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International Log
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1.
International Log Prices FRANCOPHONE
WEST AFRICA
MALAYSIA Prices for most log species and grades rose in early December due to the continued wet spell in log producing areas of Peninsular Malaysia, which is affecting log harvesting and transportation (see section on international sawnwood prices). Sarawak to certify timber companies by 2030 From Brunei Online.com. Chief Minister Pehin Abdul Taib Mahmud said that in future, Sarawak would certify timber companies by the year 2030 with the Malaysian Timber Certification Council (MTCC). Mr. Mahmud said adjustments would be made to enable such companies to gain timber certification. Recently, in Kuala Lumpur, Primary Industries Minister Datuk Seri Lim Keng Yaik informed that MTCC ¡°plans to use a new standard that has been developed using the principles and criteria of the FSC as the template for the next phase for its certification scheme.¡±
MYANMAR
Hoppus ton =
1.8 m3; All grades, except SG-3, assorted and Teak log prices reaching new records The teak log market remains firm with prices for some grades reaching new records on the back of limited availability of high grade logs (SG-2 and better). Production of deckings and boards for the European market depends on availability of good grade logs. The declining share of better grade logs in monthly tenders has inhibited the participation of European buyers as well as of some Thai sawmillers and veneer specialists. The log market for other hardwood remains upbeat for pyinkado and sluggish for gurjan (keruing).Fresh logs from the new harvest will come out from January onwards. China and Vietnam competes for processing News indicates that more orders for teak furniture and flooring have been placed in China and Vietnam. The stiff competition from China and Vietnam is presumed to be a factor in the decline in orders for teak processing in Myanmar¡¯s wood industry. PAPUA
NEW GUINEA
2.
Domestic
Log Prices GHANA
Pen.
Malaysian meranti logs are top grade and are used for
scantlings for the EU. Their prices are higher than Sarawak¡¯s. Indonesia plans to increase 2006 logging quota Indonesian¡¯s ailing forestry-based industries are about to get a boost, with the government promising to increase the logging quota next year in order to enhance the local industry¡¯s production capacity and help create jobs. The Minister of Forestry, M.S. Kaban told the Jakarta Post recently that the Ministry was planning to increase the harvest quota for natural forest from 5.6 million m3 in 2005 (8.4 million m3, including timber from plantations) to 8.1 million m3 (11 million m3) in 2006. Mr Kaban explained that the Ministry has not come up with an exact policy on the quota yet, but that it could be increased by around 30% based on the rate of growth of trees in industrial timber plantations. Quota aims to increase export earnings Mr. Kaban said the increase in the quota was aimed at revitalizing the country¡¯s forestry-based industries and increasing export earnings of up to US$8 billion next year from a projected $5 billion this year. The Ministry also hopes to collect more taxes from the industry and from royalties on timber sales, which would then be invested in forest rehabilitation. Lower quota not the answer to illegal logging Mr. Kaban maintained that reducing the logging quota was not the answer to curbing illegal logging as the low quota had forced a large number of forestry-based companies to seek illegal timber to keep their operations running. The great discrepancy between demand and availability of timber under the quota has been cited as a new major contributing factor to widespread illegal logging across the country. The Jakarta Post reports that, presently, the forestry-based industry has an installed annual capacity of about 42 million m3, but the industry is flooded with illegal timber from the natural forests. Underperforming companies to merge or sell Mr. Kaban also pledged that he would ensure that forestry-based under-performing companies would merge or sell their shares to healthier companies in order to maximize the use of forestry concessions. The Minister added that the rise in the quota would be followed by a new regulatory package issued by the Ministry, which would consist of efforts to sustain natural forests and to make the industry more efficient.
Domestic prices up as BRL further strengthens While average prices of solid wood products in Brazilian real (BRL) have remained practically stable, some products have not followed the monthly inflation at the domestic market. Domestic prices show changes of around 3%, caused primarily by the strong devaluation of the US currency over the period. The market for these products has been stable , with production limited due to weak exports and the fact that the domestic market has not absorbed the production surplus. Deforestation rate in the Amazon falls 31% The Ministry of the Environment reported that intense efforts undertaken by the government to reduce deforestation during the past three years has been rewarded, as the deforestation rate decreased 31% in the period August 2004 to July 2005 compared to the same period in 2003-2004. A satellite imagery assessment carried out by the Brazilian Space Agency (INPE) analyzed 77 images and identified a deforested area of 18,900 km2 lower than the 27,000 km2 identified in the previous period. Deforestation dropped in all Amazon states, including Southern Par¨¢ and the State of Mato Grosso, both considered as of high priority in the Brazilian government agenda. According to government officials , the decrease is due to more effective control measures, which include fines, imprisonment of illegal loggers and confiscation of illegal logs and equipment used in harvesting operations. This year alone illegal logging fines amounted to 1.8 billion BRL (around $800 million). New monitoring system for the Amazon A Brazilian-led scientific research team, linked to the Amazon Institute of People and the Environment (IMAZON), has developed a remote sensing system for detecting selective forest logging impacts. The new system is expected to identify forest logging activities and to detect small forest fires in the Amazon region that are invisible to conventional satellite imagery processing methods. The system does not require particularly advanced computers and enables the capture of subtle differences of shadow and light at every pixel of the Landsat images. The precision reaches 94% against the 86% of the existing operating system. The new system allows the integration of specialized software to detect typical signs of forest harvesting such as log yards. The method was tested successfully in the Northern region of the State of Mato Grosso and its main purpose is to generate information for public use. The objective is to test the method in the entire Brazilian Amazon region. IBAMA fines 70 illegal loggers The Institute for Environment and Renewable Natural Resources (IBAMA) has fined 70 producers in the State of Roraima for illegal logging. Fines vary according to the location. Fines in forest areas are at 1,500 BRL per hectare while in reserves or protected areas they can reach up to 5,000 BRL per hectare. IBAMA¡¯s operation has been in place since last March following a Normative Instruction that requires forest monitoring and the comparison of aero-photo surveys of Amazonian deforestation. Besides voluntary reports originated in the States, the Ministry of the Environment has the so-called Green Phone Line to accept anonymous reports of deforestation. Penalties amount to BRL 170,000 so far. IBAMA has warned agricultural producers, particularly in new settlement projects, that deforestation must be avoided. Chinese Interested in certified tropical wood Representatives of a Chinese company visited some Brazilian counterparts last November in the State of Sao Paulo seeking new suppliers of certified wood. The company, which produces wood blinds for the European market, has sought assistance from the Certified Forest Products Buyers Group. The Chinese company , with monthly consumption of up to 1,500 m3, is interested in long-term contracts of certified wood of tropical native species. At least six major Brazilian producers were contacted for possible negotiations. A trial phase will be established with possible contracts following. This approach represents a potential trade opportunity for certified wood products from tropical species in Brazil. The move by the Chinese company was motivated by requirements of European home-improvement clients demanding certified wood. ¡¡
3. International Sawnwood Prices FRANCOPHONE
WEST AFRICA The trends
reported in the last MIS Report continued in the first half of December,
with prices for sapele and iroko weak while those for most other species
unchanged.
A new contract for moabi sawnwood for a European destination reported scantling prices at ?620 per m3 FOB, up ?80 and random GMS sizes at ?580 per m3, up ?60. Maobi production and market supplies in Cameroon are described as very tight. While it is not certain if these prices establish a new level, given the low supply situation in the region it is likely that producers will raise further moabi prices. Far East demand helps to offset dull EU market The effect of dull European markets, due to the Christmas season, continued to be balanced by strong interest from South Africa and steady buying by China and India, at unchanged prices, plus a steady Far East demand at firming prices. GHANA Air-dry FAS 25-100mm x 150mm and up x 2.4m and up.
Monsoon triggers higher log and sawn prices The current wet spell in most log producing areas of Peninsular Malaysia continued the tightening in the supply of raw timber material for the export markets, domestic sawmills and the various processing industries. As a result, prices for most log and sawnwood species and grades rose during the first half of December.
BRAZIL Up to 70% of Mato Grosso¡¯s sawmills may close Di¨¢rio de Cuiab¨¢ has reported that the 2006 forecast for the solid wood sector of the State of Mato Grosso indicates that at least 70% of the 1,800 sawmills may not be in operation in the coming year. The situation faced by the sector is quite serious and companies argue that most may not be able to operate under the government¡¯s prevailing environmental restrictions, and the slow rate of approval for new forest management plans (FMP) and logging licenses and issuing of Authorization for Transportation of Forest Products (ATPFs). According to the Solid Wood Producers Union of Northern Mato Grosso, the companies¡¯ situation has been aggravated lately by the reduction of stocks of logs. Near 90% of the sawmills are waiting for the approval of new FMP in order to re-start their activities. If prospects are confirmed, 1,260 sawmilling companies are to be closed by the end of the year, with only 540 companies able to operate in 2006. The increasing unemployment rate is an additional negative outcome. In 2004, lumber companies employed 30,000 workers. Now, only 900 sawmilling units are operational, most with reduced production capacity. About 20,000 workers are now unemployed. Brazil¡¯s economy contracts in Q3 Brazil¡¯s economy contracted for the first time in more than two years, with GDP shrinking by 1.2% in the third quarter, trimming the 12-month growth rate to a mere 1%. Brazil¡¯s economy faces the adverse impact of a lower US dollar exchange rate that have affected exports, a year after the US currency started its downfall in comparison to the Brazilian Real (down 20% since October 2004). Since then, export transactions have continuously decreased, affecting industrial production and competitiveness.
Peru gets its first certified production forest Almost 35,000 hectares of forest owned by five native communities in the Ucayali region were certified by FSC. The certification was obtained with the technical assistance of the Association for Research and Comprehensive Development (AIDER) after five years of work with the communities Calleria, Preferida de Charasmana, Puerto Belen, Pueblo Nuevo and Curiaca of the Shipibo-Conibo ethnic group. The forest area was assessed by GFA Terra Systems in May 2005, which recommended the certification.Around 10.4 million hectares of forest in Peru are registered under native communities, compared to 7 million hectares under Permanent Production Forest. INRENA launches Manual on illegal logging INRENA launched the ¡°Manual of Regulations on Illegal Logging¡± with the aim of explaining the main regulations and the institutions that regulate forest activities in the country. The document is available to the general public. The Manual is divided into three parts. The first part contains the relevant legal framework combating illegal logging. Legal regulations related to forest conversion, legal access to timber, competences and functions of relevant government institutions are also discussed. The second part contains the procedures to be followed against illegal logging by government institutions such as OSINFOR, the Forest and Wildlife Office, the Natural Protected Areas Office and INRENA among others. The third part contains a chronological and thematic index about current legal forest regulations and a copy of the Forest and Wildlife Law and its regulations. According to the INRENA, annual illegal logging is estimated at over 221,000 m3 , about 15% of Peru¡¯s total production valued at $44.5 million. 90% of forest concessions show problems Leoncio Alvarez, Head of INRENA, indicated that 90% of the Peruvian forest concessions are presenting problems. The main problem seems to be the lack of funds of forest concessionaries for the payment of logging rights, elaboration of Annual Operation Plans and investment in machinery and infrastructure for forest operations. On the other hand, in a recent meeting of forest concessionaries and timber companies, representatives of the respective associations indicated that the current problems could have been avoided or solved if government authorities (INRENA and the Ministry of Agriculture) had paid attention to the proposals made the year after the establishment of the forest concessions. The proposals recommended a 5-year gradual process for concessionaires to adapt to the new logging scheme.
*Cheaper
and small-dimension sawnwood for this market. 4. Domestic Sawnwood Prices GHANA
MALAYSIA
INDONESIA Sawn timber, ex-mill; Domestic construction material
PERU
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Source:ITTO'
Tropical Timber Market Report
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