please see:
http://www.n-mokuzai.com/modules/general/index.php?id=7
January plywood supply
Total plywood supply in January was 538,400 cbms, 0.4% more than January
last year and 3.7% less than December last year.
Imported plywood was over 324,700 cbms, 3.4% less than January last year and
4.4% less than December. This is the second highest monthly import in last
twelve months.
Malaysian supply decreased by 28,600 cbms from previous month while
Indonesian supply was just about the same as previous month with 89,200 cbms.
Chinese supply increased by 13,600 cbms with 79,700 cbms.
Average monthly import for last twelve months is 292,800 cbms. Domestic
production in January was 213,700 cbms, 6.9% more than the same month a year
ago and 2.7% less than December, out of which softwood plywood was 195,300
cbms, 8.2% more and 3.5% less.
Shipment of softwood plywood in January was 220,100 cbms, which is the
second largest monthly shipment in last twelve months and the shipment
exceeded over 210 M cbms for four straight months and over 190 M cbms for
eight consecutive months since last June.
Inventories of domestic softwood plywood dropped down to 135,300 cbms, 15.5%
down from December. The manufacturers comment that considering order
balance,
this level of inventory is significantly low.
South Sea (tropical) logs
Log prices in Japan have gone up considerably because of weak yen.
In early March, prices of Sarawak meranti regular are 8,200-8,300 yen per
koku CIF, 200 yen up from February and 500 yen up compared to December last
year. Meranti small are 7,600-7,700 yen, 400 yen up from last December.
Sabah kapur regular prices are 12,200 yen per cbm CIF, 1,300 yen up. PNG
taun prices are about 8,400 yen, 900 yen up. Future prices will be higher
yet.
Log suppliers’ offer prices are climbing because of supply shortage by
unfavorable weather. Local plywood mills are actively procuring logs and
India also restarted buying.
Sarawak meranti regular FOB prices are $265-270 per cbm, $15 up and meranti
small are about $230, $20 up.
PNG also suffers foul weather and log production remains low.90% of PNG logs
go to China. Log prices went up by active purchase before the Chinese New
Year so that the export prices went up. China continues bullish purchase.
PNG’s calophyllum (40%-regular, 30%- small, 30%-super small) FOB prices are
$290, $25 higher than last December prices. Taun prices are $230, $10-20 up.
Mersawa are $270-280, $15-20 up.
Two years after the great North East earthquake
It has been two years since violent quake and tsunami with incredible power
hit the coast of North East Japan in March 2011.
Tsunami destroyed many plywood and lumber mills on the coast then devastated
the nuclear power plant at Fukushima, which contaminates wide area with
radioactivity and the people had to leave the area.
After the quake, shortage of supply of plywood was feared and huge orders of
imported materials to cover the shortage of plywood resulted in plunge of
plywood prices.
Also damage of Fukushima nuclear power plant reduces the power supply and
there are rising interest to substituting energy issues, which influence
even housing equipments in terms of energy saving and conservation.
Five nursery schools in Ishinomaki area were heavily damaged then one larger
wooden nursery school was rebuilt by support of UNICEF.
The school master comments that wood building gives warm and gentle feeling
and kid could play around with bare feet. There are other new wooden
buildings in the area with support from foreign countries.
Canada Wood group donated 4.5 million Canadian dollars for restoration of
the area to help rebuild wooden public facilities. As the first step, about
a half of the budget is
used to build library and harbor morning market in Natori city, Miyagi
prefecture.
It is now looking for applications for the second stage project. Supported
projects help activate local business activities.
Looking at damaged wood industry, frantic efforts have been made to bring
the business back to tracks. Tidal wave with tremendous power beat down
buildings and washed away machineries.
Even remaining machines are caked with mud. Many debris like cars, houses
and ships rushed in the buildings and employees had to remove them one by
one. In Ishinomaki plywood, wet waste paper floated in from neighboring
paper mill and stuck firmly to machines, which employees had to scrape off
patiently.
After two years, many restored except for some, which are damaged too much
to restore.
Plywood production of Seihoku Ishinomaki is about 70% of that of prior to
the quake and Hokuyo Plywood at Miyako is getting back to 60%.
Meantime, public housing for refugees is slow to put up when time limit for
temporary shelters is coming shortly.
There are only 56 units built in Fukushima and Iwate prefecture. In Iwanuma,
Miyagi prefecture, large development of 300 lots is under way but progress
is slow because of shortage of carpenters and materials like concrete.
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