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International Log
& Sawnwood Prices
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International Log Prices
Log supply becoming more critical in Sarawak Log
supply for processing mills in Sarawak in some areas is reported to be
critical and exporters are advising buyers they can no longer supply
certain items such as mouldings and some other machined items in the usual
market species. Kempas (Koompassia
malaccencis) is being absorbed by importers in Vietnam for furniture
and other finished products. It does appear that the overall supply of
logs in Malaysia for secondary and tertiary processing is tightening. India reduces wood import tariffs It
has been recently reported that, on 28 February 2005, the Central Board of
Excise and Customs (CBEC) under the Ministry of Finance, India, released
the General Exemptions & Customs Tariff Act with reductions in import
duties on various products, including wood products (see table). The
reduction of the duties, which were previously reduced in February 2004,
is part of an ongoing commitment to the WTO. Import duties for most wood
products were reduced below India's WTO bound rates for wood products, set
at 40%. However,
the effective customs duties are higher than the basic customs duties due
to additional charges. The maximum Basic Customs Duty (BCD) has been
reduced to 15% from 30% in the previous Act and the countervailing duty (CVD)
on both logs and lumber has been dropped. Furthermore, the special
additional duty (SAD) has been abolished on all imports, including wood
and wood products, and has been replaced by an education assessment (¡°cess¡±)
of 2% of the total applicable duty. On
top of the ¡°cess¡±, goods shipped to some cities, such as Mumbai will
attract ¡°Octroi¡± duties, which are a tax payable on demand for goods
brought into Mumbai for use, consumption, or sale (generally ranging from
2% to 8%). In addition, customs clearing and forwarding charges may be in
the range of 1% to 4%. Therefore, although the BCD is now 15%, except on
logs, the effective duty after additional taxes will be 15.3% on sawn
lumber and 34.4% on all other items. The effective duty on logs is 5.1%.
All
these wood products are bound by up to 40% duty by the WTO, except HS4418
which is unbound. India is a significant consumer of tropical timber. In 2004, India was
ITTO¡¯s second largest consumer of tropical logs and sawnwood (almost
15.5 million m3 and 6 million m3, respectively),
fourth largest consumer of veneer (247,000 million m3) and
third largest consumer of plywood (nearly 1.7 million m3). The
reduction in tariffs would likely result in increased imports of tropical
products to India to meet the growing needs of its huge wood industry and
market. Sustained economic growth in India and China The Asian Development Bank said that surging oil prices
are unlikely to restrain economic growth in India and China. The Bank
predicted that developing nations in Asia will grow at a rate of 6.5% in
2005 while growth by India is expected at 7% in the coming years. One of
the Bank¡¯s assumptions is that crude oil prices will eventually ease.
India¡¯s economy has grown about 6% a year in the last decade while
China¡¯s economy is growing at a rate of more than 9%. FRANCOPHONE
WEST AFRICA No
changes were reported in the market situation or in the prices for West
African species. China and India remain very active China
and India remain very active in the market but there are increased
enquiries from European importers. Exporters in the region expect Portugal
to remain a very quiet market as EU funding emphasis is directed towards
the new member states This is expected to affect the larger sized public
construction projects in Portugal. South Africans seek raw materials Interest
from Asian and Indian timber companies is growing in the setting up of
joint operations with producers in West Africa in order to secure
long‑term supply of raw materials. Some of the larger South African
importers are also back in the region looking for sawn lumber supplies as
supply from South‑East Asia becomes more expensive, difficult to
source and costly to ship. Possible consolidations in W. Africa In
the medium term, some observers believe that there will be steady
consolidation in Francophone West Africa leaving, possibly, only a handful
of major companies and their subsidiaries with the necessary resource and
finance bases to export sufficient logs and increase volumes of sawn
lumber to meet market demand. Undoubtedly there are big players in the
international timber market with the ability to take up smaller exporters.
In recent years, some of the European based timber companies have pulled
out from West Africa and have been replaced by Chinese and otherAsian
importers and exporters.
MYANMAR
Hoppus
ton = 1.8 m3; All grades, except SG-3, assorted and domestic,
are length 8¡¯ x girth 5¡¯ and up. SG-3 is girth 4¡¯ and up while
assorted and domestic are girth 4¡¯ and up. SG-3 grade is higher than
SG-4, but smaller in girth so prices are usually lower. In
recent years, the general decline in teak log availability and quality has
resulted in the introduction of lower grades such as assorted, domestic,
ER‑1, ER‑2 and ER‑3 (ER: export rejection),. Increased
quantities of these lower grades at the tender and sealed tender sales in
the last few years reveal the continuing decline in teak log supply. PAPUA
NEW GUINEA Business
in PNG is slow due to holidays as the country celebrates 30 years of
independence this month. PNG
bintangor logs sought by Chinese traders China
continues to be very active in the trade of Calophyllum
spp. (bintangor) logs. Chinese industry has been successful in
marketing ¡°combi¡± plywood (products with a poplar core and a tropical
wood face such as bintangor). PNG
has a multiplicity of Calophyllum species including Calophyllum papuanum, Calophyllum
pauciflorum, Calophyllum
peekelii, Calophyllum
pseudowitien and Calophyllum
soui. This wood has pink brown to pale reddish brown heartwood with
good arching properties and easy to work on. Much of PNG Calophyllum is
found in Manus, northern PNG and near the Equator. The species constitutes
over 50% of Manus¡¯ forest cover. For
plantation species, Kamarere remains the main export species, destined
primarily for Japan, Vietnam and Korea. Terminalia
sp. and teak are the other export plantation species.
Domestic Log Prices BRAZIL
PENINSULAR
MALAYSIA
The
domestic meranti prices (Peninsular Malaysia), covering various valuable
species (such as meranti bukit and seraya), are higher than FOB prices for
Sarawak merantis which comprise quite a mixed lot of log grades.
Peninsular Malaysia merantis are top grade logs used for the manufacture
of scantlings for the European market. GHANA
International
Sawnwood Prices FRANCOPHONE
WEST AFRICA
BRAZIL
MALAYSIA
INDONESIA Prices
for Indonesian timber products are not available. The MIS is currently
looking for a new source of price data from that country. Indonesia
further increases interest rates Following
the 75 points increase of the bench mark interest to 9.5% in August, the
Indonesian Central Bank raised further the rate to 10% in early September
to ease pressure on the rupiah. As a result, the rupiah recovered slightly
to 10,370 against the USD after it hit a four‑year low of 10,840 in
late August. In
Indonesia, where consumers pay US$0.24 a litre of petrol, officials are
considering increasing retail prices of fuel as early as October 1. The
government spends nearly US$14b a year (about a third of central
government expenditure) on fuel subsidies. GHANA Sharper
focus on ECOWAS countries According
to Ghanaian newspaper the Daily Graphic, the Ghana Timber Millers
Organisation (GTMO) is exploring new markets in the West Africa
sub‑region of the Economic Community of West Africa States (ECOWAS).
GTMO believes it has competitive advantage in concentrating and
channelling their timber products to the region on account of lower
freight and duties compared to the EU and other trading blocs. GTMO sees
growing trading problems with these markets, particularly in Europe. The
ECOWAS countries (Senegal, Nigeria Gambia, Burkina Faso, Sierra Leone and
Togo) accounted for 65% of Africa¡¯s wood imports from Ghana in
January-July 2005 valued at Euro 10.2m. Plywood and air dry lumber draw
particular interest in the Senegalese and Nigerian markets. GTMO believes
that the
ECOWAS market of over 250 million people is offers good opportunity for
Ghana. New FOB minimum guiding selling prices The
Timber Industry Development Division (TIDD) of the Forestry Commission
(FC) has released its Third
Quarter (Jul.-Sep. 2005) revised FOB Minimum Guiding Selling Prices
for lumber and other wood products. However,
prices for most products remain stable and unchanged, while prices of
selected few are revised upwards between 1.5-4.5%. Air-dry FAS 25-100mm x 150mm and up x 2.4m and up.
PERU INRENA
will evaluate mahogany export quota The
National Institute of Natural Resources (INRENA) will evaluate the
arguments presented by the Peruvian Exporters Association (ADEX) in early
September to expand the national export quota for mahogany (Swietenia macrophylla) for 2005. As
previously reported by the MIS Repor, Peru set an export quota of 26,621
m3 for 2005, of which 19,984 m3
has been already exported. In 2004, 30.785
m3 of mahogany were exported. The
president of the Wood Exporters Committee of ADEX, Mr. Rafael Tolmos,
indicated that 40% of the income of the forest sector comes from mahogany
exports and that millions of US dollars of export earnings are being lost
due to the export quota. Approximately 5,000 m3 of mahogany
wood with documents issued by INRENA cannot be exported due to the quota.
Domestic
Sawnwood Prices BRAZIL
MALAYSIA
GHANA
PERU The
Peruvian currency, the new Sol, fell slightly from S.3.23 to S.3.28 in
recent days. Analysts said this was mainly due to the purchase of US$180
millions of financial assets in US dollars by private financial
institutions devoted to administering retirement funds. Domestic
prices for most timber products decreased in US$ as a result.
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Abbreviations
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Source:ITTO'
Tropical Timber Market Report
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