4.
INDONESIA
Government revokes 3 mil. ha. forest
permits
In a virtual press statement Indonesian President Joko
Widodo announced the government has revoked 192
forestry sector permits covering an area of 3,126,439
hectares because companies that have the permits have not
carried ou any activities in recent years.
According to the President, this step was taken in an effort
to improve the governance of natural resources and to
encourage community welfare through productive forest
management. This isdecision is unprecedented in
Indonesian history. Through this move more access to
forest areas can be granted to communities, land
productivity and investment can be raised and governance
can be strenghthened.
The Environment and Forestry Minister pointed that 1.7
million hectares of revoked palm oil permits in state forest
areas account for over 57% of the total revoked permit
areas. In addition permits for logging and pulpwood
concession areas covering over 1.32 million hectares had
also been revoked.
See:https://infopublik.id/kategori/nasional-ekonomibisnis/595482/pemerintah-cabut-izin-3-1-juta-hektare-sektorkehutanan
and
https://foresthints.news/minister-details-dataset-of-indonesiarevoked-palm-oil-forestry-permits/
Climate change resilience, Ministry prepares plans for
forestry
The Director General of Sustainable Forest Management,
Ministry of Environment and Forestry (KLHK), Agus
Justianto, identified 6 forest management activities that
can contribute to climate change resilience.
The six management activities are:
reducing emissions from deforestation and
peatland
increasing the capacity of natural forests in
carbon sequestration (reducing degradation and
increasing regeneration,
restoration and improvement of peat water
systems
rotational/planned forest rehabilitation through
intensive silviculture
Reduced Impact Logging techniques
optimising unproductive land for plantation forest
development through multi-business forestry
The government policies for forest management in support
of climate change resilience are built on 5 pillars namely;
area certainty, mutual guarantee, productivity, product
diversification and competitiveness. To achieve these aims
efforts will be required to strengthen collaboration,
coordination, and harmonization of interests.
See:
https://www.beritasatu.com/nasional/872475/hadapiperubahan-iklim-klhk-siapkan-programpengelolaan-hutan-lestari
In related news, Environment and Forestry Minister, Siti
Nurbaya, said she will be stepping up efforts to strengthen
the country's carbon governance following the recent
enactment of a presidential regulation on the economic
value of carbon. The Minister stressed that she would
further intensify efforts to strengthen legal measures, to
ensure that good carbon governance practices continue to
be implemented under the law.
2021 forest sector performance good despite the
pandemic
The Ministry of Environment and Forestry (KHLK) said
that in 2021 the performance of the foresrt sector was very
positive despite the COVID-19 pandemic. Agus Justianto
said in a written statement that log production was
recorded at 51.81 million cubic metres or around 6%
higher than in 2020.
He added, processed wood production was 43.8 million
cubic metres (up 4%) and non-timber forest product
(NTFP) production was 651,000 tonnes (up 30%). In
terms of export value of forest products in the fourth
quarter of 2021 increased by 25% year on year to
US$13.85 billion.
See:
https://www.antaranews.com/berita/2632645/klhk-sebutkinerja-pemanfaatan-hutan-tumbuh-positif-meski-pandemi
Supply gap an opportunity for Indonesia
Chairman of the Presidium of the Indonesian Furniture
and Craft Industry Association (HIMKI), Abdul Sobur,
said the furniture and craft sector set a record in sales in
2021 and the forecasts that exports in 2022 will continue
to grow despite the winding down of government
economic stimulus measures in export destinations.
He pointed out that there is a market opportunity in the
United States as a result of reduced imports of products
from China due to the trade dispute between the two
countries. The gap in supply has created an opportunity for
Indonesia along with Vietnam, Malaysia, and other major
producers.
See:
https://ekonomi.bisnis.com/read/20211231/12/1483861/chinasulit-masuk-pasar-as-eksportir-mebel-ekspor-2022-naik
Forest cover area reaches 95.6 million hectares
The Director General of Forestry Planning and
Environmental Management (PKTL) in the Ministry of
Environment and Forestry (KLHK), Ruandha Agung
Sugardiman, reported that Indonesia's forest cover area
was 95.6 million hectares or about 51% of the total land
area. He added of the 95.6 million hectares around 46.9
million hectares are primary forest, 43.1 million hectares
of secondary forest and 5.4 million hectares of plantation
forest.
See:
https://www.antaranews.com/berita/2588981/klhk-luastutupan-hutan-indonesia-capai-956-juta-hektare
5.
MYANMAR
Survival of the forest and timber
industry
The business model of wood industry can be reshaped in
2022 to account for the changing political and
environmental situation. The continuation of efforts to
verify legality, the trade restrictions in force the EU and
US along with the new policy of the current State
Administration Council (SAC) are, among others, the
major drivers of change. Deforestation remains a key issue
that must be addressed.
Complexity of legality verification
Since the EUTR was introduced the legal status of
Myanmar timber has been questioned. Most EU member
States regard Myanmar timber as illegal given the current
conflict, poor traceability and corruption.
Before the conflict the EU and the US were the two major
markets along with India. In addition there is a large unreported
and unverified cross border trade in timber with
China. It is learnt that EU imported about US$150 million
during the three years 2018-2020 while US imported
around US$50 million over the same period. There are no
trade barriers in the India market but the demand is not
stable.
Myanmar had begun VPA negotiation but these stalled
before the military government seized power and now the
EU has suspended aid and all activities in the country. The
PEFC, which had been helping Myanmar, suspended its
endorsement of MFCS/MTLAS as the requirement for
wide public consultation could not be guaranteed. As a
result, the legality issue will remain as the major challenge
for the timber sector.
The extraction policy
Regarding the internal harvesting policy, in contrast to
expectations on the part of local and international
observers, the new administration did not reverse the
reform process initiated by the previous government. The
previous NLD-Led government reduced harvest levels
very sharply and initiated reform processes. However, it
has been observed that illegal logging practices are now at
an alarmingly high level and the reform process is severely
undermined by the current illegal logging.
The reform process, including lowering harvest levels,
does not seem adequate to safeguard the forest the
evidence for this is the statistics on confiscated timber
revealed by the Forest Department. Among the local
foresters there was even a debate that the conservation and
safeguarding the forest should be prioritised rather than
the efforts to confiscate of illegal timber.
Some international observers have commented that it is
possible that the Myanmar military regime will be tempted
to deregulate the logging sector in order to stimulate local
employment and save business from shutting down.
On international trade it has been suggested that, to avoid
the potential problems in dealing directly with the
Myanma Timber Enterprise which has been sanctioned by
the US and EU, foreign buyers could conduct business
directly with the private sector thus circumventing
international sanctions.
This is not happening but, while there has been no policy
change regarding the forest regulations, weak law
enforcement is making the forest vulnerable to illegal
logging.
Combating illegal trade
Both external observers and policymakers in Myanmar
commonly assume that preventing illegal logging and
trade in illegal timber is the responsibility of the Forest
Department alone. But, given the challenges its personnel
face on the ground, a joint approach between
multiple agencies is needed. This in turn requires that
combating illegal logging be made a priority and not just
within the country but also through consultations with
Myanmar’s neighbours.
For every Forest Department employee there are 8,000 ha.
of forest to be overseen, a near-impossible task without
access to high level technology. Officials who are
responsible for safeguarding natural forests are not
provided with the tools needed to uncover networks of
patronage and the government takes few precautions to
protect them.
The fact that such illegal activity takes place in isolated
spots means that there are no police in the area who could
prevent an official from being attacked. Under these
circumstances combating illegal logging is the most
important task for the forestry sector.
Sawnwood ban unlikely to contribute to forest
conservation
Concern has been raised that the policy to restrict the
export of sawnwood should be reviewed because it will
not contribute a positive impact on exporters and forest
conservation. Myanmar urgently needs a reliable Chain of
Custody system so that millers in Myanmar and the
importers will be convinced no illegal timber has entered
the supply chain. For teak the export of downstream
products should be maintained since teak itself is valueadded
products.
A trade observer notes “if the illegal logging is not
prevented sooner or later the timber industry will suffer
the consequences of not being able to verify legality and
the country will be blamed deforestation”.
Foreign trade drops US$600 million
Myanmar’s foreign trade has dropped nearly US$600
million since the mini-budget of the 2021-22 financial
year (FY) which started in October 2021 according to the
figures released by the Ministry of Commerce.
Between 1 October and 24 December last year the
country’s trade was US$6.662 billion compared to the
same period a year earlier. Myanmar exports agricultural
products, animal products, minerals, forest products and
finished industrial goods while it imports capital goods,
raw industrial materials and consumer goods.
6. INDIA
Optimsistic export
forecast
The Minister of Commerce, Piyush Goyal, said during a
press conference that the government anticipates exports
will exceed US$400 billion this fiscal year. In December
2021exports rose almost 40% year on year to US$37.29
billion, the highest ever monthly amount.
The Minister commented that it is not expected that the
latest surge in covid infections will cause any major
disruption of supply chains except in cases where shipping
staff have to be quarantined.
See:
https://commerce.gov.in/press-releases/indias-merchandisetrade-preliminary-data-december-2021/
Container costs punishing exporters
Exporters continue to struggle with extremely high freight
rates and the Federastion of Indian Export Organistaions
(FIEO) has advised the government that freight rates to
Ausralia and New Zealand have increase 1,156% , to East
Africa 551%, to European destinations 962 %, to Far East
destinations 244% and for Gulf countries 172 %.
The FIEO has suggested the counrty must have a National
Shipping Carrier to ensure the stabiilty of the export
sector.
Plywood
No price increases have been reported.
India plywood market 2022-2027
According to IMARC Group’s latest report, titled “Indian
Plywood Market: Industry Trends, Share, Size, Growth,
Opportunity and Forecast 2022-2027”, the Indian plywood
market reached a value of INR 243.9 billion in 2021.
IMARC Group expects the market to reach INR 344.2
billion by 2027, a CAGR of 5.97% during 2022-2027.
See:
https://ipsnews.net/business/2022/01/10/indian-plywoodmarket-size-share-growth-trends-key-players-and-opportunity-2022-27/
MDF prices increased again
Plyreporter has offered an anlysis of why domestic MDF
manufacturers have had to raise prices once again saying
the steep increase in wood raw material costs along with
increases in prices of resins and other inputs has given
manufacturers little option but to raise prices.
In addition, there has been a sharp drop in MDF imports
due to high freight costs and increased consumption in
Europe and the Middle East.
For the analysis by Plyreporter see:
https://www.plyreporter.com/article/92698/mdf-prices-furtherrise-by-7%
7.
VIETNAM
Vietnam trade highlights
According to statistics from the General Department of
Customs exports of wood and wood products (W&WP) in
November 2021 reached US1.27 billion, up 2.5%
compared to November 2020.
In particular, exports of WP reached US$915.7 million,
down 9.9% compared to November 2020. Over the 11
months of 2021, exports of W&WP reached US$13.4
billion, up 21% over the same period in 2020. In
particular, the export of WP reached US$9.99 billion, up
by 18% over the same period in 2020.
W&WP exports to the UK in November 2021 amounted to
U 23.7 million, up 26% compared to November 2020.
In the 11 months of 2021 exports of W&WP to the UK
market reached US$239.4 million, up by 16% over the
same period in 2020.
W&WP exports to Australia in November 2021 were
valued at US$17.2 million, down 11% compared to
November 2020. In the 11 months of 2021 exports of
W&WP to Australia reached US$149.9 million, up by
2.8% over the same period in 2020.
According to the General Department of Customs
Vietnam's wood imports in November 2021 amounted to
458,300 cu.m worth US$158.2 million, up by 14.4% in
volume and 1.7% in value compared to October 2021.
Compared to November 2020 imports decreased by 23%
in volume and 11% in value.
In the 11 months of 2021, imports of wood raw materials
reached 5.948 million cu.m worth US$2.01 billion up
9.2% in volume and 22.4% in value over the same period
in 2020.
Vietnam's ash imports in November 2021 reached 15,600
cu.m worth US$3.7 million, down by 36% in volume and
39% in value compared to October 2021. Compared to
November 2020 imports decreased by 39% in volume and
39% in value. In the 11 months of 2021 imports of ash
reached 409,600 cu.m, worth US$5.5 million, down by
11% in volume and 6% in value over the same period in
2020.
Vietnam's exports of NTFPs in November 2021 were
recorded at US$79.11 million, up by 15.8% compared to
October 2021 and up 39.4% compared to November 2020.
In the 11 months of 2021, exports of NTFPs amounted to
US$780.08 million, up by 43.9% over the same period in
2020.
Ash wood from EU 92% total imports
Due to the scarcity and the surge in price of US wood the
EU became Vietnam’s largest supplier of ash during the
first 11 months of 2021 accounting for 92% of total ash
imports.
According to the General Department of Customs
Vietnam's ash wood imports in November 2021 reached
15,600 cu.m worth US$3.7 million, down 36% in volume
and 39% in value compared to October 2021 and
compared to November 2020 they dropped by 39% in
volume and 39% in value.
In the 11 months of 2021, imports of this wood reached
409,600 cu.m worth US$95.5 million, down 11% in
volume and 6.4% in value over the same period in 2020.
Forest environnemental service (FES) revenue
surges
21%
On 22 December the Vietnam Forest Protection and
Development Fund held an online conference to review
the implementation of the tasks defined for 2021 and plan
of 2022.
The conference was chaired by Nguyen Quoc Tri, Director
General of VNFOREST, Chairman of the Fund
Management Council and the Director of The Vietnam
Forest Protection and Development Fund. Participating in
the online conference weree the central fund leaders and
44 local forest protection and development funds
(Provincial Funds).
According to the report at the conference over the first 11
months of 2021 FES revenue surpassed the yearly plan by
7% and by 21% compared to the same period in 2020. By
15 December 2021 Vietnam’s forest sector has collected
VND3,107 billion (equant to about US$140 million), of
which the Nation Fund collected VND 1,920 billion and
the provincial funds collected VND1,127 billion.
Payments by hydropower service providers accounted for
93% of the revenue with the remainder from clean water
supply, eco-tourism service and industrial production
facilities.
The increase of FES revenue comes mainly from the
enlarged supply of water for hydropower plants.As of 15
December 2021 the National FES Fund had transferred
VND1,464 billion to the local funds for distribution to
upland farmers who have been contracted to protect and
manage catchment forests.
The conference highlighted a number of difficulties and
obstacles in FES collection including the lack of banking
and post services in remote areas that have constrained the
payment to farmers through bank accounts or electronic
transactions. In addition, the COVID-19 pandemic has
also interrupted the implementation FES at all levels.
See:
https://tongcuclamnghiep.gov.vn/LamNghiep/Index/thudich-vu-moi-truong-rung-vuot-21-so-voi-nam-2020-4462
US$2.3 billion in exports of timber and non-timber
poducts
According to VNFOREST in the first 11 months of 2021
exports of timber and non-timber forest products may
reach US$14.27 billion up by 21% compared to 2020.
The total exports of timber and non-timber forest products
in 2021 will likely reach US$15.6 billion, up by 18%
compared to 2020. Of this total exports of W&WP will
reach US$14.5 billion, up by 17% compared to 2020.
The exports of non-timber forest products are estimated at
about US$1.1 billion, up by 30% and included rattan and
bamboo, US$841 million (up 38%), cinnamon and anise
products US$265.4 million (up 8%).
Vietnam’s timber and forest products are exported to over
140 countries and territories of which the main markets are
the United States, Japan, China, EU and South Korea with
a total export value estimated at US$13.98 billion or
89.5% of exports.
Exports to the US are estimated at US$9.1 billion, up by
21.4% compared to 2020, exports to Japan are estimated at
US$1.45 billion, up by 6.7% compared to 2020, exports to
China are estimated at US$1.5 billion, up by 24% over the
same period of 2020 and exports to the EU are estimated
at US1.1 billion up 14.4% compared to 2020.
The exports of wood and wood products of FDI
enterprises are estimated at US$7.38 billion, up by 21%
compared to 2020 and accounting for 47% of the export.
In 2021 Vietnam’s imports of wood and wood products
are estimated at US$2.97 billion, up 16% compared to
2020. Of this, imports of wood raw materials will reach
US$2.42 billion, up by 1%. Imports of wood products may
reach US$840.5 million, up by 400%.
The value of wood materials imported from a number of
developed countries with advanced forest governance
increased sharply. For example imports from Australia
increase by 101%, from Brazil by 96%, from Chile by
41%, from France by 28%, from Germany by 18%, from
the United States by 12.5% and from Japan by 9.7%.
See:
http://asemconnectvietnam.gov.vn/default.aspx?ZID1=8&ID1=2&ID8=113503
8. BRAZIL
“Amazônia Viva” operation combats
environmental
crimes in the Amazon
The “Amazônia Viva” operation, coordinated by the State
Secretariat of the Environment (SEMAS), is a tool to
combat environmental crimes in Pará State. The operation
is part of the Command and Control Programme, one of
the pillars of the Amazon State Plan (Plano Estadual
Amazônia Agora - PEAA).
The operation completed 18 phases, which resulted in
more than 270,000 hectares of land embargoed where
illegal deforestation was practiced and over 12,000 cu.m
of illegally logged timber being seized.
The operation works as follows: first, deforestation alerts
are detected by satellite monitoring and then verified on
the ground by SEMAS inspectors. If confirmed the forest
land is embargoed and further activity prohibited. The
embargo allows for the recovery of degraded forest.
Tropical timber logging restriction
The Rondônia State Environmental Development
Secretariat (SEDAM has prohibited logging activities
from sustainable forest management (SFM) areas between
1 January to 31 March which coincides with the rain
season in the region. Such measure will also assist the
follow-up, monitoring and control of SFM projects
approved by SEDAM.
During the restricted period there will be no issuance of
Logging Permits. Harvesting will begin again on 1 April
and run through to 31 December.
New Platform for tropical timber exports
An Administrative Ordinance No. 8 the “PAU-Brasil
Platform” (Platform of Single Consent in Brazil) published
by the Brazilian Institute for Environment and Renewable
Natural Resources IBAMA on 3 January 2022 established
a regulation on the foreign trade activities involving
products and by-products of biodiversity.
This regulation will be in effect from 25 January 2022 and
it is integrated into the control systems for the sustainable
use of biodiversity within the Single Foreign Trade Portal
(SISCOMEX) and will be operated by IBAMA. The aim
is to monitor the export of native fauna and flora products
and by-products including wood.
The analysis and issuance of IBAMA licenses for import,
export and re-export of specimens, products and byproducts
included in the CITES Appendices will be done
through the IBAMA Electronic Permit Issuance System
(SISCITES).
Timber exports increases
According to the Forest Products Trade and Transport
System (SISFLORA/MT) the consumption of wood
products from sustainably managed forests in the state of
Mato Grosso has increased by around 50% since 2020.
From 2018 to October 2021 the volume exported dropped
by 23%, from 85,183.61 cu.m to 65,096.76 cu.m but
export earnings rose despite the smaller exports volume.
According to the Center for Timber Producers and
Exporters of Mato Grosso State (CIPEM) domestic
demand for civil construction as well as increased the
demand for materials with value added have increased. In
the international market timber prices rose by around 30%
over the past 12 months.
According to CIPEM, instead of exporting primary
products such as sawnwood the domestic market demand
is for processed products such as decks, floorings,
plywood and mouldings.
Incidents of illegal logging in natural forests have been
declining in Mato Grosso from 54% in 2011 to 38% in
2020. Mato Grosso has 4.7 million hectares of forest under
SFM and the State Government aims to reach 6 million
hectares by 2030 according to CIPEM.
9. PERU
Exports of products for construction
recovering
The Extractive Industries and Services Management
Division of the Association of Exporters (ADEX) has
reported that between January and November 2021 exports
of processed wood products for the construction sector
alone totalled US$5.8 million, a significant growth of 52%
compared to the same period in 2020 (US$3.8 million) and
compared to US$6.1 million in 2019.
This is a very good performance as the forestry sector was
one of the most affected by the pandemic since harvesting
was partially halted.
The rise in shipments is explained by the higher demand in
the international markets. The US at US$3.9 million was
the main buyer increasing orders by 47%. ADEX also
reported exports to Panama (US$0.4 million), Mexico
(US$0.35 million), Chile (US$0.3 million), Bolivia
(US$0.2 million), Dominican Republic (US$0.16 million),
Spain (US$0.14 million), Germany (US$0.13 million) and
France (US$0.11 million).
Of the US$107.3 million of all wood products exported
between January and November 2021, construction wood
products ranked third behind semi-manufactured wood
products (US$63.4 million) and sawnwood. (US$28.4
million).
Other exports included furniture and parts (US$3.8
million); veneers and plywood (US$2.8 million);
manufactured products (US$1.3 million, firewood and
charcoal (US$0.7 million) and composite panels US$0.1
million).
Wood species with productive potential
A researcher at CITE Forestal Pucallpa, Kevin Rodríguez
Vásquez, pointed out that currently just five species
account for 40% of the roundwood production in Peru,
shihuahuaco, tornillo, cumala, cachimbo and copaiba. He
considers there is a diversity of timber resources with
different physical-mechanical properties that could also be
ustilsed.
CITE will join efforts of institutions such as ADEX and
PromPerú in identifying alternatives species to produce a
greater variety of wood products.
He identified alternative timbers such as cachimbo
colorado (for the manufacture of interior furniture,
decorative panels and doors), ishpingo (interior furniture
and cabinets), machimango colorado (structures, beams
and parquet), manchinga (beams, struts and sleepers),
palisangre (rustic table tops and musical instruments) and
moena amarilla (carpentry and structures).
According to figures provided by ADEX exports of wood
products between January and October 2021 barely
represented 0.7% of total non-traditional exports.
Public-private initiatives discussed
In order to be able to face the critical points to boost
economic activity in the main economic sectors several
public-private initiatives have been discussed by the
Ministry of Economy and Finance (MEF) during recent
working sessions with stakeholders.
One proposal is action to promote greater private
investment which, according to the national Forest and
Wildlife Service (Serfor), will require technological and
management improvements in the processing sectors.
Also discussed was the issue of change of land use and
ownership which requires work by Serfor and Osinfor
(Agency for the Supervision of Forest Resources and
Wildlife) as well as Sunarp the National Superintendency
of Public Registries. Through legislative action the 15%
tax applied to operations in the Amazon will now be
applied but for all national level for forestry development.
Updated analysis of the Loreto forests
Within the framework of the National Forest and Wildlife
Inventory Serfor has updated data on the forests in the
Loreto Region to promote planning for the management of
this resource. This effort will allow for regional level for
zoning and forest management, specific research and
management and production initiatives.
Serfor carried out the National Forest and Wildlife
Inventory in coordination with the forestry staff in the
Regional Government of Loreto with the support of the
Sustainable, Inclusive and Competitive Forest
Development Program in the Amazon.
