4.
INDONESIA
Indonesia ready to boost exports of
wood products to
the US
The Indonesian government and the business sector will
work together to boost exports of wood products to the
United States, a market considered to have great prospects.
Umar Hadi, Director General for America and Europe in
the Ministry of Foreign Affairs said that the existing
challenges will be solved together so that the market share
of Indonesian wood products in the US continues to
increase.
The Indonesian Ambassador to the US, Rosan P. Roeslani,
supports the idea of expanding exports to the US saying
demand for Indonesian wood products in the US continues
to grow supported by furniture products for housing and
office needs.
According to the Director General of Sustainable Forest
Management at the Ministry of Environment and Forestry
(KLHK,) the US is the second largest export destination
after China and is worth US$2.23 billion.
General Chairperson of the Indonesian Forestry
Community Communication Forum (FKMPI), Indroyono
Soesilo, stated that Indonesia has the opportunity to
increase exports to the US as there is an advantage since
Chinese made goods face high import duties.
In addition, Indonesia also benefits from the Generalised
System of Preferences (GSP) facility. He suggested
intensive promotion in the US and the building of a
permanent exhibition centre in the US.
See:
https://forestinsights.id/2023/02/16/indonesia-dorongekspor-produk-kayu-ke-as/
and
https://industri.kontan.co.id/news/pemerintah-dan-pelaku-usahaakan-genjot-ekspor-produk-kayu-ke-amerika-serikat
Exports of Indonesian furniture and crafts set to
increase
The Indonesian Furniture and Craft Industry Association
(HIMKI) is optimistic that Indonesia's furniture and craft
exports will increase HIMKI estimates that exports could
rise over 8% year on year to over US$3.5 billion.
HIMKI Chairman, Abdul Sobur, commented that, while
export prospects have been subdued, the Association is
optimistic on prospects for the year adding "Growth in
2023 will be supported by demand in the United States
which is expected to rise more than 9%". Abdul said the
demand from the European Union and other European
countries is expected to increase by around 2% this year
compared to 2022.
See:https://industri.kontan.co.id/news/himki-targetkan-eksporfurnitur-dan-kerajinan-indonesia-tumbuh-di-atas-8-tahun-ini
2023 German Ambiente Exhibition a success
for
Indonesia
At the Ambiente Germany 2023 Exhibition Indonesian
exhibitors negotiated transactions worth around Rp151
billion. The Exhibition attracted buyers from the
Netherlands, France, Denmark, Italy, the United States,
Korea, Egypt, Morocco and India.
Indonesia’s Berlin Trade Attache, Bayu Wicaksono, said it
was encouraging that all participants in the Indonesian
Pavilion exhibited craft and home decoration products
made from verified legal timbers. The exhibition featured
wood products and household goods.
See:
https://pressrelease.kontan.co.id/news/gebrak-ambiente-2023-jerman-72-perusahaan-ri-raup-potensi-transaksi-rp151-miliar
Pilot project on multi-business forestry
The Indonesian Chamber of Commerce and Industry
(Kadin) Regenerative Forest Business Sub Hub (RFBSH)
initiated a Multi-business Forestry pilot project to test
whether multi-business forestry and agroforestry is viable
economically, ecologically and socially.
Kadin's Deputy Chairman for environment and forestry,
Silverius Oscar Unggul, said there will be five pilot
projects testing the strengthening of the sustainability
management in productive natural forests, the
development of the potential for sustainable management
in non-productive natural forests and the collaboration on
conflict resolution towards sustainable multi-business
models.
Other projects will be on multi-business model
management based on the diversity of forest resources and
management for carbon sequestration and storage.
See:
https://en.tempo.co/read/1693711/kadin-initiates-pilotproject-on-multibusiness-forestry
Indonesia/ WRI collaboration to pursue 2030 FOLU Net
Sink targets
Indonesia's Environment and Forestry Ministry and World
Resources Institute (WRI) will collaborate to pursue goals
of the FOLU Net Sink 2030 such as reducing emissions
from the forestry and other land use sectors and carbon
absorption.
Siti Nurbaya Bakar, Indonesia’s Minister of Environment
and Forestry stated that the collaboration will contribute to
the global efforts to reduce greenhouse gas emissions by
increasingly tapping into the potential of tropical
rainforests. The Minister also noted that the collaboration
aims to identify techniques, methods and practices in
satellite imaging as a means to map lands.
See:
https://en.antaranews.com/news/273021/indonesia-wricollaborate-to-pursue-2030-folu-net-sink-targets
In related news, Deputy Minister of Environment and
Forestry, Alue Dohong, said the forestry and other land
uses (FOLU) result-based payments, including the
REDD+ scheme will remain an instrument to support
reducing greenhouse gas emissions and achieving
Indonesia's NDC target. He added that this scheme could
increase the opportunities for carbon trading.
Alue said “principles of good governance need to be
properly reflected in cooperation and collaboration with
various development partners”.
See:
https://www.antaranews.com/berita/3400731/klhkinstrumen-penetapan-harga-karbon-anut-prinsip-goodgovernance
Indonesia's 2022 economic growth among highest in
G20: minister
Indonesia’s economic growth of 5.3% in 2022 was among
the highest in G20 member countries according to
Investment Minister, Bahlil Lahadalia.
Of the G20 countries, Saudi Arabia scored the highest
economic growth of 8.7% followed by Spain with 5.5%
and Indonesia with 5.31% growth. Investment contributed
positively to national economic growth the Minister said.
According to the Ministry, investment of Rp1,207.2
trillion (US$80 billion) was received in 2022 with an
additional investment of Rp318 trillion (US$21 billion)
recorded in the micro, small, and medium enterprise
(MSME) sector which generated employment for at least
1.3 million people.
See:
https://en.antaranews.com/news/272958/indonesias-2022-economic-growth-among-highest-in-g20-minister
and
https://jakartaglobe.id/business/indonesias-economic-growthbeats-most-g20-countries-minister
5.
MYANMAR
February Teak tender sale
The Myanma Timber Enterprise (MTE) sold teak logs and
sawnwood through a tender sale in February. For tender
were 1,500 tons of teak logs of Sawing Grade 4,5 and 6
plus plantation teak logs of PTG 1, 2 and 3 Grades. In
addition some 500 tons of teak sawnwood was on offer.
The result of the tender has not been made available.
According to the trade data from Ministry of Commerce
timber exports in the period April to December 2022
earned US$118.836 million, suggesting that total exports
in the financial year may exceed the US$128 million in the
previous financial year.
Foreign investment inflows
The media has reported fifteen Singaporean enterprises
invested US$1.157 billion into Myanmar in the past ten
months (Apr-Jan) of the current financial year 2022-2023
according to the Directorate of Investment and Company
Administration. Hong Kong SAR was second-largest
investor followed by China. The Myanmar Investment
Commission approved 70 foreign investment projects
from eight countries in the past ten months. The media
report identifies investments from many other countries.
The Myanmar Administration prioritises job creation and
welcomes investment in the manufacture of fertilizer,
cement, iron and steel, value-added food products, electric
vehicles, pharmaceutical/medical devices, agriculture and
livestock farming and its related industries and public
transportation services.
In the past, information about companies registered with
the Directorate of Investment and Company
Administration under the Ministry of Investment and
Foreign Economic Relations was published. However, the
military council blocked access to the data from
September 2022.
See:
https://www.gnlm.com.mm/singapore-top-source-offdi-in-myanmar-in-past-ten-months/
European Union imposes a sixth round of sanctions
In a 20 February press release the Council of the EU
announced a sixth round of sanctions against 9 individuals
and 7 entities. The press release says two years after the
military takeover staged in Myanmar on 1 February 2021
the EU Council has adopted restrictive measures against 9
persons and 7 entities in view of the continuing escalation
of violence, grave human rights violations and threats to
the peace, security and stability in Myanmar.
The sanctioned individuals include the Minister for
Energy, prominent businessmen who have supported the
regime’s repression with arms. Also sanctioned are highranking
officers in the Myanmar armed forces that are
closely associated with the regime.
The listed entities include departments of the Ministry of
Defence and a state-owned enterprise under its jurisdiction
as well as private companies supplying fuel, arms and
funds to the military. Restrictive measures currently apply
to a total of 93 individuals and 18 entities. Those
designated are subject to an asset freeze and a travel ban.
The Administration in Myanmar released statement
arguing that the international community has chosen to
blame the military council for ongoing conflict in
Myanmar rather than expose resistance fighters as the real
perpetrators of terrorism and violence.
See:
https://www.consilium.europa.eu/en/press/pressreleases/2023/02/20/myanmar-burma-eu-imposes-sixth-round-ofsanctions-against-9-individuals-and-7-entities/
and
https://myanmar-now.org/en/news/myanmars-junta-ownedcompanies-maintain-international-economic-ties-despitesanctions)
6.
INDIA
Inflation in check
The annual rate of inflation based on the Wholesale Price
Index was 4.73% in January 2023 compared to 4.95% in
December 2022. The decline in Janauary inflation was
primarily contributed by mineral oils, chemicals and
chemical products, textiles, crude petroleum and natural
gas, textiles and food products.
The wholesale price index for manufacturing increased to
141.3 in January, 2023 from 141.1 for December 2022.
Out of the 22 NIC two-digit groups for manufactured
products, 12 reported price increases while 10 saw
declines. The increases were mainly contributed by basic
metals; tobacco products; electrical equipment; computer,
electronic and optical products; motor vehicles, trailers &
semi-trailers; other transport equipment; printing and
reproduction of recorded media.
Some of the groups that saw decreased prices are other
manufacturing; textiles; chemical and chemical products;
fabricated metal products except machinery and
equipment and rubber products. The indices for wood
panels, sawnwood and veneer sheets all declined in
January 2023 against December 2022.
See:
https://eaindustry.nic.in/pdf_files/cmonthly.pdf
Record sales in residential housing sector
The residential real estate market in India set a new sales
record of 68% year on year growth in 2022. After two
years of poor sales due to the pandemic, the best growth
was seen in Tier 2 and Tier 3 cities.
According to the government, cities with a population in
the range of 50,000 to 100,000 are classified as Tier 2
cities, while those with a population of 20,000 to 50,000
are classified as Tier 3 cities.
Prospects for 2023 are good according to Robin Chhabra,
Founder and CEO of Dextrus Workspace. He said the
sector anticipates further downward trends in the global
economy but that the Indian economy and housing sector
will be little affected and there should be a steady rise in
GDP, larger disposable incomes and growing urbanisation.
See:
https://www.livemint.com/money/personal-finance/futureof-real-estate-market-in-india-in-2023-11676368024008.html
Tree cover target missed
The media in India has commented that the country has
missed its targets to increase the tree and forest cover set
out in the ‘Green India Mission’ (GIM). This mission is
one of the eight ‘Missions’ under the National Action Plan
on Climate Change which aims at protecting, restoring and
enhancing India’s forest cover and responding to climate
change.
See:
https://www.thehindu.com/sci-tech/energy-andenvironment/states-come-up-short-in-targets-to-plant-treesimprove-forest-cover/article66436049.ece
7.
VIETNAM
Wood and Wood Products (W&WP) trade
highlights
According to statistics from Customs W&WP
exports in January 2023 reached US$806 million,
down 39% compared to December 2022 and
down 49% compared to January 2022. Of this
WP exports were US$491.7 million, down 44%
compared to December 2022 and down 58%
compared to January 2022.
Vietnam's W&WP exports to South Korea in
January 2023 were valued at US$63.5 million,
down 36% compared to December 2022 and
down 39% compared to January 2022.
Due to the long Vietnamese Lunar New Year
holidays trade was interrupted. In addition, high
inflation and rising interest rates in South Korea
depressed demand.
In January 2023 exports of kitchen furniture
reached US$64 million, down 39% compared to
December 2022 and down 46% compared to
January 2022.
In January 2023, exports of bedroom furniture
stood at US$103 million, down 38% compared to
December 2022, down 54% compared to January
2022.
Due to the New Year holidays wooden handicraft
exports to the EU in January 2023 dropped
sharply, earning just US$18.5 million, down 34%
compared to December 2022 and down 52%
compared to January 2022.
Vietnam's imports of wood and wood products in
January 2023 were valued at US$120.5 million,
down 42% compared to December 2022 and
down 52% compared to January 2022.
Imports of wood raw materials from China in
December 2022 reached 36,890 cu.m at value of
US$17,515 million, down 3.5% in volume but up
2% in value compared to November 2022.
Compared to December 2021 imports were down
42% in volume and 45% in value. In 2022
imports of wood raw material from China
amounted to 650,340 cu.m with a value of
US$350.65 million, year-on-year, down 35.0% in
volume.
Challenges for Vietnam’s wood industries in January
2023
There was a decline in W&WP exports to almost all
markets in January 2023. Exports to the US, the top
market, were valued at US$367.3 million, down 60%
compared to January 2022, followed by the Chinese
market (US$132.9 million, down 1%) and Japan
(US$129.1 million, down 13%).
According to the Import and Export Department under the
Ministry of Trade and Industry the US housing sector is
expected to remain weak in 2023 so US demand for
wooden furniture will slow.
The generally weak demand in international markets
notably Japan and South Korea has led to reduced orders
and downward price pressure. Although the Chinese
market has reopened the Chinese domestic supply chain
has not fully recovered which is hampering the recovery in
sales.
Under the current conditions the Import and Export
Department forecasts that Vietnam’s W&WP exports in
2023 are not bright as consumers in target markets are
continuing to tighten spending under the pressure of
inflation.
However, some markets in Europe, especially non-EU
countries remain healthy for living room and dining room
furniture, products in which Vietnam is very competitive.
The Ministry of Industry and Trade has been actively
coordinating with relevant ministries and industry to
implement trade promotion activities to support the
exporters build and promote Vietnamese brands through
national programmes on trade promotion and programmes
to support enterprises improve product design and
development capacity.
The Ministry of Industry and Trade has directed overseas
trade promotion organisations to regularly support
Vietnamese enterprises, help wood industry associations
gather market information and help exporters take
advantage of existing FTAs to improve market access.
At the same time the Ministry urges relevant agencies to
provide early warnings of market risks associated with
trade protection measures in various countries.
See:
https://markettimes.vn/kho-khan-bua-vay-nganh-xuat-khaugo-va-san-pham-go-trong-thang-1-2023-17881.html
Revenue for forest environmental services (PFES)
On February 17, 2023, in Hanoi, the General Department
of Forestry and Vietnam Forest Protection and
Development Fund organised a national conference to
evaluate the implementation of the FPDF (Forest
Protection and Development Fund) in 2022 and its
planning for 2023.
At the conference discussions were focused on the
difficulties that exist in the process of FPDF
implementation and solutions to remove obstacles and
inadequacies to facilitate FPDF implementation of this
payment scheme in 2023.
Specific attention was given to the development of a new
type of forest environmental service - forest carbon
sequestration and storage service in the context of the
Government Decree No. 107/2022/ND-CP dated 28
December 2022 on pilot transfer of emission reduction
results and financial management of the North Central
Region (ERPA) emission reduction payment agreement.
As of 31 December 2022 the collection of forest
environmental service payments nationwide reached over
VND 3,700 billion (US$165 million) exceeding by 23%
the target and being up 17% compared to 2021.
Of the VND3,700 billion in 2022, nearly VND3,000
billion has been disbursed to forest environmental service
providers mainly through bank accounts or electronic
transactions to ensure transparency and efficiency of the
PFES scheme.
The distribution of funds has supported the management
and protection of 7.3 million hectares of the existing forest
which accounts for almost 50% of the total forest estate.
Speaking at the conference, Deputy Minister of
Agriculture and Rural Development, Nguyen Quoc Tri,
highlighted the positive results of the PFES policy as an
important and sustainable financial source for forest
resource management and livelihood improvement for a
large segment of forest dependent dwellers.
Nguyen Quoc Tri reported that each year State invests
around VND900 billion to protect and develop 11 million
hectares of forest. The Deputy Minister also emphasised
the need to prepare for implementation of forest carbon
sequestration and storage service as a new scheme of
PFES.
See:
https://tongcuclamnghiep.gov.vn/LamNghiep/Index/dichvu-moi-truong-rung-dat-muc-tieu-thu-3200-ty-dong-nam-2023-4687
8. BRAZIL
Operação Rotas da Amazônia II seizes
illegal timber
The Operation Amazon Routes II (Operação Rotas da
Amazônia II) that took place between January and
February 2023 aimed at reducing environmental crimes,
particularly those related to deforestation in the Legal
Amazon.
The operation, carried out by the Brazilian Federal
Highway Police (PRF), resulted in the seizures of more
than 627 cu.m of illegal timber in the state of Maranhão in
the Amazon Region. Additionally, vehicles transporting
illegal wood were seized and 26 people were arrested for
environmental crimes.
The first phase of this operation took place between
October and November 2022 when 460 cu.m of illegal
wood wwas seized in the State of Maranhão.
See:
https://g1.globo.com/ma/maranhao/noticia/2023/02/15/policiarodoviaria-realiza-operacao-e-apreende-mais-de-627m-demadeira-illegal-no-
ma.ghtml
Volumetric yield from harvested wood
The Amazon rainforest is one of the main regions
producing tropical timber. To better understand the
harvesting and production environmental agencies monitor
the volumetric yield which is the ratio between the volume
of a log and the volume of sawnwood recovered during
milling.
Studies suggest the average yield is only 35% of the
harvested wood. A case study carried out by the Instituto
National Institute of Amazonian Research (INPA)
proposes there should be more investment in technology to
increase the yield from harvested logs.
In many companies the percentage yield is abnormal
which undermines the reliability of the data in the
Document of Forest Origin (DOF) system which is used to
monitor the origin of timber. A study showed that logs of
19 timber species were selected and the estimated yield
was only 24.6% on average. When the 35% yield is not
reached the company receives penalties and when these
accumulate companies face difficulties in acquiring new
logging licenses.
The DOF is a valuable tool but it can be improved. The
yields from species will differ and the yield will also be
influenced by processing efficiency and the quality of the
log. INPA recommends supporting investment in science
and technology to improve timber species yields.
See:
https://umsoplaneta.globo.com/energia/noticia/2023/02/12/empresas-aproveitam-somente-um-terco-da-madeira-explorada-naamazonia-aponta-estudo.ghtml
Export update
In January 2023 Brazilian exports of wood-based products
(except pulp and paper) declined 32% in value compared
to January 2022, from US$393.9 million to US$267.3
million.
Pine sawnwood exports fell 10% in value. January 2022,
US$49.7 million and January 2023, US$ 44.6 million. In
volume, exports increased 6.5% over the same period,
from 180,600 cu.m to 192,400 cu.m.
Tropical sawnwood exports dropped 24% in volume from
38,900 cu.m in January 2022 to 29,500 cu.m in January
2023. In value terms exports decreased 0.6% from
US$15.8 million to US$15.7 million, over the same
period.
Pine plywood exports witnessed a 35% decline in value in
January 2023 compared to January 2022, from US$86.3
million to US$56.1 million. In volume, exports decreased
15% over the same period, from 222,200 cu.m to 189,250
cu.m.
As for tropical plywood, exports decreased in volume 44%
and in by 44% in value, from 3,200 cu.m and US$6.3
million in January 2022 to 1,800 cu.m and US$3.5 million
in January 2023.
As for wooden furniture, the exported value decreased
from US$52.1 million in January 2022 to US$34.6 million
in January 2023, a 34% fall in the total exports during the
period.
Brazil’s Timber Index
In 2022, with the support of International Tropical Timber
Organization (ITTO) and the Macao Trade and Investment
Promotion Institute (IPIM) a Global Timber Index (GTI)
is being published by the GTI Secretariat as the
implementing agency. In the first year of operation 7
countries in Asia, Africa and Latin America have been
selected as pilot countries, including Indonesia, Malaysia,
Gabon, Republic of Congo, Brazil, Peru and China.
In January 2023, the Global Timber Index (GTI) report
shows that affected by New Year holiday and continuous
rainy season, the GTI index of the timber producing
countries like Indonesia, Malaysia, Gabon, ROC, Brazil,
Mexico was all below the critical level (50%) indicating
the business operations of timber companies shrank from
December 2022.
The report accompanying the index says the Brazilian
government is actively looking for measures to recover the
economy such as seeking to sign an agreement between
the Southern Common Market (MERCOSUR) and EU by
mid-2023.
Brazil's import and export data for 2022 showed a good
development trend in January 2023. According to the data
released by the Ministry of Development, Industry and
Foreign Trade, Brazil's total exports in 2022 were US$335
billion, an increase of 19.3% over 2021.
The total import volume was US$ 272.7 billion, an
increase of 24.3% over 2021. Brazil's trade surplus rose to
US$ 62.3 billion in 2022, the highest value since 1989 and
the rise in international commodity prices was the biggest
factor driving the trade surplus in 2022.
In January 2023, because of the domestic political turmoil,
there was a decline in demand from timber enterprises.
The decline was also due to extended public holidays and
for some countries, poor weather.
In January production by Brazil’s timber industry
continued to slow and timber companies reported
problems such as the unstable exchange rate, lower
demand in Europe and North America and lower sales
prices than costs. Timber companies aimed to reduce
internal costs, look for new customers and strengthen
product quality control.
See: https://itto-ggsc.org/list_52/
Brazil’s African mahogany plantations - soon market
debut
African mahogany (khaya Ivorensis) grown in plantations
in Brazil is about to change the timber market. African
mahogany represents a high investment potential for
Brazilian producers and is an alternative for Brazilian
mahogany which is listed as an endangered species. In
Brazil African mahogany is grown in the states of
Roraima, Minas Gerais, São Paulo, Goiás, Espírito Santo
and Mato Grosso do Sul. Establishing mahogany
plantations presents no insurmountable issues and the trees
will be ready for harvest after 20 years.
It is estimated there are about 45,000 hectares of African
mahogany plantations in Brazil and it has been reported
that establishment costs are around BRL6,500 per hectare.
The expectation is that commercial plantations of this
hardwood will contribute a valuable input to domestic
production and there will be export opportunities.
The cultivation of African mahogany in Brazil is recent,
the first plantations were established only 18 years ago and
were on an experimental basis.
See:
https://socientifica.com.br/mogno-africano-a-madeiranobre-cultivada-no-brasil-com-alto-potencial-de-investimento/
9. PERU
Forest users in Loreto are recognised
for good forest
and wildlife management
The Agency for the Supervision of Forest Resources and
Wildlife (OSINFOR) recognised the efforts of five
operators in the Loreto Region and they were awarded
"Certificates of Compliance with Obligations" that credit
good performance in their forest management, added value
production and external services.
The initiative to issue certificates of compliance is
supported by USAID and the U.S. Forest Service, through
the FOREST+ Programme.
GORE Ucayali and SERFOR work on the
implementation of the ‘Productive and Sustainable
Forests Programme’
The Regional Government of Ucayali (GOREU) and
SERFOR coordinated action to strengthen the sustainable
management of the country's forest heritage through the
implementation of a ‘Productive and Sustainable Forests
Programme’ (BPS) that will be developed over the next
five years in nine departments of the country including
Ucayali.
The Executive Director of SERFOR, Alberto Gonzales-
Zúñiga, announced that the BPS programme is one of the
most important in the forestry sector and that the
headquarters will be in Pucallpa. The BPS programme is
partially financed by the German government, through the
KfW Development Bank and will deliver a total
investment of around US$110 million.
Peru first to ratify FTA with Singapore
The Singapore Ministry of Trade and Industry has
expressed gratitude to Peru for being the first Pacific
Alliance Member State to ratify an FTA with Singapore.
Once the FTA enters into force for the four Member States
(Chile, Colombia, Mexico and Peru) Singapore will be an
Associate State of the Alliance. Among the many benefits
the Alliance will result in tariff elimination on the many of
tariff lines and improved transparency and smoother
processing in Customs procedures.
See:
https://andina.pe/ingles/noticia-singaporean-trade-ministrycongratulates-peru-on-fta-ratification-930312.aspx
