International Log & Sawnwood Prices

16 – 31th Aug  2022

1. CENTRAL AND WEST AFRICA

  Harvesting and trucking conditions good
Heavy rains continue to disrupt harvesting and milling in
Cameroon, fortunately the dry season is approaching when
mills can ramp-up production. Producers report order
levels as satisfactory for the next 2 months but face a
problem getting shipments sent.

It is not only in Cameroon that the weather is a problem, in
the DRC the trucking of logs and shipment of sawnwood
are disrupted by the rain which makes many roads
impassable. The other problem reported is that there has
been a rise in the number of illegal road blocks where
money has to be paid before trucks can proceed. The DRC
exports mainly iroko, sapelli, doussie and sawn ayous,
sapelli, sipo and moabi.

In other news, in Gabon it is reported that stocks of unsold
okoume logs in the central log park of the GSEZ special
zone has risen to about 40,000 cu.m as the Indian veneer
mills have lowered production awaiting an end to the rain
season when log prices drop as harvesting and trucking
problem ease.

Operators in Gabon continue to complain that it takes a
very long time to get documents processed by the forestry
ministry.

Invitation to join Commonwealth Organisation
Gabon and Togo are the latest countries invited to join the
Commonwealth, a little unusual as both countries are
former French colonies. Recently, Patricia Scotland,
Secretary General of the Commonwealth Secretariat held
discussions with Lee White, Gabon’s Minister of Forests,
Oceans, Environment and Climate Change.

She commented that Gabon’s forestry, marine protection,
climate mitigation and carbon-neutral policies had enabled
the country to achieve impressive milestones in
biodiversity and environmental governance.

See: https://associatestimes.com/csg-patricia-scotland-meetsforests-minister-of-gabon-prof-lee-white-cbe/

New initiative by France
In late July French President Emmanuel Macron began a
tour of Central African countries beginning with
Cameroon where he spoke of the “exceptional nature of
the friendship between our two countries”.

The purpose of the visit was reportedly to diversify
collaboration beyond infrastructure and to include
agriculture, technology, creative industries and sport.
Many in Cameroon see this visit as an attempt to counter
the influence of China who has a major presence in the
timber sector.

2. GHANA

   First half year exports
In the first half of 2022 cumulative export of wood
products amounted to 165,630 cu.m earning euro 71.61
million. This compared to 145,486 cu.m in the same
period in 2021 when euro 70.56 million was earned.
Comparative figures for various export products are
tabulated below.

Air-dried sawnwood (84,245 cu.m), kiln-dried sawnwood
(22,353 cu.m) and billets (20,535 cu.m) accounted for
51%, 13% and 12% of the total first half export volume.
The export of plywood (4,346 cu.m) and air-dried boules
(1,320cu.m) exceeded those in the first half of 2021 by a
big margin.

Plywood exports to regional markets were significant and
have been so since the beginning of 2022 with a 68%
volume increase to 18,668 cu.m in the first half of 2022
from 11,123 cu.m recorded in the previous first half year.

The total volume of the three leading products during the
period under consideration was 24,334 cu.m, representing
15% of 2022 total exports against 12,853 cu.m or 9% in
2021.The markets for these products included Senegal,
Togo, Burkina Faso, Niger, Greece and Germany with
species shipped including ceiba, gmelina and mixed red
wood.

The Timber Industry Development Division (TIDD) data
also showed that the number of exporters in the industry
increased from 89 in 2021 to 98 in the first half of 2022.

Bold measures needed to drive domestic
manufacturing
The Association of Ghana Industries (AGI)) has called on
government to take bold and decisive measures aimed at
promoting the local manufacturing of products to reverse
the current economic crisis facing the country.

This was the proposition made by the AGI President, Dr.
Humphrey Ayim-Darke, when speaking at the 5th Edition
of the Ghana Industrial Summit and Exhibition 2022, on
the theme ‘Investing in Ghanaian Industries to Leverage
opportunities in the Single African Market’.

He said investment by government in the local industries
is the surest way the country can come out of its current
challenges.

For the future Dr. Humphrey urged the government to
create a business enabling environment through dedicated
policies and programmes for businesses in the country can
thrive and expand into the AfCFTA regional and
international markets.

Minister for Trade and Industries, Alan Kyerematen,
assured the AGI of government’s efforts through its
various flagship programmes to promote the country’s
economic transformation and industrialisation.

See: https://gna.org.gh/2022/08/agi-calls-for-aggressive-localproduction-to-dampen-economic-downturn/

Ghana to start trading in AfCFTA
Ghana and seven other countries including Kenya, Egypt,
and Cameroon have agreed to begin trading under the
African Continental Free Trade Agreement (AfCFTA).
The Deputy Minister of Trade and Industry, Herbet Krapa,
disclosed this at a seminar organised by the Africa Export
and Import (Afrexim) Bank for trading companies in the
country.

In related news, the World Bank’s ‘Ghana Trade
Competitiveness Diagnostic Report to 2035”, says the
AfCFTA trade in goods and services can boost Ghana’s
real income by 5.7%. This represents around two third of
the Ghana’s AfCFTA income boost from trade facilitation
measures while reductions in Non-Tariff Barriers (NTBs)
will account for almost 2% along with reduction of tariffs.

AfCFTA represents a major opportunity for African
countries to boost growth. Some of the countries
partnering with Ghana to begin the AfCFTA trading
already import wood products such as sawnwood, sliced
veneer and plywood from Ghana.

See: https://www.myjoyonline.com/ghana-7-others-to-beginactual-trading-under-afcfta/

3. MALAYSIA

   First half 2022 exports encouraging but slower growth
anticipated
Ministry of Plantation Industries and Commodities has
released export data which shows timber sector exports
rose by 14% to RM13.2 billion between January and June
2022, against RM11.59 billion for the same period last
year.

The sector’s export value reached RM22.7 billion in 2021
with wooden furniture being the most important
component, contributing RM10.4 billion.

Malaysian wood-based furniture are exported to more than
160 countries of which the main markets are the United
States, Japan, Singapore, Australia, and the United
Kingdom. However, Malaysia’s trade performance is
showing signs of a slowdown with uncertainties in the
global economic landscape starting to take its toll.

The Borneo Post has quoted a report from the RHB
Investment Bank which says the Bank sees signs of slowdown
in the growth momentum of exports to major
economies.

The report says some global indicators point to a slower
global growth, for example, the global manufacturing PMI
has fallen to a two-year low and the official manufacturing
PMI for China has contracted steadily as the country faces
sporadic covid lockdowns.

See: https://www.theborneopost.com/2022/08/21/malaysiastrade-showing-signs-of-a-slowdown/

Issue of migrant workers wellbeing to be addressed
In a press release the Malaysian Timber Council (MTC)
has taken a step forward in addressing the risk of forced
labour in the timber sector to show its commitment
towards human rights and upholding labour standards.

A seminar on the effective management of migrant
workers, titled “Enhanced Social Compliance Practices in
Employment of Migrant Workers in the Malaysian Timber
Industry” was addresses by migrant worker rights
specialist, Andy Hall, as a keynote speaker together with
Arulkumar Singaraveloo, who is the co-founder of the
Malaysia Human Right Forum.

“The issue of migrant workers and their well-being is of
concern to the MTC said MTC CEO Muhtar Suhaili. Andy
Hall said “this seminar was an important step forward for
the Malaysian timber industry. Challenges revolving
around migrant workers welfare and prevention of forced
labour will increasingly become mandatory for doing
business globally.

See:
https://mtc.com.my/images/media/1258/Msian_Tmber_Industrys_Commitment_Towards_Better_Migrant_Workers_Managemen
t.pdf

Strengthening cooperation on SFM
The Sabah media has reported that the State government
plans to amend the Forest Enactment 1968 Act to ensure
the State’s forestry legal framework is in line with the
National Forestry Act (APN) 1984 which was passed by
the central government recently.

Sabah Chief Minister, Datuk Seri Hajiji Noor, said the
proposed amendment covers several aspects including
climate change issues, mitigation through carbon trading
and biodiversity conservation.

He said the change would strengthen cooperation between
holders of Sustainable Forest Management License
Agreements and the state government. “Amendments to
APN 1984 aim to increase protection of permanent forest
in Malaysia and have outlined strict conditions for degazetting
(changing landuse) for any permanent forest
reserves in Peninsular Malaysia.

See: https://www.thesundaily.my/local/sabah-plans-to-amendforest-enactment-hajiji-YY9717067

4.  INDONESIA

   Further decline in exports to China anticipated
Data from the ministry of forestry processed by the
Indonesian Forest Concessionaires Association
(APHI) shows log production during the first half of 2022
was stable. Timber production from natural forests was
recorded at 2.77 million cu.m, a slight decrease (2.8%)
compared to the same period last year. Production from
plantation forests was recorded at 24.9 million cu.m, also a
slight drop (5%) compared to the same period in 2021.

The overall performance of the forestry sector in the first
half of 2022 was positive. However, a decline in exports to
China needs watching as China is one of the largest
markets for Indonesian wood products.

Exports of wood products in the first half of this year
reached US$8.35 billion, an increase of 12% compared to
the same period in 2021. When compared to total exports
in 2021, which amounted to US$13.57 billion, first half
exports were over 60% of the previous yearly total.

The three main wood products that recorded most growth
were paper, pulp and wood panels with a value of
US$2.43 billion, US$1.94 billion and US$1.91 billion
respectively.

The export performance achieved was due to the growing
demand in some of the main destination countries.
However, exports to the largest markets, China, declined
in the firs half of this year.

Indonesia's wood product exports to China in January-July
2022 were recorded at US$1.78 billion, down 18.5%
compared to the same period in 2021. Data from the
National Bureau of Statistics (NBS) of China showed that
China's economic growth slowed in the second quarter of
2022.

Indonesian enterprises are beginning to diversify markets
so not to be dependent on only one country. In the first
half of 2022 the value of Indonesia's overall exports to
China was US$28.94 billion, equivalent to 21% of the
total value of all Indonesian exports. For wood products
China is the main market ahead of Japan and the US.

See: https://forestinsights.id/2022/08/15/kinerja-ekspor-kayumasih-bagus-situasi-ekonomi-china-mesti-diwaspadai/

Domestic furniture and craft industry face many
challenges
The Minister of Industry, Agus Gumiwang Kartasasmita,
said the domestic furniture and craft industries are facing a
variety of challenges which the government hopes to
address.

First, the Covid-19 pandemic, which was followed by
Russia’s invasion of Ukraine has caused logistical and
shipping problems. The scarcity of containers and
shipping opportunities are still big issues.

Second, he said the invasion has also caused a market
shock, which, with rising inflation in the main markets,
has created a domino effect in the form of cancellations
and delays of orders, especially from European countries
and the United States.

Third, domestic problems related to the availability of raw
materials continue. Securing raw materials needed by the
furniture industry is now a challenge.

Fourth, technological upgrades in the national furniture
and craft industry have not advanced fast enough largely
because of cost which SMEs cannot bear.

Fifth, the issue of the implementation of the mandatory
Timber Legality Verification System (SVLK). SVLK is
intended to maintain the sustainability and traceability in
wood products. Agus explained that currently the
sustainability and traceability aspects get great attention
and have even become a requirement in the global market.

However, implementation of the SVLK in the downstream
industry is not seen relevant and it creates a high cost for
the furniture and craft industry.

See: https://www.idxchannel.com/economics/menperin-sebutindustri-furnitur-dan-kerajinan-dalam-negeri-masih-menghadapibanyak-tantangan

In related news, the Minister of Industry has said that he
will support efforts to achieve furniture and handicraft
exports of US$5 billion in 2024 by working closely with
the Indonesian Furniture and Handicraft Industry
Association. He is optimistic that the target can be
achieved considering that exports of the furniture industry
in 2021 reached US$2.5 billion, up 33% compared to the
previous year.

See:
https://en.antaranews.com/news/245181/minister-to-supportachievement-of-us5-bln-furniture-export-target

Raising profile of domestic furniture in the local
market
To strengthen domestic demand for furuniture the
government will support furniture and handicraft
businesses by intensifying the absorption of domestic
furniture products according to the Minister of Industry.
He said this when opening the 2022 Indonesian Furniture
Exhibition at JIExpo Kemayoran.

He pointed out that businesses should pay special attention
to the domestic component level (TKDN) certification so
that they can sell their products through the e-catalog of
the Government Goods/Services Procurement Policy
Institute (LKPP). The government, on its part, will
continue to improve services for domestic businesses by
limiting imported products that compete with local
products. The Ministry of Industry will also offer a free
domestic component level (TKDN) certification program,
especially for small and medium-sized furniture and
handicraft industries.

See: https://en.antaranews.com/news/245189/ministry-tointensify-absorption-of-domestic-furniture-products?amp

Forestry sector investment featured in speech by
President
President Joko Widodo's State Speech, welcoming the
77th Indonesian Independence Day emphasised the
downstream industrialisation process in Indonesia as well
as the ongoing energy transition in order to reduce carbon
emissions. In addition to non-renewable natural resources,
such as minerals and oil and gas, the process of
downstreaming the forestry industry, which is a renewable
industry, has also been accelerated recently.

From only exporting raw materials from natural forests in
the 1970s the forestry sector expanded investment in
down-stream industries in the 1980s, especially plywood.
The Indonesian forest industry is now moving towards the
plantation forest industry producing downstream raw
materials.

President Jokowi assessed that the upstream-downstreamprocess
in the forestry sector is continuing. On the
upstream side, a barcode system has been implemented for
forest inventory which is entered into the Forest Product
Administration Information System (SIPUHH).

In order to ensure the entry of Indonesian legal timber into
the export market, the Timber Legality and Sustainability
Verification System (SVLK) is implemented. All of them
apply digital technology 4.0. In 2021, Indonesia's
upstream-downstream forestry product exports have
reached US$13.5 billion, the highest ever for the
Indonesian forestry sector.

Forest industry investment is projected to continue to
include biomass for energy power plants of 7 MW as well
as plans for the development of a modern forest industry
ecosystem in the Special Economic Zone (SEZ) in Maloy,
East Kalimantan, which will invest up to US$ 5 billion for
next 10 years.

The SEZ will produce Oriented Strand Board (OSB),
laminated veneer lumber (LVL), Cross Laminated Timber
(CLT), Glulelam timber (GLT) as well as processing palm
oil for oleo-chemical products for the manufacture of glue
and coating for wood products.

See:https://investor.id/business/303783/industri-kehutananindonesia-terus-bertransformasi

and
https://agroindonesia.co.id/jokowi-tekankan-soal-hilirisasi-sdabagaimana-kondisi-di-sektor-kehutanan/

and
https://setkab.go.id/pidato-presiden-ri-pada-sidang-tahunan-mprri-dan-sidang-bersama-dpr-ri-dan-dpd-ri-dalam-rangka-hut-ke-77-proklamasi-kemerdekaan-ri/

5. MYANMAR

   MTE - back to bidding in US dollars
According to the local media the MTE is quoted as
announcing that the US dollar will be the currency for log
tender sales, this comes after the Kyat (MMK) was used
for about two months.

After the Central Bank required all incoming foreign
exchange earnings to be converted to MMK within one
day in April MTE had changed the currency for business
from US dollars to MMK in June 2022. This has now been
reversed it appears.

It has been learnt that 701 tons of teak logs have been put
up for tender in this month. The MTE postponed log
extraction during fiscal 2022-23 but will resume in 2023-
24 with the extraction target of 6,000 tons of teak and
200,000 tons of other hardwoods.

After a meeting of the Committee for the Development of
Wood-based Industries chaired by the Minister for Natural
Resources and Environmental Conservation on 16 August
it was reported by the local media that for the conservation
of the forest harvesting will only be done to meet the
needs of added value product manufacturers and the
export of sawnwood will be banned at the end of 2022
with only semi-finished and finished products allowed for
export.

See:
https://www.facebook.com/BETVBusiness/photos/a.394304474394253/1405795429911814/

and
https://www.facebook.com/messenger_media/?thread_id=100009125575628&attachment_id=1286740638727769&message_id=mid.%24cAAAABpT93R-I3KVuB2Cq1-3rl8Vg)

Natural gas exports earn US$800 million
The export of natural gas from Myanmar to neighbouring
countries such as China and Thailand earned over US$800
million during the four months of this financial year
according to the Ministry of Commerce.

Natural gas was exported mainly by the four offshore
natural gas production projects which are Yadana,
Yedagun, Shwe and Zawtika natural gas production
projects.

During the six months of the 2021-2022 financial year
from October to March (mini-budget period), more than
US$1,715 million were collected from natural gas exports
and the monthly export was the highest in November,
according to the Ministry of Planning and Finance.

See: https://www.gnlm.com.mm/natural-gas-export-bags-overus800-million-from-april-to-july/#article-title

In related news, many Civil Society Organisations have
asked the US government to declare sanction against the
Myanmar Oil and Gas Enterprise as EU did in the
beginning of this year.

Fuel prices continue to rise
Fuel prices have increased after the exchange rate
adjustments by the Central Bank. On 5 August the Central
Bank increased the rate of exchange to 2,100 kyats per US
dollar, the first change after more than four months. It is
also learnt that fuel importers are not able to buy US dollar
to make payments at the fixed rate of 2100 MMKs and are
forced to pay the informal rate at 2700-2800 MMK.

Major-General Zaw Min Tun, spokesperson for the State
Administration Council, said about 1.3 million gallons of
fuel are set to be unloaded at the Thilawa Port. It is
reported that Myanmar is planning to buy fuel oil from
Russia.

https://elevenmyanmar.com/news/fuel-and-diesel-pricescontinue-to-higher

Myanmar deeply affected by job losses
The International Labour Organisation (ILO) says that
Myanmar is still deeply affected by job losses 18 months
after the military takeover and two and a half years since
the start of the COVID 19 pandemic. The ILO estimates
that 1.1 million fewer women and men were employed
since 2020 in an updated estimate that indicates a small
recovery in jobs but well below 2020 levels.

Labour productivity contracted by nearly 8% in 2021 and
a further 2% in up to June 2022 reversing the strong gains
that had been made in previous years prior to the military
takeover

See: https://myanmar.un.org/sites/default/files/2022-08/ILO%20Brief%20Myanmar%20FINAL.pdf

and
https://www.mizzima.com/article/ilo-myanmar-still-deeplyaffected-job-losses

6. INDIA

  Economic activity is slowing
The president of the Federation of Indian Export
Organisations (FIEO) has said the export sector is doing
well given the current tough trading conditions including
measures to address inflation and the disruption of supply
chains due to Covid and the Russia invasion of Ukraine.

However, high-frequency indicators for July suggest that
India’s economic activity is slowing with most showing a
decline from the previous month. Adding to the rather
pessimistic outlook is a recent surge in covid infections.

See: https://www.financialexpress.com/economy/indiaseconomic-engine-losing-steam-most-activity-indicators-showweak-sequential-performance/2635906/

MDF supply/demand imbalance
Ply Reporter has identified that supplies of MDF in the
domestic market have increased but there has not been a
corresponding increase in consumption.

It was noted the increase in supply has held down prices.
This is of concern as manufacturers face rising costs of
raw materials. One reason for the increased supply is
expanded capacities by major producers and output from
new small plants.

See:
https://www.plyreporter.com/article/93091/mdf-segmentwitnesses-increasing-supplies

Cost C&F Indian ports in USA $ with freight on Hoppus
measure

Housing sales growth mainly in upper market segment
India's residential market is expected to sustain growth
despite the rise in mortgage rates and property prices and
sales this year in the top 7 cities are likely to regain prepandemic
levels.

The real estate sector has weathered four major challenges
in recent years, demonetisation, the real estate regulation
Act (RERA), GST and Covid which have forced structural
changes in the sector which it is thought is now beginning
a long-term upward trend.

A revival in demand, along with the rise in construction
costs, led to a 5% average increase in residential property
prices in eight major cities in the second quarter 2022
according to a report with 'Housing Price-Tracker Report
2022' from consultants to Confederation of Real Estate
Developers' Associations of India (Credai), Colliers India
and Liases Foras.

See: https://www.business-standard.com/article/economypolicy/2022-housing-sales-to-breach-pre-covid-levels-despiterate-hikes-industry-122082100355_1.html

and
See: https://www.colliers.com/en-in/news/press-release-housingprice-tracker-report-2022

The media has reported all major listed real
estate developers posted record sales in the last fiscal year
and have indicated sales in fiscal 2023 could be even
better. However, the sales growth is mostly in the upper
market segment. Interest rate rises are being passed on to
homebuyers which has slowed sales in the middle income
segment of the market.

7. VIETNAM

  Wood exporters urged to prepare for increased trade
investigations
Experts have urged wood exporters to diversify markets,
standardise supply chains and be well equipped with trade
defense knowledge in the face of increasing trade
protectionism.

According to the Việt Nam Administration of Forestry, the
stronger the wood export, the higher the risk the wood
industry faced with trade defense lawsuits.

Ngô Sỹ Hoài, Vice President of the Việt Nam Timber and
Forest Product Association, said that the wood exports of
Việt Nam increased sharply in recent years. Việt Nam was
currently the fifth largest wood exporter in the world, Hoài
said, adding that together with the trend of trade
liberalisation with several free trade agreements (FTAs)
Việt Nam signed, other countries were increasing trade
protection measures against Việt Nam.

Besides the imposition of anti-dumping and anti-subsidy
duties, Việt Nam faced other risks, including
US investigations into illegal logging and timber trading.

Nguyễn Thị Thu Trang, Director of the WTO and
Integration Centre under the Việt Nam Chamber of
Commerce and Industry said that the US was the market
where Vietnamese products faced a high risk of
trade lawsuits, citing statistics that the US initiated 1,159
out of 7,528 trade remedy investigations globally in 1995-
2021. However, enterprises were not well prepared in
terms of knowledge about trade remedies and resources to
deal with investigations.

The trend for investigation was becoming increasingly
intensive and rigorous, Chu Thắng Trung, Deputy Director
of the Ministry of Industry and Trade Remedies Authority
of Việt Nam, said.

Trung said that trade defense was an inevitable trend of
the integration process. This also demonstrated that the
production and export capacity of the Vietnamese
economy was developing and competitive enough to put
pressure on the domestic industries of the importing
countries, forcing the application of trade remedies to
protect domestic industries, he said.

Trung said it was also important that enterprises strictly
abide by the laws in production and business and not
participate in acts of origin fraud or illegal trans-shipment.
If fraud or illegal trans-shipment were detected, the
importing country could apply heavy sanctions and
enterprises could lose their markets. Trung added that
enterprises should also focus on developing the domestic
production chain and the origin traceability system, which
was a sustainable development direction to reduce the risk
of being investigated. — VNS

See:
https://www.chanchao.com.tw/vietnamwood/newsDetail.asp?serno=3986

Vietnam’s wood, wood product exports slow down in
two consecutive months
From April 2022 exports of wood and wood products
showed signs of slowing down. Between June and July
2022 the growth was negative compared to the same
period last year when it decreased by 11% and 5.5%
respectively after a long period of growth above doubledigit
average per year.

This information was provided during a conference at the
Vietnam International Furniture & Home Accessories Fair
(VIFA-EXPO).

Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi
Minh City Handicraft and Wood Industry Association
(HAWA) pointed out the main reason that the key export
markets such as the US and Europe are facing many
difficulties due to the impact of the conflict between
Russia and Ukraine. Plus, high inflation in many countries
has made consumers tighten their spending, leading to a
decrease in demand for unnecessary products including
wood products and furniture.

Mr. Phuong, said another reason is that the world's
importers have not calculated correctly, so, over the past
time, commodity congestion with a large amount is at
warehouses and ports abroad and in Vietnam. It takes
three or four months even 12 months to tackle the
inventory of commodities.The Ministry of Agriculture and
Rural Development announced that China - one of the
three largest importers of wooden furniture products in
Vietnam - still thoroughly applied the Zero Covid policy.

These factors interacting with each other reasons have led
to supply chain disruptions, increased production costs due
to increased raw materials, and transportation costs.

According to HAWA, the market also has positive signals.
Many domestic construction projects are starting well.
Furthermore, Japan, Korea, and Australia have still placed
stable orders in the luxury segment. In addition, from next
September, there will be new orders for the year-end
shopping season around the world.

See: https://www.sggpnews.org.vn/business/vietnams-woodwood-product-exports-slow-down-in-two-consecutive-months-101476.html

Falling international demand could be a game-changer
in Vietnam
Kerstin Canby and Phuc Xuan To have raised the question
will Vietnam’s declining exports efforts to ensure legal
sourcing of its timber imports? Since the beginning of
2022 exports are down significantly with a 38% year-onyear
decline in June and a continued drop by 5.5% in July.

Forest Trends supported a Vietnam Timber and Forest
Products Association (Vifores) survey of 52 timber
companies and found that most reported lower revenues
with most expecting international orders to continue to
decline throughout this year. In all international markets
high inflation and interest rates have reduced demand and
increased freight costs have driven up logistic costs.

The key question asked by the authors is whether the
strictly regulated markets of the EU, UK, and US will lose
importance for Vietnamese exports. If this is the case
could this undermine incentive for Vietnamese industry to
ensure legality of its imports.

See: https://www.forest-trends.org/blog/vietnamesetimber-exports-to-the-us-eu-and-uk-are-dropping/

Institutions and policies being readied for the VPA
The Centre for Sustainable Rural Development (SRD) and
the Vietnam Administration of Forestry co-organised a
forum on sustainable forest governance and timber trade
monitoring. This forum was part of the project “Promoting
forest governance and legal timber trade through the EU –
Vietnam Free Trade Agreement (EVFTA)” funded by the
EU.

It is one of the annual activities aiming to promote the
efficiency of forest governance and review the
implementation of the Voluntary Partnership Agreement
(VPA) on Forest Law Enforcement, Governance and
Trade FLEGT) and the EVFTA.

Dr. Nguyen Phu Hung, Deputy Director of the SRD under
the Vietnam Union of Science and Technology
Associations (VUSTA) said Vietnam has been perfecting
institutions and policies to realise the VPA.

Associate Prof. Nguyen Ba Ngai from the Vietnam Forest
Owner Association proposed the State offer preferential
policies and support enterprises in land, credit, tax,
infrastructure, market and production capacity
development. Other participants suggested solutions
relating to management work, and the improvement of
domestic materials, technologies and production.

According to Nguyen Van Dien, Director of the Forestry
Production Development, a total of 372,140 hectares of
forest in 31 Provinces and Cities have been granted
sustainable forest certificates.

According to the Ministry of Agriculture and Rural
Development, forest cover in Vietnam extended to 42.02%
of the total land area at the end of 2021. Vietnam had
14,745,201 ha. of forest area, of which 10,171,757 ha. are
natural forests and 4,573,444 ha. are planted forest along
with open canopy forests as of December 1, 2021,

See: https://en.vietnamplus.vn/forum-highlights-sustainableforest-governance-timber-trade-itoring/236057.vnp

8. BRAZIL

  Sustainable Management Plans in the Amazon
The Brazilian Institute of Environment and Renewable
Natural Resources (IBAMA) approved the first
Sustainable Forest Management Plan (SFMP) for the
National Forest (FLONA) in the state of Amapá, part of
the Amazon biome.

Logging will employ reduced impact logging techniques
with the objective of extracting logs and forest residues
thus enabling the sustainable use of natural resources and
bringing social and economic benefits to the state.

The management plan covers 39,300 hectares of Amazon
rainforest to be logged under a forest concession regime.
Another SFM plan in the same FLONA over 110,700
hectares is under consideration by IBAMA. With the
addition of the area in FLONA, IBAMA now has more
than 1.0 million hectares of concession management under
its responsibility.

An assessment based on data from SINAFLOR (National
System for Control of the Origin of Forest Products)/ DOF
(Forest Origin Document) indicates that in 2022 15
Annual Operational Plans (POA) were approved by
IBAMA over a total area of 33,200 hectares and
production of more than 635,000 cubic metres of logs
(approx. 19 cu.m/hectare was approved).

See: https://www.gov.br/ibama/ptbr/assuntos/noticias/2022/ibama-aprova-plano-de-manejoflorestal-sustentavel-inedito-em-flona-no-amapa

Furniture sector feels impact of global instability
The current global economic instability, aggravated by the
Russian invasion of in Ukraine, in addition to high
inflation and interest rates in the domestic market has
impacted the furniture industry in Bento Gonçalves
municipality in the southern region of the country.

The State Department of Finance (SEFAZ) has said the
turnover of furniture companies located in Bento
Gonçalves and the region showed a small decline in the
first half of 2022 totalling about R$1.5 billion. According
to Sindmóveis (Bento Gonçalves Furniture Industry
Union) the drop is the result of a combination of factors
such as difficulties created by the pandemic in the supply
of raw materials and logistics in addition to the impact of
high inflation, high interest rates, reduced purchasing
power and weakness in the world economy.

There was a sharp decline in furniture exports from the
Bento Gonçalves cluster. In the first six months of 2022
the companies in the region transacted sales worth
US$27.3 million, a 21% decline, compared to the same
period of the previous year (US$34. 5 million).

See: https://www.sindmoveis.com.br/polo-moveleiro-de-bentosente-impactos-da-crise/

In related news, the Rio Grande do Sul state furniture
sector, one of the largest in the country, ended 2021 with
revenues of R$11.2 billion, generation of 2,623 jobs and
US$293 million in business transactions in foreign
markets however the sector is seriously affected by the
current global economic instability.

Between January to June 2022 sales were positive,
growing 5% compared to the same period in 2021 and
totalled R$5.4 billion, however, exports suffered. In the
first six months of 2022, furniture sales from makers in
Rio Grande do Sul transacted US$126.8 million, a drop of
over 5%.

Despite the decline in sales about 200 new jobs were
generated and the Association of Furniture Industries of
the State of Rio Grande do Sul considers that, in general,
the current situation is not negative but neutral.

See: https://emobile.com.br/site/industria/mesmo-com-acrise-setor-moveleiro-gaucho-se-mantem-estavel/

Export update
In July 2022 Brazilian exports of wood-based products
(except pulp and paper) dropped 7.5% in value compared
to July 2021, from US$465.6 million to US$430.8 million.

Pine sawnwood exports grew 23% in value between July
2021 (US$73.7 million) and July 2022 (US$90.6 million).
In volume, exports increased 7% over the same period,
from 286,100 cu.m to 305,800 cu.m.

Tropical sawnwood exports increased 10% in volume,
from 41,200 cu.m in July 2021 to 45,500 cu.m in July
2022. In value, exports grew 35% from US$15.0 million
to US$20.3 million over the same period.

Pine plywood exports saw a huge 60% decline in value in
July 2022 compared to July 2021, from US$159.9 million
to US$64.4 million. In volume terms exports also fell
almost 40% over the same period, from 255,800 cu.m to
156,100 cu.m.

As for tropical plywood, the volume of exports fell around
20% and in value by 10% from 7,300 cu.m (US$4.2
million) in July 2021 to 5,900 cu.m (US$3.8 million) in
July 2022.

As for wooden furniture the exported value fell from
US$71.7 million in July 2021 to US$58.1 million in July
2022, a 19% fall.

More than U$35 million transacted in trade mission
In early August 2022 there was a Trade Mission to Peru
and the region organised by the Brazilian Furniture
Sectoral Project, an initiative of ABIMÓVEL (Brazilian
Association of Furniture Industries) and ApexBrasil
(Brazilian Trade and Investment Promotion Agency).

The Project aims to increase the participation of the
Brazilian industry in the international market through a set
of strategic actions based on the pillars of sustainability,
competitiveness and design integrated to the industry,
aimed at the global market.

Thirty-five Brazilian companies participated in the recent
mission and were able to negotiate directly with 24 buyers
from several countries in the region: Peru, Colombia,
Chile, Costa Rica, Nicaragua, Ecuador, Panama, Uruguay,
Dominican Republic and Bolivia.

As a result, more than US$35 million in business
transactions: US$4.1 million in immediate business orders
and US$31.5 million prospective orders were secured.

Brazil is second only to China as a supplier of furniture
and mattresses to Peru with a share that, last year, was
close to 24% of the total.

See: http://abimovel.com/brazilian-furniture-missao-comercialperu-e-regiao-movimenta-mais-de-us357-milhoes-em-negocios/

9. PERU

  Full potential of Peruvian forests yet to be recognised
The export of wood products in the first half of the year
(US$75.9 million) showed a growth of 34% compared to
the same period in 2021 (US$56.7 million) and 101% and
24.5% compared to 2020 and 2019 (January-June)
according to the Management of Services and Extractive
Industries unit of the Association of Exporters (ADEX).

However, Lucía Rodríguez Zunino from ADEX said,
when speaking to the weekly newsletter Perú Exporta, the
full potential of Peruvian forests is still not recognised and
this leads to deforestation through shifting agriculture,
illegal mining and illicit coca cultivation.

She added that, according to satellite monitoring carried
out by the Ministry of the Environment (Minam) in 2020,
deforestation reached 203,272 hectares, the highest figure
in the last 20 years.

Due to this situation and Covid-19, which had an
unprecedented impact affecting everyone, it is necessary
to take action to promote productive conservation based
on responsible and sustainable use of forests including the
implementation of new processes for forest concessions
for commercial purposes.

In the first half of 2022 exports totaled US$75.9 million of
which semi-manufactured products were the most
important at US$39.1 million. Second was sawnwood
(US$26.3 million +90% up year on year) and representing
35% of the total. Furniture and parts (US$2.4 million),
construction products (US$.3 million), firewood and
charcoal (US$2.1 million), veneered and plywood (US$
1.6 million), manufactured products (US$1.4 million)
made up the balance.

See: https://www.adexperu.org.pe/wpcontent/uploads/2022/08/boletin_semanal_peru_exporta_n454.pdf

88,000 hectares of forest plantations
The National Forest and Wildlife Service (Serfor)
announced that there is a total of 88,944 hectares of
registered forest plantations in the country. The
Departments with the most are Huánuco, Loreto,
Amazonas and Cusco.

Forest plantations on private land must be registered
within three years of planting and may be plantations for
timber production or non-commercial use such as for
protection, recovery or restoration of ecosystems.

See: https://sniffs.serfor.gob.pe/inicio/

Forest management training in indigenous languages
Through the Intercultural Program for the Training of
Trainers in Community Forest Management the Serfor)
trained more than 250 leaders in indigenous languages
from 18 communities in the Provinces of Coronel Portillo
and Atalaya in the Department from Ucayali.

The training was carried out by 33 indigenous trainers
from the Shipibo-konibo, Ashaninka, Asheninka, Yine and
Amawaka peoples who were the first Forest Guides or
native trainers trained last year.

This programme is implemented in coordination with the
regional indigenous organisations of the Interethnic
Association for the Development of the Peruvian Jungle
(AIDESEP) Ucayali-ORAU, Regional Coordinator of
Indigenous Peoples AIDESEP Atalaya – CORPIAA and
the Regional Union of Amazonian Indigenous Peoples of
the Province of Watchtower – URPIA.

The training topics included forest management, forest
harvesting permits, traceability and quantification of
wood, wildlife management, community management and
surveillance and laws and regulations.

The training was financed by the International Climate
Initiative Fund of the German government. In addition the
programme had the support of institutions such as Osinfor
and the Regional Forestry and Wildlife Management of
Ucayali and cooperating institutions such as WWF, GIZ,
the FOREST programme of USAID and the US Forest
Service (USFS).

Serfor seeks to replicate the program in more regions of
the country and progress has been made in the regions of
Junín, Loreto and Madre de Dios and it is expected that
this work will continue in 2023.