International Log & Sawnwood Prices

01 – 15th Sep  2022

1. CENTRAL AND WEST AFRICA

  Demand in China slows
The economic slowdown in China is impacting trade and
producers report a noticeable drop in orders for okoume
and some redwoods. It is reported that interest in
ovangkol, belli and okan is steady but species such as
dabema are not attracting interest at present.

With fewer shipments to China the container availability
has improved and it is no longer necessary to pay
premiums to obtain containers.

The container shortage appears to be easing and prices
have been dropping. Drewry. an independent maritime
research consultancy firm, has said “In the first eight
months of the year manufacturers based in China, which
account for over 96% of global container output, produced
close to half a million teu, which was up almost 64% year
on year and 35% up on the corresponding period in 2020.
Drewry expects output for the full year to total at least
900,000 teu, up from just below 560,000 teu in 2021.

See: https://www.joc.com/maritime-news/containerlines/drewry-projects-adequate-ocean-container-availabilitythrough-mid-2023_20220906.html

As mills cut back on milling for the Chinese market and
even the Middle East markets demand in the Philippines is
said to be holding up. Demand in the EU and UK is also
reported as steady so far. News is circulating that stocks of
azobe are high in the Netherlands and that some timber
shipments were diverted from Antwerp to Amsterdam.

Police commader warns on unauthorised road checks
Lenouveaugabon recently carried a story on
‘unauthorised’ road blocks in Gabon. Following numerous
complaints of cases of corruption the Commander-in-
Chief of the National Police Force, Serge Hervé Ngoma,
issued a warning to police officers saying "all police
officers are reminded that untimely roadside checks are
prohibited throughout the national territory ".

He added, any police officer ignoring this instruction will
be immediately presented before an extraordinary council
which will rule on his dismissal.

See: https://www.lenouveaugabon.com/fr/securite-justice/0809-18887-forces-de-police-les-controles-routiers-interdits-sur-letendue-du-territoire-gabonais

October and November brings heavy rain to the CAR but
there are reports that the weather has deteriorated already.
In Cameroon operators are preparing for the bad wether
expected towards year end. When the weather allows
forest managers undertake marking trees and taking GPS
readings to input information into their operation maps.

Correction
Under the headline ‘Harvesting and trucking conditions good’ in
the previous report export species from the DRC were
mentioned. The text should have said the Central African
Republic not the DRC.

2. GHANA

   Added value product exports register growth
According to export data from the Timber Industry
Development Division (TIDD) of the Forestry
Commission 10 products totalling 165,630 cu.m were
exported during the period January to June 2022. Of this
volume Primary, Secondary and Tertiary Products
accounted for 12% (20,535cu.m), 85% (140,540cu.m) and
3% (4,555cu.m) respectively.The export volume for the
first half of 2021 was 145,441 cu.m.

The following tables show product volumes and values for
2022 compared to 2021.

Secondary Wood Product (SWP) amounted to 140,540
cu.m in the first half of 2022 as against 113,304 cu.m in
2021, a growth of 24% while primary and trtiary export
volumes declined (-24% and -12%).

The table beow shows export earnings for primary,
secondary and tertiary products. Exports of SWP
registered a 9% growth while the others dipped.

For the period under review primary product exports,
mainly billets, accounted for 12% (20,535cu.m) and
earned Euro 6.37 million, around 9% of total exports.
Earnings for primary products dropped compared to a year
earlier.

Exports of SWPs for the period comprised sawnwood,
plywood, veneer, boules and briquettes. These, altogether,
contributed 140,540 cu.m, representing 85% of total
exports during the first half of 2022. The corresponding
earnings were Euro 61.80 million or 86% of total export
receipts.

These figures also showed increases of 9% and 244% in
value and volume respectively, compared to the SWP
export contribution of Euro 56.58 mllion (80%) and
113,304 cu.m (78%) registered from the period of January
to June 2021.

Ghana to boost country’s teak industry
Samuel Abu Jinapor, Minister of Lands and Natural
Resources (MLNR), has said Ghana is seeking to explore
and develop new strategies and initiatives to boost its teak
production so as to become a leading teak producing
country.

The Minister made the statement when Ghana hosted the
4th World Teak Conference (WTC) which called on
participating countries to facilitate the availability of
superior planting materials to private companies and local
communities to improve the planted teak forest.

The meeting also called on governments to commit more
resources to research and development to advance the
sustainable management of the planted teak forest.

A total 273 delegates attended the conference from 28
countries across five continents on the theme: 'Global
Teak Market: Challenges and Opportunities for Emerging
Markets and Developing Economies'. The biennial event
was organised by the International Teak Network
(TEAKNET), in collaboration with Forestry Commission
of Ghana with support from the International Tropical
Timber Organisation (ITTO) and other international
organisations.

Ghana has an estimated 200,000 ha. of teak plantations.
Approximate 5.2 million out of 26 million tree seedlings
distributed during the 2022 ‘Green Ghana Day’ initiative
were teak seedlings. Plantations are developed to enhance
transparency, efficiency and legality in timber traded from
Ghana.

Teak is a leading species for the production of air- and
kiln-dried sawnwood, billets, sliced veneer and plywood
for the country’s major markets.

See: https://thebftonline.com/2022/09/07/ghana-targets-numberone-spot-in-global-teak-production/

Bank and Chamber of Commerce to support SMEs
The new Development Bank Ghana (DBG), in partnership
with the Ghana National Chamber of Commerce and
Industry (GNCCI), is undertaking the first phase of a
capacity-building workshop targeting 1,000 SMEs
throughout the country. This initiative forms part of
DBG’s commitment to foster strong partnerships to build
capacity for SMEs, with 100 workers or less which
struggle to secure finance.

The initiative is designed to build knowledge on the
various business areas that will enhance SMEs ability to
access funding from DBG’s partner financial institutions
(PFIs) as well as build sustainable businesses. The Bank
aims to lend US$600 million to small businesses over the
next one to two years.

The DBG partnership is timely as most woodcraft artisans
need funding to boost their businesses and begin
exporting.

See: https://www.myjoyonline.com/development-bank-ghanagncci-undertake-capacity-building-workshop-for-1000-smes/

3. MALAYSIA

   MTIB DG optimistic on prospects for furniture industry
Malaysia’s wood product exports rose year on year around
14% in the first six months of this year helped by the
reopening of the economy post-pandemic. MTIB Director
General, Kamaruzaman Othman, said he is cautiously
optimistic on prospects for the furniture industry this year
but he remains cautious of challenges such as raw material
availability and the worker shortage faced by the industry.

See: https//www.thesundaily.my/home/malaysia-s-timberexports-in-first-half-2022-climb-to-rm132b-KA9662279

Third consecutive interest rate increase
Bank Negara Malaysia (the central bank) has raised the
overnight policy rate to 2.5% in line with expectations for
further normalisation of monetary policy as the country’s
economic growth and inflation gain momentum. This is
the third consecutive increase this year and was in line
with expectations.

The Bank indicated “with the positive growth prospects
for the Malaysian economy remaining intact it was
decided that monetary policy should remain
accommodative and supportive of economic growth”. The
rate rise came as Malaysia’s GDP outlook continues to
improve.

The value of Malaysia’s manufacturing sales in July 2022
grew by almost 24% to RM148.4 billion driven by the
electrical goods (+6.7%), wood, furniture, paper products
and printing (+5.1%) and transport equipment and other
manufacture products (+5.7).

See: https://www.theedgemarkets.com/article/bank-negararaises-opr-25bps-25-expected

and
https://www.theedgemarkets.com/article/july-manufacturingsales-value-238-rm1484b-%E2%80%94-dosm

Fast growing eucalyptus
Malaysian Timber Council (MTC) and Malaysian
Plywood Manufacturers Association (MPMA) will
develop eucalyptus community plantations. Plantation
Industries and Commodities Minister, Zuraida
Kamaruddin, said the community farm forests concept is
practised in many countries and has a place in Malaysia as
local communities can earn a good income.

There is a pilot project for the programme comprising 101
ha. involving 78 villagers in Batu Kikir. It is expected that
every 0.4 ha. can support 600 eucalyptus trees which can
be harvested in six years.

Novel online furniture sales
Selling furniture online may not be novel but one
Malaysian company has an interesting and unique selling
idea. The shift to the online shopping got a boost during
the pandemic and this, along with a rise in direct-tocustomer
models, a new approach was crafted. The
company provides a wide range of furniture designs. By
combing 3D visualisation and AI customers are able to
view a wide selection of furniture in a home setting.

See:
https://www.thestar.com.my/business/smebiz/2022/08/27/furniture-sold-online-with-a-twist

4.  INDONESIA

   Positive export trend despite downturn in China
Indonesia's wood product exports continue to grow even
though the Chinese market is currently weakening due to
the country's economic slowdown.

Based on data from the Ministry of Environment and
Forestry (KLHK) which was processed by the Association
of Indonesia Forest Concession Holders (APHI), as of 7
September 2022 exports of wood products during January-
August 2022 reached US$9.75 billion dollars. That is an
increase of 14% compared to the same period in 2021.

The value of exports up to August 2022 was 72% of the
total value of wood product exports in 2021. Exports of
furniture products also increased and were recorded at
US$1.68 billion, up 28% compared to last year.

Wood product exports to China fell 17% to US$2.08
billions from the previous US$2.51 billion dollars in
January-August 2021. The economic slowdown is not only
affecting China, a number of other countries, which are
main markets for Indonesian wood products, are being
impacted. However, exports to the United States rose 15%
to US$1.63 billion and exports to the European Union +
the UK rose to US$868.4 million dollars, a 17% increase.

The Director General of Sustainable Forest Management
at the Ministry of Environment and Forestry (KLHK),
Agus Justianto, said that, although the China market
experienced a slight slowdown, he was optimistic that the
positive trend in exports of wood products could be
maintained. According to Agus, the Russia-Ukraine crisis
has had an impact on global trade. However, for
Indonesian wood products the crisis has had little impact
so far and the trade restrictions on Russia created new
opportunities for Indonesian wood products.

See: https://forestinsights.id/2022/09/08/meski-pasar-chinamelemah-ekspor-kayu-indonesia-lanjutkan-tren-positif/

Benchmark prices for wood products
The government changed the Export Benchmark Price
(HPE) for wood products which took effect in September
2022. This HPE change is contained in the Decree of the
Minister of Trade No. 1206 of 2022 which was issued on
August 30, 2022.

"For wood products, there are several changes of the
HPE," said a press release from the Ministry of Trade,
Thursday, September 1, 2022. Meanwhile, the Export
Duty for wood products has not changed.

The following are the HPE for wood products that are
valid from September 1 to September 30, 2022.

Veneers
Natural Forest Veneer US$850/cu.m, Plantation Forest
Veneer US$550/cu.m, Wooden Sheets US$850/cu.m.

Chipwood
Chipwood in the form of particles US$80/tonne,
Chipwood US$90/tonne (up from previous US$65/tonne).

Processed Wood
Processed wood products which are leveled on all four
sides so that the surface becomes even and smooth with
the provisions of a cross-sectional area of 1000 mm2 to
4000 mm2 (ex 4407.11.00 to ex 4407.99.90)
 Meranti (Shorea sp) US$850/cu.m
 Merbau (Intsia sp) US$1.100/cu.m (up from the
previous US$1050)
 Rimba Campuran (Mixed tropical wood)
US$800/cu.m
 Ebony US$3,200/cu.m
 Teak US$1,400/cu.m
 Pinus and Gmelina US$700/cu.m
 Acacia sp US$650/cu.m
 Rubberwood US$300/cu.m
 Balsa (Ochroma sp), Eucalyptus, US$550/cu.m
 Sungkai (Peronema canescens) US$350/cu.m

Processed wood product which are leveled on all four
sides so that the surface becomes even and smooth from
merbau wood (Intsia sp) with a cross-sectional area of
more than 4000 sq.mm to 10000 sq.mm (ex 4407.29.91
and ex 4407.29.92): US$1,200/cu.m.

See: https://forestinsights.id/2022/08/31/harga-patokan-eksporhpe-produk-kayu-periode-bulan-september-2022-cek-di-sini/

Furniture SMEs helped to join International Expo
The Ministry of Industry helped 28 small and medium
furniture enterprises participate in the 2022 Indonesia
International Furniture Expo Exhibition (IFEX) in Jakarta
with the intention of boosting exports. "IFEX has proven
to have a huge and positive effect on the Indonesian
furniture industry” said the Minister Agus Gumiwang
Kartasasmita.

Over the past five years Indonesia has recorded an
increase of 78% in its furniture exports with the value of
furniture exports in 2021 reaching US$2.8 billion, an
increase of 33% compared to 2020. If this increasing trend
continues he said he is confident of further growth as first
quarter exports were up around 23%.

The Director General of Small, Medium and Multifarious
Industries at the ministry, Reni Yanita, reprted that her
administration's efforts to bring SMEs to the IFEX
exhibition were part of the “I'm Ready to Export
Program,” which aims at increasing exports of home
decoration and furniture products.

See: https://www.neraca.co.id/article/167684/ikm-berpotensikerek-ekspor-furnitur

Forestry can contribute the largest share of emission
reduction target
Forestry can contribute significantly to achieving
Indonesia’s emission reduction target but to see this will
require grassroots action according to an official from the
Environment and Forestry Ministry.

The Nationally Determined Contributions (NDC)
document says Indonesia is targeting to reduce greenhouse
gas emissions by 29% through its own efforts and 41%
with international support.

The forestry sector is expected to contribute 17 of the 29%
reduction target and 24 of the 41% target. If the emission
reduction in the forestry sector cannot be achieved, it will
affect the fulfillment of Indonesia's commitment at the
international level said the ministry official, Sugardiman.

See: https://en.antaranews.com/news/246093/forestry-accountsfor-largest-share-of-emission-reduction-target

Regulation on value of carbon coming soon
The Ministry of Environment and Forestry (KLHK) is
preparing a Ministerial Regulation which regulates the
economic value of carbon. Secretary General of the
Ministry of Environment and Forestry, Bambang
Hendroyono, said that the policy process for the carbon
economy is currently in the finalisation phase.

Bambang continued that, in the future, all business entities
will follow the regulation. Such business entities, which
are then called carbon entities, will later be registered and
the baseline of each business player will be transparent
and there will be an assessment by the institution,"
explained Bambang.

See: https://nasional.kontan.co.id/news/peraturan-menteri-lhksoal-nilai-ekonomi-karbon-akan-rampung-bulan-ini

Perhutani readies for exports
Perum Perhutani (a State-Owned Enterprise) is ready to
target international markets having succeeded in obtaining
international recognition in Sustainable Forest
management in the form of a FSC Forest Management
Certificate.

The company has expanded production of Non-Timber
Forest Product including pine resin and melaleuca leaves
so that Perhutani products are able to penetrate the global
market.

Director of Development and Planning of Perhutani,
Endung Trihartaka, explained that in addition to increasing
Perhutani's bargaining position with the issuance of FSCFM
certificates for KPH Banyumas Barat and Lawu Ds,
Perhutani could penetrate the pine log market, the wood
pellet industry (made from pine bronch as raw material)
and will trade FSC-FM certified pine resin.

See: https://www.medcom.id/ekonomi/sustainability/wkB2Q8qkdapat-sertifikat-hutan-berkelanjutan-perhutani-siap-bidik-pasarekspor

5. MYANMAR

   FJV plans to enter banking business
The Forest Products Joint Venture Corporation (FJV) has
conducted a feasibility study on entering into the banking
business according to Deputy Minister of Natural
Resources and Environmental Conservation.

The Deputy Minister said that the FJV, which was
established in 1993, has paid to the government about
US$5.13 million in taxes since its inception but under the
current business environment the corporation cannot reply
solely on its timber business. The proposed name of the
bank is Forestry and Environmental Development Bank.
Few details are available.

Kyat/dollar exchange rate steadies
The Kyat/dollar exchange rate has steadied at MMK3,400-
3,500 per US dollar after peaking at 4,000. The official
exchange rate still stands at MMK2,100 per US dollar.

Over the past 13 months the Central Bank sold US$554
million to stabilise the currency market. In order to
prevent a further volatility the Central Bank pumped
another US$200 million into the market at the beginning
of September.

New protected public forest area
Myanmar has designated a new protected public forest
area in the west-central region of Magway's Saw
Township. The Ministry of Natural Resources and
Environmental Conservation designated an area of 4,827
acres in Saw Township as Phyan Protected Public Forest.

This decision is aimed at conserving watershed areas,
protecting biodiversity and wildlife, ensuring soil
conservation and fulfilling the needs of local residents.
The ministry to establish 30% of the country as forest
reserves and 10% protected areas according to local
media.

See:
https://english.news.cn/20220827/d3004f360b61457ba220dceed1cd379f/c.html

Power outages drive excessive mangrove cutting
Deforestation of mangroves has increased in Arakan State
as power cuts forced people to use wood fuel according to
local mangrove conservationists. Since late last year
Myanmar has experienced frequent blackouts which
worsened in February and continued into the monsoon
season despite the fact that hydropower is the country’s
primary source of electricity.

See: https://www.bnionline.net/en/news/myanmars-electricitywoes-fueling-mangrove-deforestation-arakan-state

6. INDIA

  Wholesale price indices
The Office of the Economic Adviser, Department for
Promotion of Industry and Internal Trade has published
wholesale price indices for July 2022.

The price index for manufactured products, which account
for around 65% of the index, declined slightly compared
to June 2022. Out of the 22 NIC two-digit groups for
manufactured products, 9 groups witnessed an increase in
prices while 12 groups witnessed a decrease in prices.
Some of the groups that witnessed a decrease in prices
were food products, basic metals, textiles, wood and of
products of wood and cork, rubber and plastics products,
electrical equipment, chemical and chemical products.

The annual rate of inflation in July was up 14% year on
year due mainly to the increase in prices of oil, food, crude
petroleum and natural gas, basic metals, electricity,
chemicals and chemical products.

See: https://eaindustry.nic.in/pdf_files/cmonthly.pdf

GST on ocean freight may be removed
The government is considering removing the Goods and
Service Tax (GST) on ocean freight. The matter will be
discussed by the GST Council next month. This comes
after the Supreme Court struck down the tax on ocean
freight, a relief to importers.

The GST Council is the decision making body for the tax
and a draft amendment will be presented to the Council. If
agreed the move is likely to result in refunds to those who
have been charged.

See:
https://economictimes.indiatimes.com/industry/banking/finance/igst-on-ocean-freight-likely-to-bescrapped/articleshow/93716398.cms?from=mdr

Bright outlook for housing market
A Reuters poll of property market analysts has found the
outlook for the housing market is bright and has barely
changed in the last three months despite the Reserve Bank
of India tightening, the most aggressive tightening cycle in
a decade. But the main problem is price as almost 25% of
the population earns less than 15,000 rupees a month.

Mortgage rates are above pre-pandemic levels and this,
combined with a lack of supply and rising input costs, will
drive house prices higher this year.

See: https://www.reuters.com/world/india/rate-hikes-unlikelydent-housing-demand-india-bengaluru-lead-price-rises-2022-09-05/

Surge in forest fires
A surge in human activity in and around forests after
Covid lockdown restrictions were eased led to an all-time
record forest fire alerts across India according to the Forest
Survey of India. The highest incidences were in Madhya
Pradesh, Chhattisgarh, Maharashtra, Jharkhand and
Uttarakhand.

During the lockdowns peoples’ movements were
restricted, however, when restrictions were eased it led to
a sudden invasion of forests setting stage for forest fires
as the forest floor was full of dry leaves that are otherwise
cleared by villagers for fodder or by forest department.

See: https://timesofindia.indiatimes.com/city/dehradun/highestforest-fire-alerts-after-ease-in-covidcurbs/articleshow/93686261.cms

Plant more trees outside forests
The Ministry of Environment, Forest and Climate Change
and the US Agency for International Development
(USAID) announced the launch of a new programme
“Trees Outside Forests in India.”

The programme will expand tree coverage outside of
forest lands to raise carbon sequestration, support local
communities and strengthen the climate resilience of
agriculture thereby supporting global climate change
mitigation and adaptation goals.

See: https://indiaeducationdiary.in/u-s-and-india-launch-a-newinitiative-to-increase-tree-coverage-in-india/

Plywood
Please note plywood prices are now shown below free of
local taxes.

7. VIETNAM

  Wood and Wood Product (W&WP) trade highlights
According to Vietnam’s General Department of Customs
W&WP exports in August 2022 are estimated at US$1.35
billion, up 65% compared to August 2021.

Overall, in the first 8 months of 2022 W&WP exports
amounted to US$11.07 billion, a year-on-year rise of 6%.
The export of WP alone, reached US$7.77 billion, a yearon-
year decline of 3%.

In the first 8 months of 2022 wood imports stood at 4,088
million cu.m worth US$1,575 billion, down 12% in
volume but up 3% in value over the same period in 2021.
In the first 8 months of 2022, exports of all NTFPs
reached US$592.05 million, up 1.7% over the same
period in 2021.

W&WP exports to members of the CPTPP
(Comprehensive and Progressive Trans-Pacific
Partnership) market in August 2022 reached US$203.1
million, up 51% year-on-year. In the first 8 months of
2022, W&WP exports to this market were for US$1.7
billion, year-on-year up 25%.

Exports of bedroom furniture to the EU market in July
2022 reached US$3.3 million, down 15% compared to
July 2021. In the first 7 months of 2022 exports of this
category of furniture to EU reached US$31.5 million, up
13% year-on-year.

Vietnamese timber exporters struggle to find new
markets
In contrast to the full order books at the beginning of the
year Vietnamese wood and wooden furniture enterprises
are currently facing many difficulties due to the
cancellation of orders by customers because of inflation in
countries such as the US and the EU and the sharp
increase in input material costs.

In fact Vietnam’s wood industry is seeing declining sales
overseas. The export value in July was estimated at
US$1.41 billion, down 5.5% against June and down 1.6%
year-on-year according to a report of the General
Department of Forestry under the Ministry of Agriculture
and Rural Development (MARD). This was the second
month that the export of wood and timber products
decelerated.

Earlier, figures from the General Department of Customs
showed exports of wood and wood products in June
were down nearly 11% year-on-year. Through the first
seven months of the year, wood and wood product exports
were US$10.4 billion, up just 1% year-on-year.

According to market insiders the wood industry will face a
big challenge due to a decline in export orders in the latter
half of this year.

A quick survey of 52 timber businesses conducted by the
Vietnam Timber and Forest Products Association
(Vifores) in collaboration with Forest Trends showed that
most companies witnessed decreasing revenues in the US,
EU and UK markets.

Thirty-three out of 45 firms exporting to the US said their
revenues decreased by nearly 40% compared to the first
months of this year. A similar trend is seen in the EU and
the UK, with two-thirds of the surveyed enterprises
reporting revenue drops of over 41%.

Moreover, about 71% of businesses said that orders will
continue to drop towards the end of the year. Under the
current market situation, 44% of businesses expect
revenue will fall by over 40% for the whole year.

Phùng Quốc Mẫn, General Director of Bảo Hưng Wooden
Furniture Export Company, said the number of orders
canceled in July was more than 30%. In response to the
decline in purchasing power in the EU and the US markets
business is looking to boost furniture exports to Japan and
South Korea where inflation has had less of an impact than
in other countries.

There are also a few businesses that have turned to the
domestic market in order to maintain production, Mẫn
said.

Vietnam’s wood industry is integrated deeply
with international markets so high inflation and tightening
credit policies in major markets is driving down demand
for non-essential products including wood and wood
products.

High inflation in major markets such as the US, EU and
UK is having a direct negative impact on the production
and business activities of wood processing enterprises.
They are currently facing many difficulties in terms of
capital, labour costs and input materials.

Switching or finding new markets is not easybut this helps
wood and wooden furniture manufacturers to minimise
losses when a series of orders are delayed, reduced, or
even canceled by international partners, Mẫn said.

In addition, in order to reduce the import price of raw
materials to increase competitiveness, experts said wood
businesses should diversify their supply of timber,
reducing the proportion of imports from tropical countries
and increasing the proportion from low-risk sources.

Vietnam has become the world’s sixth largest exporter of
wood and wood products, the second largest in Asia and
biggest in the Southeast Asia and this has attracted
scrutiny from major trading partners.

Besides sourcing locally, Vietnam also imports timber raw
material from tropical countries. The volume of tropical
wood imported annually is around 1.5 million cubic
metres or 30% of total imports, mostly from Africa.

According to the General Department of Customs, despite
the impact of the COVID-19 pandemic, exports of wood
and wood products grew by 18% last year to US$14.12
billion.

Vietnam is targeting US$20 billion in total timber exports
by 2025, an increase of more than US$9 billion compared
to now.

The value of timber and wood products for domestic
consumption will reach US$5 billion in 2025 and over
US$6 billion in 2030.

The industry aims to have more than 80% of wood
processing and preservation establishments equipped
with advanced technology and all timber and wood
products for export and domestic consumption will be
made from verified legal raw material.

By 2030, the domestic wood processing industry will
become an important economic sector and develop a
reputable brand for Vietnamese wood products in
domestic and export markets.

Vietnam aims to become one of the leading countries in
the world's production, processing and export of timber
and wood products.

Another task of the industry is to develop infrastructure
and expand production scale. Specifically, the industry
will form five forestry zones with high technology
applications to attract investment from wood processing
enterprises and enterprises producing auxiliary materials.

Vietnam plans to build an international furniture
exhibition centre and encourage the development of
research centres to design wood products.

See: https://vietnamnews.vn/economy/1312851/timber-exportersstruggle-to-find-new-markets.html

VIFA EXPO 2022 returns
With Covid-19 now largely under control the Vietnam
International Furniture & Home Accessories Fair (VIFA
EXPO) - the biggest and most prestigious trade event in
the country for wood products and furniture returned 31
August to September 3, 2022 in Ho Chi Minh City. With
outstanding growth over recent years, Vietnam’s wood
and furniture industry is still concentrating on becoming
the world’s factory.

In March, the Prime Minister approved the “Project on the
Sustainable, Efficient Development of the Wood
Processing Industry in the 2021-2030 Period” through
Decision No. 327/QD-TTg.

In this context, VIFA EXPO 2022 aimed to be a trade
connection and platform that helps Vietnamese wood and
furniture manufacturers get back into global supply chains,
seek new potential export markets and promote products
to the world.

Participants at VIFA EXPO 2022 had have opportunities
to connect with and introduce brand-new products and
trends to domestic and international importers, buyers, and
traders looking for new supply sources.

The slogan of the fair is “Discover the Fascination of
Vietnamese Furniture & Handicrafts” which encouraged
exhibitors to display brand-new and diverse products.

Domestic and international visitors to VIFA-EXPO 2022
had the opportunity to meet and discuss partnerships with
leading furniture manufacturers from Vietnam and the
world. Beside the physical exhibition, the organisers also
arranged business matching sessions to help international
buyers who could not visit Vietnam to connect with
exhibitors.

In 2023, VIFA EXPO will be held twice a year, in March
(from 8 - 11) and in August.

See: https://vneconomy.vn/vifa-expo-2022-the-most-significantevent-for-vietnamese-furniture-is-back.htm

Collection of payment for forest environmental
services
According to Vietnam Forest Administration
(VNFOREST), building on the success and experience
derived from efforts in the first 7 months of 2022 the
Forest Protection and Development Fund (FPDF) of
Vietnam has provided advice to VNFOREST on many
issues as well as executive instructions such as the draft
Government Decree on piloting the transfer of emission
reduction results and financial management of the
Agreement on Payment of Emission Reduction in the
North Central Region (ERPA Decree), draft version of
amending and supplementing Decree No. 156/2018/NDCP
dated 16/11/2018 of the Government detailing the
implementation of a number of articles of the Law on
Forestry (Decree No. 156).

In addition, inspection, supervision and understanding of
local practices, communication and international
cooperation are always given attention by the FPDF
Management Board to contribute to uphold the efficiency
of the national forest protection and development policies.

With 1,371 trust contracts for FPDF signed over the first 7
months of 2022 the forest sector has collected VND 2,215
billion (equivalent to US$95 million), up 11% over the
same period in 2021.

The growth of FPDF collection has relied mainly on the
increase in power output of hydropower plants. The FPDF
revenue from hydropower has been reported at VND2,113
billion (US$90 million), accounting for more than 95% of
total revenue.

In 2021 the forest area under the FPDF covered 7.28
million hectares, accounting for almost 50% of the total
forested area nationwide.

More than VND2,726 billion collected by FPDF has been
paid to 2,270 forest owners who are organisations,
commune people's committees and other organisations
engaged in forest management and 251,244 forest owners
who are individuals, households, communities, villages
and groups of households.

The FPDF fund has been transferred to forest management
actors mainly through bank accounts, electronic and postal
transactions to ensure openness, transparency and
efficiency of the FPDF.

Established over ten years ago the FPDF money has
provided substantial funds for forest owners to improve
forest protection and management; help forestry
companies and forest management boards have financial
resources to maintain operations in the context of radical
banning of natural forest logging and contributing to
improve livelihoods of upland people who rely much on
forests for subsistence.

At a national conference on further development of FPDF,
participants identified shortcomings and obstacles in the
policy implementation process such as the potential of
FPDF has not been fully exploited due to the lack of
specific regulations and guidelines on FPDF on
ecotourism, industrial production facilities and carbon
sequestration services.

Conference participants also emphasised a number of tasks
that need to be addressed to accomplish the goal such as
the enlargement of FPDF scope to be proposed in the draft
Decree amending and supplementing Decree No. 156,
with specific attention to forest carbon sequestration and
storage services. This is expected to diversify the revenue
sources and enlarge the coverage of this payment scheme.

See: https://tongcuclamnghiep.gov.vn/LamNghiep/Index/thutien-dich-vu-moi-truong-rung-tang-11-so-voi-cung-ky-namtruoc-4601

8. BRAZIL

  ABIMCI ‘Timber Industry Sectoral Study’
In August the Brazilian Association of Mechanically-
Processed Timber Industry (Abimci) published its Sectoral
Study - 2022. The study covers activities in the national
timber industry sector and presents updates of the main
segments of processed wood products, socio-economic
data, the sector's contributions to the national economy as
well as specific information for each product segment.

The study describes the contribution of the mechanically
processed timber industry to the national economy. When
the entire solid wood industry was analysed, which also
includes the furniture industry, the number of jobs created
was 334,388. As for the forest-based sector as a whole,
which includes the wood industry, furniture, forestry, pulp
and paper industries, the job creation jumped to 612,527 as
of August this year.

See:
https://abimci.com.br/gestor?redirect_to=%2F%3Fpost_type%3Dpublicacao%26p%3D28594

and
For a summary see: https://forestnews.com.br/industriamadeireira-abimci-lanca-estudo-setorial-com-numeros-do-setorno-brasil/

Increase in timber exports
Wood product exports from Pará State in the Amazon
Region grew more than 100% in value between January
and July this year compared to the same period in 2021. In
total, international sales traded more than 170,000 tonnes
of wood products generating about US$250 million in
value. Besides the growth in value, which more than
doubled, the quantity exported registered an increase of
around 23%. Export prices have risen and another factor
responsible for the high export value, besides the
appreciation of the US dollar, was the shipment of large
volumes of profiled wood (flooring, decks, parquet and
friezes), a product that has a high added value and high
prices.

The main destination for wood product exports from Pará
State continued to be the United States, accounting for
almost 50% of total exports in the period, followed by
France, the Netherlands, Denmark and Belgium. The large
North American share is mainly due to the revival of civil
construction in that country after the stagnation caused by
the Covid-19 pandemic.

Despite the positive results of the first seven months of the
year, the Association of Timber Industries Exporters of
Pará State (AIMEX) sounded a warning that timber
exports from Pará state may face challenges in the coming
months especially due to the monetary policy of the
world's main economies where interest rates are being
raised to combat inflation.

See: https://redepara.com.br/Noticia/227203/exportacoes-demadeira-atingem-alta-de-mais-de-100

In related news, the forest sector accounted for 58% of
Acre Sstate exports in 2021. With exports of wood
products along with Brazil nut exports Acre earned almost
R$140 million according to the State Secretariat of
Planning and Management of Acre (SEPLAG) and the
Federal University of Acre (UFAC).

It has been forecast that a similar export performance will
be achieved in 2022. According to SEPLAG and UFAC
some challenges need to be overcome in order to move
forward. These include updating of laws and regulations;
the enforcement of control of the volume produced from
sustainable managed forest areas; the lack of added value
to wood and biodiversity products; the low productivity of
the forest industry; difficulties in access to credit lines
among others.

See:: https://ac24horas.com/2022/08/22/setor-florestal-respondepor-58-da-balanca-comercial-e-gerou-r-140-milhoes-no-acre/

Rainforest experiment moves forward
In late August a test phase of AmazonFACE began. This is
a project that will simulate an increase in carbon dioxide
emissions by 50% in the current atmospheric composition
to measure the impact caused by this change on the
Amazon rainforest. This will be done by means of “CO2
towers” and the first of these has just been completed.

The aim of the project is to better understand how an
increase in atmospheric CO2 can affect the resilience of
the Amazon forest and the biodiversity it shelters. It is
both an assessment of the contribution of the Amazon to
the global climate (through the regulation of carbon and
water cycling for the production of rainfall), but also of
verifying whether the Amazon forest will have the
capacity to sustain itself in the future.

See:
https://www.unicamp.br/unicamp/noticias/2022/08/26/experimento-sobre-floresta-tropical-comeca-em-campinas

9. PERU

  Loreto - first region to implement public purchases of
legal wood
The Loreto Region became the first region in the entire
country to implement a regulation that requires only
purchases of verified legal wood products. This came after
the Directory of Regional Managers in Iquitos approved
the regulation, Regional Ordinance 008-2020, whose
purpose is to guarantee the legal origin of the wood in the
processes of public purchases in the Regional Government
of Loreto.

This ordinance, first promulgated in 2020, guarantees the
legality of wood used and will benefit the processes of
acquisition of wood products. The regulation was
presented by the Loreto Forestry and Wildlife
Development Management (Gerfor) with the technical
assistance of USAID Pro-Bosques.

Among the advantages is the implementation of
procedures to verify the legal origin of the wood. In
addition it will offer Loreto contracting opportunities with
the State for formally registered wood supply companies.

Logging entrepreneurs improve technical skills
Within the framework of the implementation of the
PROCOMPITE 2020 Business Plan of the Association of
Wood Industrialists of Padre Abad (AIMPA) the
CITEforestal Pucallpa began training in semi-serial
production of wooden doors aimed at the members of the
association.

This was undertaken by the CITEforestal Pucallpa
Technological Institute of Production (ITP) of the Ministry
of Production (Produce). This year the programme
(Fordefor) together with CITE, has been undertaking
efforts in training MYPES and associations in the Ucayali
region on intermediate technologies.

As part of this training entrepreneurs produced a batch of
solid wooden doors from cachimbo (Cariniana decandra)
and cumala (Virola sebifera) species which were exhibited
at the Expoamazónica 2022 Fair.

SERFOR supports SFM in four Amazonian regions
With the favorable technical opinion of the National
Forestry and Wildlife Service (SERFOR), the Executive
branch finalised the transfer of budgetary resources to the
regional governments of Loreto, Madre de Dios, San
Martín and Ucayali for US$5.15 million to strengthen
management and the sustainable use of forest resources.

Through Supreme Decree No. 191-2022-EF the Ministry
of Economy and Finance authorised the items for the
Regional Government of Loreto for a total of US$1.72
million; to Madre de Dios US$1.26 million; to San Martín
US$0.94 million and to Ucayali US$1.26 million.

The actions to be carried out are related to the
implementation of zoning and forest management, the
traceability instruments that determine the legal origin of
the wood, the granting of rights and administrative acts for
access to resources.

The transfer of these resources was also possible thanks to
the support of international cooperation projects such as
the Peru-Norway-Germany Joint Declaration of Intent,
DCI, the UNDP Sustainable Productive Landscapes
Project and the USAID Forest Project, which, together
with the SERFOR, provided specialised technical
assistance.