2. GHANA

  Timber exports register positive gains
The Timber Industry Development Division (TIDD) of the
Forestry Commission has published the country’s timber
and wood export report for January 2018.

Ghana earned Euro19.35 million from the export of
31,289 cu.m of wood products in the first month of 2018.
This represented year on year 9% increase in export values
and an almost 2% increase in export volumes.

The major products shipped in January 2018 were air-dry
sawnwood (71%), kiln-dried sawnwood (12%), billets
(8%), sliced veneer (3%) and furniture parts. Most were
exported to China (41%) and Indian (34%). The report
also identified teak (34%), rosewood (34%), wawa (7%),
ceiba (5%) and papao/apa (3%) as the leading species
shipped.

Ghana/ EU test FLEGT license shipment
Late last year Ghana tested the Forest Law Enforcement,
Governance and Trade (FLEGT) licensing system for
timber export to Europe.

As exports to the EU are expected to be covered by the
FLEGT licensing scheme this should put an end to
concerns on the legality of export shipments as well as
concerns that illegal timber enters the domestic market
which has been a considerable challenge to address.

Ghana and the European Union (EU) members will
convene a meeting of the Expert Group on FLEGT/ EU
Timber Regulation (EUTR) in April 2018, in Brussels to
review progress towards Forest Law Enforcement,
Governance and Trade (FLEGT) licensing.

At the Brussels meeting the group will also review the
outcome of a trial shipment of FLEGT licensed timber
made last year in preparation for the Final Joint
Assessment of the Ghana Legality Assurance System
(GhLAS) set to be undertaken in May this year.

Ghanaian businesses confident in economy
The Institute of Economic Affairs (IEA) has surveyed
business confidence specifically looking at changes
between the first and second halves of 2017. In the first
2017 survey 77% of businesses expected Ghana’s
economy to grow while in the second survey 82% held the
same view.

The optimism expressed by businesses, say analysts, can
be attributed to the improved macroeconomic climate, a
more stable exchange rate, reduced inflation and lending
rates and the government initiative to lower power charges
for manufacturers. According to the Ghana Statistical
Service the economy grew by 8.5% in 2017 compared to
3.7% in 2016.
 

3. MALAYSIA 

 Election fever dominates domestic news
Malaysians will go to the polls on 9 May and election
fever in the media has pushed business news to one side.
However, international politics are having an impact on
business sentiment as exporters fear a looming trade war
between the United States and China.

Exporters benefit from US anti-dumping duties on
Chinese plywood
US anti-dumping duties imposed on Chinese plywood
imports have resulted in American buyers turning to
Malaysia and Indonesia which has created an opportunity
for exporters to raise plywood prices. Trade analysts feel
that, in the short term, the winners will be SE Asian
shippers while the losers will be consumers in the US.

Rise in thin plywood prices explained
The Japanese market for thin plywood is currently very
active and prices have been steadily increasing. Buyers in
Japan have offered an explanation for the increased
demand for thin plywood. First, say buyers, the
consumption tax will rise from 8% to 10% in October next
year and this has spurred the building of new homes and
an expansion of activity in home renovations. This, and
the construction work for the 2020 Summer Olympic
Games to be held in Tokyo, has increased demand for all
construction materials.

The demand side pull combined with the supply side push
from declining log production is impacting plywood
production by Malaysian and Indonesian plywood mills.
The combined effect of these issues is forcing up prices.

In contrast to rising demand for thin plywood, some
buyers say the market for thicker plywood is dull.

Plantation strategies - Sarawak can learn from China
Sarawak Timber Association (STA) chairman, Wong Kie
Yik, has suggested the state government should emulate
the planted forest strategies and policies in China to attain
State goals and ensure the sustainability of the State’s
timber industry. Wong said State strategies for plantation
forests need to be scaled up.

During a study tour to Southern China by STA officials it
was learnt that in China there is no royalty or cess on
plantation logs and that the government provides
infrastructure and supports research and development
agencies and provides technical support and advice.

Plywood price update
Plywood traders based in Sarawak reported the following
export prices:

4.  INDONESIA

  Plywood producers urged to capture the moment
The trade dispute between China and the United States has
benefitted the Indonesian timber sector according to
Purwadi Soeprihanto, Executive Director of Association
of Indonesian Forest Concessionaires (APHI).

Soeprihanto said that, as of the end of the first quarter
2018, there was a 28% increase in processed wood
shipments to the US as buyers there sought out suppliers
to fill the gap left by China. The shift by US importers to
Indonesian suppliers, especially of plywood, is expected to
continue for the rest of this year said Soeprihanto.

Furniture Industry denies abundance of plantation
timbers
The Association of Indonesian Furniture and Handicraft
Industry (HIMKI) has denied that Indonesia has abundant
plantation resources. Media reports say HIMKI is of the
opinion that stories on the abundance of plantation
production have been generated only to encourage the
government to allow plantation log exports.

According to Abdul Sobur, Secretary General of HIMKI,
Indonesia is having to import timber from New Zealand,
the United States, Sweden and Finland to satisfy domestic
demand. He commented that imported timber is of high
quality, competitively priced and for specific enduses
while domestic plantation timbers are costly due to the
extended distribution channel.

Call for revision of Forestry Law
The Vice Chairman of Commission IV of the House of
Representatives, Viva Yoga Mauladi, is proposing
revision of Law No. 19 of 2004 on Forestry as this does
not reflect the principle of control and management of
forest he said.

Yoga said, implementation of the current Forestry Act has
allowed many changes to the forest through, for example,
providing for forest area conversion. In addition, said
Yoga, the fire management guidelines and approaches to
indigenous and tribal peoples’ rights are inadequately
addressed.

Indonesian designers to exhibit in Italy
Twenty-seven Indonesian furniture designers will exhibit
at the Milan Furniture Fair, Salone del Mobile Milano set
to run 17-22 April.

The Creative Economy Agency (Bekraf), along with the
Indonesian Furniture Designers Association (HDMI), have
gathered creative works by local designers for the fair.

Joshua Simanjuntak, a Bekraf marketing specialist says
the aim is to highlight unique Indonesian styles utilising
local techniques and materials. Salone del Mobile Milano
is one of the largest furniture trade fair in the world.

Now easier for foreigners to work in Indonesia
The government has issued a new Presidential Regulation
(No. 20/2018) on the hiring of foreign workers in order to
simplify the permit application process. The most
significant change, say analysts, is the removal of the
mandatory Expatriate Placement Plan ( Rencana
Penempatan Tenaga Kerja Asing, or RPTKA).

A report from Indonesian Investments says Hanif Dhakiri,
Indonesian Minister of Manpower, is optimistic that a
more efficient and simpler permit application process for
foreign workers will result in rising foreign direct
investment in the country. This will then also lead to more
employment opportunities for the local population.

See: https://www.indonesia-investments.com/news/todaysheadlines/
new-regulation-makes-it-easier-for-foreigners-to-workin-
indonesia/item8713

5. MYANMAR

  Independent third party certification soon to be
operational
According to Barber Cho, Secretary of Myanmar Forest
Certification Committee (MFCC), independent third party
certification will be introduced very soon. He said that
auditor training has been given to the potential
certification bodies, three domestic and one international.

He further explained that the MFCC is strengthening the
Myanmar timber legality assurance system (MTLAS)
through which legality compliance assessment reports will
be issued independently by the certification bodies.

The MFCC has three objectives; to support due diligence
requirements in the EU for compliance with the EUTR, to
contribute to VPA negotiations and to ensure the MTLAS
is robust enough to satisfy requirements in other export
markets.

Sharp decline in timber exports
Statistics from Ministry of Commerce show that the
country exported US$11.9 billion during the period 1April
2017 to 28 February this year. Industrial products took the
top spot at US$5.468 billion followed by agricultural
products (US$2.525 billion), minerals (US$1.253 billion)
and maritime products (US$561 million). The export of
forest products stood at just US$179 million.

In fiscal 2016-17, the export of teak products was around
35,600 tons earning around US$110 million. In addition
190,000 tons of non-teak products were shipped earning
US$160 million. However, the export value for the same
range of products in fiscal 2017-18 at US$179 million (for
11 months) falls far short of the value in the previous year.

Analysts write that for the year as a whole there could be
an almost 40% decline recorded. The two year data
confirms that share of value of export for teak products
ranges between 40-45% while the volume is just 15 to
20% as the unit price of teak products are attracting high
prices.

Development of Thilawa Port to improve export
competiveness
A bulk terminal located at Thilawa will be developed and
operated by the International Bulk Terminal (Thilawa) Co
.(IBT). IBT has been jointly established by Lluvia, a
domestic agri-processing company and Japan-based
Kamigumi.

The International Finance Corportation has agreed to
provide a loan of US$15 million to contribute to the
construction of the international bulk terminal at Thilawa.
This bulk terminal will be one of the first in the country
and will have a capacity of more than one million metric
tonnes.

When in operation it is expected that transport and
logistics costs will be lowered which will improve the
competitiveness of Myanmar’s supply chain.

In the near future the port will be able to handle bulk
grains as well as non-agricultural commodities. The lack
of specialised and efficient bulk handling facilities forces
producers and traders to containerise bulk commodities,
which increase costs.

Asian Development Outlook report positive on
Myanmar
According to the ‘Asian Development Outlook
2018’ report Myanmar’s economy is projected to grow
steadily over the next two years as economic reforms,
strong global growth and higher foreign investment drive
growth. The Bank report says it expects the agricultural
sector to grow faster than manufacturing.

https://www.adb.org/publications/asian-developmentoutlook-
2018-how-technology-affects-jobs

6. INDIA

  High housing stocks holding down prices
The Indian housing sector has been affected by the
introduction of the new real estate law RERA,
demonetisation and the introduction of the standard Goods
and Services Tax (GST). The combined impact of these
developments has resulted in a slowdown in construction
as well as housing demand.

According to a recent survey by JLL India, thousands of
homes remained unsold across of India at the end of 2017
with Mumbai, Delhi-NCR, Chennai, Hyderabad, Pune,
Bengaluru, Kolkata the worst affected.

In 2017, just over 40% of new homes in the medium price
range were sold which helped developers reduce their
stock of units. Analysts report that in the main cities home
prices have not moved for months being held down by the
high level of unsold properties.

Draft forest policy revisions open for comment
The Indian Ministry of Environment, Forest and Climate
Change (MoEFCC) has released proposals for a new
National Forest Policy which signal a change in emphasis
from a community/environment approach to one focusing
on timber and forest-based industries. In 2016, changes
were proposed by MoEFCC but these were withdrawn as
it appeared to contradict the Forest Rights Act.

Analysts write “while there is merit in discussing new
concepts such as economic valuation of ecosystem
services, forest certification and a national forest
ecosystem management information system, for example,
there is no need for a complete shift in policy”.

For more see:
https://thewire.in/environment/national-forest-policy-draft-2018-
takes-one-step-forward-two-steps-back

Demand for imported plantation teak logs continues at the
same level as in the past few months but traders report
there has been a slowdown in deliveries from importers
due as credit facilities have been affected by the recent
financial scandal involving Indian Banks. Analysts say
access to working capital has been affected and this has
impacted the volume of imports.

As previously reported the quality and girths of plantation
teak logs has been declining since the end of last year.

Locally sawn hardwood prices
Prices for locally sawn hardwoods remain unchanged.

Imported sawn Myanmar teak
Prices for imported Myanmar teak remain unchanged.

Prices for imported sawnwood
Prices for imported sawnwood (KD 12%) remain
unchanged.

Plywood manufacturers raise prices to test market
reaction
Plywood manufacturers are reporting that prices for peeler
logs are trending higher as are chemical prices. Adding to
the pressure to increase plywood prices are rising labour
charges. To compound the difficulties faced by
manufacturers, transport costs are also going up due to the
higher cost of fuel.

These developments have prompted plywood
manufacturers to be looking to raise prices by 10%. With
immediate effect prices have been raised by about 5% to
test market reaction.

The key to securing prices to off-set rising costs will be
improved demand in the real estate sector. Analysts say
“with the beginning of the financial year and a more
disciplined structure in the realty sector, plywood
producers are expecting an improvement in demand”.

Current prices are shown below.

7. BRAZIL

  Deforestation rate declines in 2017
According to the Ministry of Environment, deforestation
continues to fall in the Amazon. After increases in
deforestation rates in 2015 and 2016 there was a 16%
reduction in 2017.

Between August 2016 and June 2017 clear cutting, as
registered by the Project for Satellite Monitoring
Deforestation in the Legal Amazon (PRODES) in the
National Institute for Space Research (INPE,) forest
clearing amounted to 6,624 sq.km.

The decline in deforestation, said the Minister, was the
result of the monitoring agencies having adequate funds to
conduct the work in the field. He explained that
deforestation can only be controlled through active
inspection and monitoring.

The ideal is that the standing forest is worth more than an
alternative land use and until that is assured there is a need
to continuously safeguard the forest through monitoring
and inspection and legal action against those breaking the
law.

Cash boost for Amazon Fund
An agreement has been signed by the Brazilian Institute
for Environment and Renewable Natural Resources
(IBAMA) and the Brazilian Development Bank (BNDES)
for the funding of environmental inspection activities.

Through the agreement the Amazon Fund will receive
around R$140 million to prevent, monitor and combat
deforestation and to promote conservation and sustainable
use of forests in the Amazon. It has been reported that
implementation will begin in 2020 with the provision of
logistics in the form of vehicles and aircraft.

The Amazon Fund is coordinated by the Ministry of the
Environment (MMA) and is charged with environmental
monitoring and control, land management and promotion
of sustainable management of production activities in the
Amazon.

Portugal - a growing market for Brazilian wood
products
Importers in Portugal are expected to increase timber
imports in the coming years due a shortage of domestic
resources the result of recent devastating forest fires. This
was stated by the Association of Wood and Furniture
Industry of Portugal (AIMMP) and is seen as an
opportunity for the Brazilian exporters.

According to AIMMP, Brazil’s trade with Portugal could
be made more efficient if the many small sized importers
in Portugal could come together as a consortium and place
few but large sized contracts which would be cost
effective in terms of transport and payments.

February a good month for furniture exporters
February was a very good month for exporters in Rio
Grande do Sul, one of the major furniture producing states.
February furniture exports expanded almost 30%
compared to a month earlier to US$14.2 million according
to the Market Intelligence Institute (IEMI). This increase
mirrors the trend nationwide as total February exports
jumped to US$53 million.

Rio Grande do Sul is the second largest furniture exporter
behind Santa Catarina State which accounted for 27% of
all furniture exports in February. The main export markets
for shippers in Rio Grande do Sul State were the United
Kingdom, 16% of export values for January and February
followed by Uruguay with 15% and Peru with 15%.

8. PERU

  Ex SERFOR head now Environment Minister
Peru’s new President, Martin Vizcarra, has said his cabinet
will continue the pro-business policies of his predecessor.
The President’s choice for Environmental Minister,
Fabiola Munoz the former head of Peru’s SERFOR, has
been greeted cautiously by environmental activists
because she spearheaded the effort to have sawnwood
shipments to the US released after suspicions some of the
timber was illegal.

Sawnwood shipments in 2017 subject to investigation
The Government has recently received a request from the
US Office of the Trade Representative of the United States
for details of some shipments of sawnwood to the US and
Puerto Rico in 2017.

Analysts write that the companies that shipped the timber
in question have a good track record so an investigation
should provide an opportunity to show the performance of
the companies that export to the North American market.

In 2017 around 75% of exports to the US were made by
three companies, two of which have FSC forest
certification.

Adding value to wood residues
The Pucallpa CITEforestal in the Technological Institute
for Production (ITP) is a specialised technical body within
the Ministry of Production. This agency has recently
provided training on log residue utilization to small and
medium enterprises in the timber sector in Ucayali.
Participants learned how to add value to forest and mill
residues that are usually discarded or sold as firewood.

The use of waste wood represents an opportunity to added
value since it aims to transform waste into saleable items.

Residues offer an opportunity for entrepreneurs and
carpenters in the region to improve incomes through
innovative use of residues.