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1. FRANCOPHONE WEST AFRICA Sapele prices rebound As in the past two or three months, markets are being led by China and India, where demand is still brisk, while European markets generally are rather dull and not expected to improve significantly until early spring. Most log prices remained stable through December. Even iroko prices were unchanged after losing ground due to high stocks in Europe and increased supply from D.R. of Congo and Gabon. Sapele logs saw small price gains, with LM and B grades rising euro8 to euro221 and euro206 per m3, respectively. Prices weakened in 2005 after Chinese buyers stepped back from the sapele market, but it seems that they have now returned. The surge in log prices was not reflected in price gains for sapele sawnwood due to enough stocks in Europe and few buyers during the winter period. Afromosia prices are usually stable but supply is generally limited. Prices for Europe remain at euro381 for LM and euro351 for B grade but prices for Asian destinations dropped euro35-40 per m3 due possibly to a ¡®one off¡¯ clearance or variations in quality. Prices for okan logs for Europe surged euro15 for LM and B grades to euro183 per m3 while prices for Asian buyers were unchanged at euro168 per m3. Shippers foresee further price rises, even for Asian markets, during January and February. Low log production matches actual demand Rains have ended in Cameroon and Central African Republic, but still persist in North Rep. of Congo and in Gabon. Overall in the region, production is reported as low, matching the actual demand. Gabon¡¯s SNBG, in particular, reported a log production of only about 28,000 m3 last December against a normal level of 80,000-90,000 m3. SNBG still holds okoume trade monopoly In spite of the previous announcements for SNBG to abandon the State sales monopoly for okoum¨¦ as from 1 January 2006, SNBG officials maintain that, in fact, there is no official decree yet. This has created some confusion among traders, who were hoping for a clarification soon. Congo boosts exports through Point Noir Rep. of Congo is investing in new railway and was expecting to open two new train services in December to boost exports through Point Noir. One producer was reported as exporting around 60,000 m3 of okoum¨¦ logs last December, which indicates that is possible that Point Noir will eventually resume its former role of major timber export port. Prices for sawnwood remained largely stable Prices for most sawnwood species remained stable, with only maobi sawnwood surging euro40 to euro580 per m3 in December. German and French buyers are resisting any higher price but shippers believe prices will firm within the next two months as maobi production and market supplies in Cameroon remain very tight. In general, demand in European markets continue to be slow and is likely to remain dull in the coming days, but balanced by the strong interest from South Africa and the steady buying by China and India. UN renews Liberia¡¯s timber trade ban The UN Security Council decided on 20 December 2005 to renew its bans on the sale or supply of arms, diamonds and timber, as well as travel, imposed by resolution 1521 (2003). The Council also re-established the Panel of Experts to, among other things, conduct a follow-up assessment mission to Liberia and neighbouring States. Progress in curbing illegal logging New research conducted by FAO and ITTO suggests that governments are becoming increasingly innovative and effective in tackling the problem of illegal logging. The research is summarized in a recently-published joint FAO-ITTO report, Best Practices for Improving Law Compliance in the Forest Sector (www.fao.org/docrep/008/a0146e/a0146e00.htm), which highlights successful efforts to combat illegal logging undertaken in eleven countries: Bolivia , Cambodia, Cameroon, Ecuador, Honduras, Indonesia , Italy, Malaysia, Mozambique, Nicaragua and Peru. Counter-measures to illegal logging The report highlights efforts such as that in Ecuador in 2000 that created a mechanism, called the Regencia forestal, under which independent professional foresters check to ensure that forest operators are complying with laws and regulations.Violations can lead to the revocation of operating licenses or other penalties. Ecuador also established check-points between its forests and the locations where wood processing and marketing occurs. This measure resulted in a six-fold increase in government seizures of illegally-produced timber during its first year of implementation. In Cambodia, the promotion of community-managed forestry management, a system in which local communities own and manage forests, helped to limit forest crime. The government of Gambia streamlined harvesting guidelines and recognized local forest management rules, making it easier for small-scale forest operators to comply with regulations and abide by the law. Although it is too early to quantify the success of the measures highlighted in the report, some of them are producing visible improvements. By sharing these successful case studies, ITTO and FAO hope to provide guidance to other countries wrestling with the problem of illicit logging. Log Prices
Sawnwood Prices
2. GHANA Log Prices
Sawnwood Prices Air-dry FAS 25-100mm x 150mm and up x 2.4m and up.
Domestic Prices
3.
MALAYSIA Bullish market for Asian tropical timbers Exporters are quoting higher prices for most products in Malaysia and Indonesia as the monsoon rains continue affecting production areas and the preparations for the Chinese New Year celebrations sets in. Exporters are pleased by EU¡¯s reduction of Malaysian plywood¡¯s import duty from 7% to 3.5%, as of 1 January 2006. In addition to stimulate more import demand, the reduction will give Malaysia a competitive edge over Indonesia and China, as plywood from these countries will be levied a 7% import duty. Rubberwood imports from Thailand continue Monsoon rains are compounding the acute shortage of rubberwood supply in the northern states of Peninsular Malaysia. Norwegian-owned H.K. Lamtech (M) Sdn Bhd, a manufacturer of laminated rubberwood chairs based in Kedah, had to import raw material from Thailand for the first time in 15 years of business. Lamtech consumes 400 ton of rubberwood logs per month, which are usually sourced from within Kedah. It also sources rotary peeled rubberwood veneer from Perak and Pahang. As fuel prices rose, prices of natural rubber have also soared. Prices for rubber, which are at a high of 6 MR per kg, have persuaded rubber planters to continue tapping their rubber trees, even those that are more than 25 years old and ripe for harvest as raw material for furniture makers. As a result, many rubber planters are delaying replanting. The lack of rubberwood log supply in the market has been worsened by the monsoon. Sabah asks for funds for plantations Sabah¡¯s Chief Minister, Datuk Seri Musa, said the Federal Government is concerned with the development of forest plantations, cocoa, oil palm and rubber in Sabah, East Malaysia. He proposed measures to stimulate the further development of plantations. According to Mr. Musa, Sabah Forestry Development Authority needs 179 million Malaysian ringgit (MR) to develop 35,000 hectares of Acacia Mangium plantation in Bengkoka and Pitas, and 10,000 hectares of rubber plantation in Kota Marudu. Sabah Softwoods Berhad, a State agency subsidiary of Yayasan Sabah, needs 137.4 million MR for replanting forest plantation species. Clarification on Malaysian Ministry At the last issue of the MIS Report, the Malaysian Minister of Primary Industries was identified as Mr. Datuk Seri Lim Keng Yaik. The actual Minister is Mr. Datuk Peter and the Ministry has been renamed as Ministry of Plantation Industries and Commodities. Log Prices
¡¡
Pen. Malaysian meranti logs are top grade and are used for scantlings for the EU. Their prices are higher than Sarawak's. Sawnwood Prices
4.
INDONESIA Indonesia¡¯s policy on logging quota The policy on Indonesia¡¯s logging quota for natural forest this year is still being finalized. As reported by the MIS, indications were that it would be increased by about 30% from 5.6 million m3 last year. STORC created to combat illegal logging Indonesia¡¯s Forestry Minister M.S. Kaban informed that his Ministry and related agencies are committed to stop illegal logging activities by 2009. The Ministry is undertaking additional measures including trainings for the recently created ¡°forestry police quick reaction¡± (STORC) in cooperation with the Police and the Navy. The Ministry plans to train 1,500 STORC personnel within four years who will be assigned in various regions. Most of the STORC personnel were recruited from the existing pool of forestry policemen and trained in firearms and self-defence. Mr. Kaban indicated that Indonesia has lost around 30 trillion Rp (about US$3 million) per year in revenues from illegal logging activities. However, he added, the volume of illegal logs has decreased up to 80% per year after the government declared a war against illegal logging activities. Log Prices
5. MYANMAR Mixed results in teak log prices The average prices for various grades of teak logs sold by the Myanmar Timber Enterprise (MTE) at its sealed tender held on 16 December and the tender held on 19 December 2005 are shown below. Prices continued rising for veneer quality logs while those for sawing quality (SG) contracted slightly. This is relatively normal for SG-1 and SG-2 grades as prices are levelling towards the prices observed in previous months. The ?100 drop in SG-4 prices was due to variations in grading and source area and less competition from European buyers. Border trade with India India¡¯s Kitply Industries signed a contract for 1,000 tons of gurjan logs and 1,000 tons of teak logs in June 2004 ex-site Tamu (Myanmar side of the border). Only 300 tons of teak remained to be transported across the border. Kitply has faced logistic problems transporting the logs to its factories due to road hardships in India. A second contract of 20,000 tons of gurjan had to be cancelled presumably due to transportation difficulties. Border trade with Century Dragon to Thailand Myanmar¡¯s MTE has sold about 1,300 tons of teak logs to Thailand. Logs are taken through border trade-check point at Wanpon Port near the triangle area bordering Laos, Thailand and Myanmar. Logs Prices (natural forest)
Hoppus ton =
1.8 m3; All grades, except SG-3, assorted and Uncertain outlook of sawnwood industry The demand for sawn teak is good in the international market. However, a keener competition from China and Vietnam continues to draw away some purchase orders from the local teak industry. The outlook is not very positive in the local wood industry. Other hardwood logs see price hikes In December 2005, MTE increased the prices for the gurjan logs (in limited demand) and hnaw and taukkyant (in relative good demand). Analysts have reserves about the price hike as the trade of gurjan logs is sluggish and there are still enough stocks of gurjan both in Yangon and abroad. The new prices may need some time before they can have an impact on international markets. ¡¡ 6. PAPUA
NEW GUINEA Log exports reach $126.3 million Log exports from PNG amounted to 212,932 m3 (US$12.81 million) in November, bringing log exports to 2.09 million m3 ($126.3 million) in the January-November 2005 period. Saw/veneer grades accounted for 83% of the log exports. China absorbed 83% of the exports, followed by Japan (9%), Korea (3%) and Vietnam (2%). In plantation species, kamarere remains the main export species primarily to the markets of China, Japan, Vietnam and Korea. Log Prices
7.
BRAZIL Jatoba and ipe domestic prices surge Domestic prices for most species surged due to the continued declining of the US exchange rate. There were, however, real price increases for jatoba and ipe logs due to supply reductions resulting from forest management plans that remain unapproved. Law raises hopes for normalization of FMP A new law that transfers federal attributions from IBAMA to Mato Grosso¡¯s State Secretary for the Environment (SEMA) has been recently approved. The news has brought optimism to the solid-wood industrial sector of Brazil¡¯s northern states, since over 50% of its activities have been halt for lack of forest management plans (FMP) that needed the approval of IBAMA. The long delay on FMP brought to a standstill the operations of forest companies, which resulted in lay-offs and income tax losses. With the new law, Mato Grosso¡¯s SEMA will be in charge of the approval of forest management plans. It is expected that at least 30% of management plans complying with the legal requirements would be approved by the end of January 2006. After resuming forest operations, the sector hopes for a significant recovery of timber production after March 2006 and the gradual hiring of personnel fired in June 2005 after logging bans were imposed in Northern Mato Grosso. Exports of solid-wood products fell further The exports of solid wood products fell 0.4% to $2.76 billion over the January-November 2005 period, compared with the same period in 2004. In November 2005 alone, exports contracted 10% to $236,700 million with respect to the same month in 2004. The export contraction was particularly dramatic in tropical plywood exports, which halved to $15.3 million (down 54% to 35,500 m3), compared with November 2004. Export-oriented companies cut production last year due to shortage of raw material supply. In contrast, exports of pine plywood jumped 62% to $44.8 million (up 51% to 168,300 m3) in November 2005, compared with the same month in 2004. Tropical lumber exports dropped 34% to 134,175 m3 but rose 11% in value to $26.4 million, from November 2004. Exports of furniture fell 2.4% to $69.2 million in November 2005. Forest sector shows optimism for 2006 In spite of the problems faced in 2005 due mainly to the sharp depreciation of the US dollar and delays in harvesting permits, the solid-wood industry (including the wood panel and lumber segments) shows optimism for 2006. Firms believe that the Brazilian Federal Government willingness to reduce the interest rates will affect exchange rate positively, making the Brazilian industry competitive again in the international markets. Furniture Industry bets on Arab markets The Brazilian furniture sees good perspectives in the Mid-Eastern markets. An agreement recently signed between APEX (Brazilian Agency for Exports Promotion and Investments) and ABIMOVEL (Brazilian Association of Furniture Industries) creates a programme which will make available 18 million real (around $7.9 million) to finance commercial operations for accessing new furniture markets, such as the UAE, Mexico and Canada, and strengthening competitiveness at other international markets. The programme known as Brazilian Furniture gathers 181 companies of 12 states and targets exports in excess to $130 million. In early December, Brazilian furniture producers attended the trade fair Index 2006, in Dubai, UAE, considered one of the major furniture trade fairs in the region. Brazilian furniture exports to Arab countries have grown sixfold to $5.6 million from 2003 to 2004. Log Prices (domestic)¡¡
Sawnwood Prices
Sawnwood Prices (Domestic)
8. PERU Improvement of Iquito¡¯s Port is planned Peru¡¯s Ministry of Production is coordinating efforts with the National Port Company of Iquitos (ENAPU Iquitos, Loreto Region) for the improvement of the Port¡¯s warehousing, logistic, infrastructure and product shipping systems. The move was due to a petition of representatives of the Association of Timber Entrepreneurs of Loreto (AIMAL), who highlighted the problems faced by the industry in the Port. About 98% of Loreto exports are wood and wood products. AIMAL described the over-costs that the industry runs as a consequence of the lack of warehouses and reduced ship capacity (5 million of board feet). The access of large capacity ships in the Amazon River is hampered by lack of dredging. Sawnwood Prices
*Cheaper
and small-dimension sawnwood for this market.
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Source:ITTO'
Tropical Timber Market Report
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