3. MALAYSIA 

  Exports down in first 8 months of 2018
Malaysia’s Minister of Primary Industries, Teresa Kok,
recently reported that wood product exports in 2018 are
likely to be lower than the RM23.21 billion in 2017.
Between January and August 2018 the value of exports
declined almost 6% to to RM14.6 billion compared with
the same period in 2017. Wooden furniture contributed
almost RM5 billion to 2017 export earnings.

The decline in 2018 exports has been put down to the
weak global economy, the trade dispute between the US
and China and because weather conditions in the main
production area of the country were bad for much of the
year.

In related news, Awang Tengah Ali Hasan the Second
Minister for Urban Development and Natural Resources,
disclosed that for the period January to August 2018 the
Sarawak timber sector registered export earnings of
RM3.58 billion. This was a decline of around 14% from a
year earlier.

The Minister said the decline in Sarawak export earnings
was mainly due to the reduction in the supply of natural
forest logs and the inability of current mills to process
smaller diameter plantation logs.

He also said that up to August 2018 the production of logs
from the natural forest fell 18% from 3.8 million cubic
metres in the first eight months of 2017 to 3.1 million
cubic metres in the same period of 2018.

Large scale reforestation planned for Sabah and
Sarawak
Sabah Chief Minister Mohd Shafie Apdal has announced
that the State Government will undertake large scale
reforestation to ensure wood supplies for industries in
Sabah.

The aim is to create a resource base that will attract
investors especially furniture makers in Peninsular
Malaysia. Plans are being drawn up for planting a mixture
of valuable hardwoods such as red seraya, meranti as well
as fast growing timbers such as eucalyptus and acacia.

Shafie said the State Government would play a role in
supplying wood for furniture manufacturing and priority
would be given to furniture factories in order to encourage
more high quality furniture manufacturers to Sabah.

In related news, the Sarawak Forest Department has
announced they will begin a large-scale forest landscape
restoration (FLR) programme this year. Director Hamden
Mohammad said the priority is to plant indigenous species
such as belian, meranti, keruing, selangan batu,
engkabang, kapor and other local species on degraded
areas within licensed harvesting areas. The state
government has RM10 million for this initiative.

Plywood traders based in Sarawak reported the following
export prices:

4.  INDONESIA

  No duty relief for Indonesian panel exports to US
The US has rejected Indonesia’s request for import duty
relief for woodbased panel products citing its review of the
Generalized Systems of Preference (GSP).

The Director of Bilateral Negotiations in the Indonesian
Ministry of Trade, Ni Made Ayu Marthini, said that the
US has informed him that a further review will be
conducted this year. Indonesia had requested that some
commodities be re-introduced into the GSP facility.

In response to the US decision Gunawan Salim of the
Indonesian Wood Panel Association (APKINDO)
explained that Indonesian woodbased panel products are
very competitive in the US and as such the revocation of
the GSP facility is not expected to have much effect on
export volumes.

US$12 billion forestry sector export earnings
Siti Nurbaya, the Minister of Environment and Forestry
(KLHK), reported that the timber trade and forestry
activities in 2018 contributed US$12.17 billion in foreign
exchange earnings. This, she said, was the highest
recorded over the last 10 years.

She expressed satisfaction with this achievement figures
and applauded forestry sector enterprises for improving
their management and marketing.

Siti announced that in 2019 efforts will be focused on
several issues including maintaining the balance of
environmental sustainability in development, increasing
the economic contribution of the sector through new
business developments and a circular economy as well as
strengthening the foundation for development of the
sector.

See: https://www.wartaekonomi.co.id/read209918/sektorkehutanan-
sumbang-devisa-us12-miliar.html

Export volumes rise but earnings remain flat
The Chairman of the Indonesian Sawmill and Wood
Working Association (ISWA), Soewarni, has pointed out
that while export volumes are increasing export earnings
remained stagnant in 2018 because of weaker price
structures in international market for processed wood
products from Indonesia.

Soewarni forecast that 2019 exports earnings from
processed wood products are likely to be little changed
from the previous two years.

Soewarni hinted that part of the explanation lies in the
falling prices for timber from Indonesia’s domestic
Industrial and community plantations. However, he
pointed out that prices for products from natural forest
timbers remain firm.

‘Common but Differentiated’ responsibilities concept
agreed in PAWP
Nur Masripatin, Indonesia’s chief negotiator said the
government welcomes the adoption of the Paris
Agreement Work Programme (PAWP), the outcome of a
meeting in Katowice, Poland.

Indonesia pushed for a balanced and comprehensive work
programme and supported the concept of ‘common but
differentiated’ responsibilities and capabilities. Indonesia
hopes the PAWP will address the many threats from
climate change including threats to efforts to alleviate
poverty, to achieve sustainable development and to protect
the environment.

See:
https://en.antaranews.com/news/121372/indonesiawelcomes-
agreement-to-adopt-paris-work-programme

Trade deals a way to minimise impact of tariffs on
competitiveness
Indonesia’s trade deficit, which topped US$7.5 billion in
November, is of great concern and the government is
searching for new ways to boost exports. Part of the
problem, said Enggartiasto Lukita the Minister of Trade,
are the tariffs are imposed by importing countries on
Indonesian products. To address this the Minister called
for the negotiation of more trade agreements.

Currently the government is negotiating trade deals with
Mozambique, Tunisia, Morocco and the European Union
but he pointed out that negotiations are progressing
slowly.

The Trade Minister estimated that year on year
export growth in 2018 would be only 7.5% noting that this
is well below the 11% target for 2018 which was already
well below the 16% growth in 2017. The main reason
cited for the poor performance was the global
economic turmoil.

5. MYANMAR

  Reduction in log harvest will take account of domestic
needs
Ohn Win, Minister for Natural Resources and
Environment, has said the government plans to reduce teak
and hardwood production by the end of the 2019-20
financial year but the reduction will take account of
domestic raw material needs and also the requirements of
the Myanma Timber Enterprise (MTE).

Forest cover only 40-plus percent
According to the Central Statistic Department forest cover
in Myanmar was 44.54% in 2013-14 but had declined to
41.3% by the end of the 2017-18 financial year.

A continuous decline has been observed in recent years.
Forest cover was recorded at 44.54% in the 2013-14 FY,
43.73% in the 2014-15 FY, 42.92% in the 2015-16 FY,
42.11% in the 2016-17 FY and 41.3% in the 2017-18 FY.

Peace in Kachin and Shan states opens way for more
illegal logging
The local media in Myanmar has quoted people living and
working in the Kachin and Shan States as saying the
illegal timber border trade became more apparent since the
Myanmar Armed Forces announced a 4-month truce in the
two states.

Separately, it has been reported that during the financial
year of 2016-17 over 50,000 tons of illegal timber was
confiscated of which 20% was in Kachin State. From 2000
to 2014, 119,298 tons of illegal timber was seized in
Kachin.

Analysts are of the opinion that timber buyers in Yunnan
Province, which borders Myanmar, were not aware that
Myanmar had banned the export of logs and hand-sawn
flitches so continued to buy these products and process
this timber for the domestic and international markets.
Exporters in Myanmar face many hurdles with exports of
teak products to the EU and question why the authorities
in the EU are silent on teak exports from China.

New road and bridge to China
The Myanmar Ministry of Construction has announced a
deal has been negotiated for construction of a new road
and bridge near the existing Goke Hteik railway viaduct in
western Shan State which will boost trade between China
and Myanmar.

The Ministry says a local company, Oriental Highway Co.
the China Harbour Engineering Co. Ltd. and the China
Communications Construction Co. Ltd. will undertake the
work at an approximate cost of US$100 million.

6. INDIA

 Sawnwood price index moves higher
India’s official wholesale price index for all commodities
(Base: 2011-12=100) for November 2018 released by the
Office of the Economic Adviser to the government rose to
121.8 from 121.7 for the previous month. The annual rate
of inflation based on monthly WPI in November 2018 was
4.64% compared to 5.28% for the previous month.

The November price index for ‘Manufacture of Wood and
of Products of Wood and Cork ‘ group rose by 0.6%
to 133.5 from 132.7 for the previous month due to higher
price of sawnwood particleboard and other panel products.

The press release from the Ministry of Commerce and
Industry can be found at:
http://eaindustry.nic.in/cmonthly.pdf

Surge in sawnwood imports
The Indian trade magazine ‘Plyreporter’ recently carried a
story on the rise in sawnwood imports in 2018.

Data from India’s Directorate General of Commercial
Intelligence and Statistics (DGCI&S), says Plyreporter, is
showing that sawnwood imports in 2018 were over 40%
more than in the previous year. In previoius years Indian
manufacturers relied on imported logs for raw materials
largely because of the high duties on imported sawnwood
but since 2015 the value of sawnwood imports has almost
doubled.

The Plyreporter article says that much of the good quality
imported sawnwood finds its way to southern India.
Hardwood sawnwood is imported from Malaysia,
Vietnam, Myanmar, USA and African countries whereas
softwood sawn is shipped from Canada, Europe and the
USA.

While sawnwood imports have shown impressive growth
imports of logs have also increased registering an almost
7% rise in the last fiscal year.

For more see:
http://www.plyreporter.com/article/30474/sawn-timber-importposts-
44-growth-in-fy-2018

Plantation teak prices
The Rupee/US dollar exchange rate has held steady at
Rs.70 to the US dollar and traders are anticipating that the
Rupee will stay at around this level bringing some relief
after the period of exchange rate volatility at the end of
2018. CIF prices for imported plantation teak remain at
levels reported at the end of November.

Locally sawn hardwood prices
Demand for imported sawnwood is firm and the
stabilsation of exchange rates has widened margins made
by importers. Prices for imported hardwood sawnwood
continue as previously reported.

Myanmar teak prices
In an effort to secure steady supplies of good quality
Myanmar teak several importers have visited suppliers in
Myanmar only to find that the business environment is not
conducive for expanded shipments. The importers hope
that the Myanmar authorities will introduce policies and
export rules that boost trade.

Indian millers operating in Myanmar are shipping mainly
to international markets with only small volumes being
available for Indian buyers but complain that the business
environment is tough in Myanmar.

Sawn hardwood prices
Prices for sawn hardwood imports have remained steady
since the previous report.

Plywood market
Analyst report that the supply and demand for wood based
panels is still out of balance such that supplies are
increasing faster than the growth in demand. While there
is firm activity in the real estate and construction sectors
panel production has expanded too fast. Part of the
problem is that while the number of new housing units
may be increasing but the floor area of these new homes is
getting smaller.

In the medium term there is enough activity in the
rehabilitation of slum dwellings and the government’s
Housing for All scheme that panel demand should steadily
increase.

It is not only plywood manufacturers who are under
pressure; MDF and particleboard makers face the sam
situation with new factories coming on stream before there
is a market.

Severe air pollution problems in major cities
The state-run Central Pollution Control Board (CPCB) has
reported that air pollution has reached emergency levels in
New Delhi.

At one point in early January the PM2.5 reached 440 about
11 times higher than the safe level. According to the
CPCB, an Air Quality Index (AQI) level from 201 to 300
is considered poor, 301 to 400 is very poor and 401 plus is
severe.

The situation is alarming in many other cities such as
Mumbai, Kolkata and Pune.

See: https://weather.com/science/environment/news/2019-01-04-
new-delhi-india-air-quality-emergency-pollution

Activists are promoting the creation of micro forests in
200 medium and major cities of India as a means of
boosting oxygen in the air but this will not lower the
PM2.5 levels.

7. BRAZIL

  1 billion trees by 2030
Brazil aims to restore 12 million hectares of forest by 2030
to partially address the loss natural vegetation on around
20 million hectares especially on the border of the socalled
Legal Amazon, the Mata Atlântica forest and
Cerrado ecosystem region.

To support the government’s aim a campaign led by the
Nature Conservancy (TNC) wants to plant one billion
trees in the country.

The TNC campaign called "Restaura Brazil" aims to
generate public interest and seek support from the private
sector through partnerships and support from other NGOs
and government agencies.

Wood preservation companies advancing selfregulation
Brazilian wood treatment companies will be adopting a socalled
Self-Regulation Programme (Qualitrat) in order to
provide better services to consumers.

The Qualitrat initiative was developed by the Brazilian
Association of Wood Preservers (ABPM) in partnership
with the Technological Research Institute (IPT) and the
Totum Institute.

Under the Qualitrat programme participating companies
agree to introduce internal control procedures and accept
rigorous evaluation in order to secure a seal of approval.
According to the Totum Institute certification criteria
includes legal integrity, quality management,
environmental management, labour, health and safety
management as well as ethical commitments and social
responsibility.

Export turn-around in 2018
According to the Brazilian Association of the
Mechanically Processed Wood Industry (ABIMCI), the
Brazilian solid wood industry experienced positive signs
of recovery towards the end of 2018, a major turn-around
after consecutive declines over the past eight years. This
was achieved despite an uncertain global economic
environment and the devastating Brazilian truck drivers'
strike in mid-2018.

However, while export volumes have been rising profit
remain flat because of rising production costs and poor
infrastructure.

Regardless these difficulties ABIMCI says exports in 2019
are likely to continue to grow especially as a high
proportion Brazil’s wood products for export are certified
legal.

8. PERU

  Improving forest management with DataBOSQUE
software
After more than three years of work supported by the
German Corporation for International Cooperation (GIZ)
Peru’s National Forestry and Wildlife Service (SERFOR)
was handed DataBOSQUE software which will facilitate
reliable timber tracking. DataBOSQUE was developed in
close cooperation with the private sector and public
forestry institutions at the national and regional levels.

Distribution of this software will be free and a series of
training events have been arranged jointly by SERFOR
and GIZ aimed at training trainers in the different
Amazonian regions (Loreto, Ucayali, Madre de Dios, San
Martín and Junín).

Most deforestation occurs in plots under 5 hectares
Peru’s Ministry of Agriculture and Irrigation, together
with the Ministry of Environment, reported in December
last year that deforestation in 2017 in the Peruvian
Amazon was 155,914 hectares. Compared to a year earlier
this represented a 5.3% decline.

It was reported that the majority of the forest loss occurred
in plots under five hectares and 60% of the deforestation
was concentrated in the Departments of Ucayali, Madre de
Dios, Huánuco and Loreto. The area of Peru’s Amazonian
forest in 2017 was reported as 68,577,351 hectares.

Wikipedia writes “Most Peruvian territory is covered by
dense forests on the east side of the Andes, yet only 5% of
Peruvians live in this area. More than 60% of Peruvian
territory is covered by the Amazon rainforest, more than in
any other country.”

See: https://en.wikipedia.org/wiki/Peruvian_Amazonia

Chilean officials share experiences in forest
management
In order to share and exchange successful experiences in
the forestry sector of Peru and Chile, officials of the
National Forestry Corporation and the National Forestry
Institute of Chile, visited officials and producers in the
forestry sector in Cajamarca the capital and largest city of
the Cajamarca Region as well as an important cultural and
commercial centre in the northern Andes.

During their stay in Cajamarca, Chilean officials presented
the history of their country's forestry development, from
the depredation of their forests to the installation of forest
plantations, as a resource to improve the environment,
generate ecosystem services and contribute to improving
the quality of life of the Chilean producers.