1.
CENTRAL/ WEST AFRICA
Prices stable at high levels
There were no price changes for logs and lumber in early July. Market prices for Europe
have reached a plateau and are stable at high levels while business continues brisk.
Demand and prices for China remained firm. Many exporters were concern on available
volumes but there were good volumes (up to 30,000 m3) of secondary log species at the
ports bound for China. In Gabon, heavy
rains had hampered harvesting and transport of logs.
Cameroon reaps benefits from processing policy
There were some reports that Cameroonian sawn lumber exports were running at high levels,
in the order of 20,000 m3 per month through Douala port. Cameroon's policy over the past
three years of phasing out log exports of major species and quickly developing further
processing was implemented at exactly the right time scale in the development of the
market. There was
resistance to the implementation of the new policy but it had proved highly successful and
now is being emmulated by Gabon.
South African buyers remain active
Demand for sawn lumber and products from Asian traders seeking new sources of supply is
good but availability still appears to be limited. As reported by the TTM Report, some
major South African importers had quickly changed their supply base from Asia to West
Africa, mopping up a sizeable proportion of available volumes of sawn and processed
lumber.
No Liberia exports despite lifting of ban
Liberia's Forestry Development Authority (FDA) welcomed the lifting of the timber import
ban from the country by the UN Security Council (UNSC) (see TTM Report 11:12). FDA,
however, informed that nobody in the country was allowed to produce logs or sawnwood for
export since no one was holding a concession in Liberia. Anyone caught exporting logs or
sawn timber would be considered in violation of the Executive Order No.1 and the law. The
FDA, through the Forest Monitoring Committee (FRAMC), is planning to submit a draft bill
on the exportation of logs and sawn timber
from Liberia to the National Legislature.
Race Wood calls on buyers to source in Africa
Race Wood, a programme of the ACP countries (Africa, Caribbean & Pacific) and the
European Commission for the promotion of investment and transfer of technology, has
announced Race Wood 2006 which will offer European timber companies the opportunity to
meet leaders of some 50 timber producing companies from West Africa and the Congo Basin,
in Accra, Ghana on 6-8 December 2006. The objective of Race Wood is to help put in place
relations between European and African
companies in the downstream timber processing sector. Race Wood 2006 sees that the
procurement of high quality tropical timber is gradually declining due partly to ongoing
efforts against illegal logging in two of the world's leading producers of tropical timber
products,
Indonesia and Brazil. These efforts are having restrictive consequences for the European
market, including:
• Production and export volumes in producing regions have declined.
• Prices for popular timber products have increased substantially as demand exceeds
supply, particularly for hardwood plywood, glue-lam (e.g., 72x86), dark red meranti
sawnwood and mouldings, and bangkirai and ip¡§?decking products.
Race Wood 2006 will offer an opportunity for European timber importers looking to replace
dwindling supply from Asia and South America to meet up with major suppliers of African
timber.
Three logging companies join WWF´s CAFTN
Three major logging companies in Cameroon (Groupe Decolvenaere, Pallisco and
Transformation Reef Cameroun) have joined the WWF's Central Africa Forest and Trade
Network (CAFTN). The move places up to 700,000 ha of natural forest under a sustainable
management regime, paving the way for obtaining FSC certification. The three logging
companies are the first in the region to join the newly launched CAFTN. The network
provides technical assistance, monitors progress and provides market links to purchasers
of legally produced and certified products.
Progress in certification/legality in the Congo Basin
On the occasion of the Congo Basin Forest Partnerships (CBFP) meeting on 22 June 2006 in
Paris, the French Ministry of Foreign Affairs and the InterAfrican Forest Industries
Association (IFIA) organized a meeting on the theme ¡¡ãCertification and legality in
the Congo Basin timber sector: State of play and perspectives¡¡?on 21 June.
Mr. Herv¡§?Bourguignon, General Secretary of IFIA, praised the rapid expansion of
forests undergoing the process of sustainable management in the Congo Basin, corresponding
to about half the total area allocated to forest concessions in 2006. He regretted,
however, that the application of the management plan relied on the commercialization of
secondary species which were not yet accepted by markets at profitable prices. He
expressed concern about the rapid reduction in profitability of forestry companies in the
Congo Basin as a result of increasing forest taxes, fuel prices and the costs of
sustainable management (education, drinking water, electricity for local communities). In
terms of legality, 5 million ha of concessions had obtained certificates of legality and 5
other million were committed to this process.
Bernard Cassagne of Forest Resources Management (FRM) compared forest management policies
in Brazil and the Congo Basin. In Brazil, the management inventory was carried out in the
cutting parcel and not throughout all the concession, preventing an appreciation of all
the ligneous potential. He said that, overall, in terms of forest concession management,
the Congo Basin
had the most experience and was the most in line with the concept of sustainability.
Nevertheless, the social aspects were better dealt with in the Brazilian Amazon, although
the population densities were much lower than those prevailing in the Congo Basin.
2.
GHANA
3. MALAYSIA
Malaysia extends export ban to finger-joint sawn
On 11 July, the Malaysian government announced further measures to ban the export of sawn
rubberwood amid fears that the harvesting of rubberwood had outpaced replenishment.
The ban covers export of finger-jointed rough sawn rubberwood with thickness and/or width
of more than 2.5 inches and with up to two joints. The ban also covers sawn rubberwood
with joining pieces of less than 1 foot, while the length of the finger-jointed rough sawn
rubberwood should not be more than 10 feet. The ban, which is an additional measure to the
rubberwood sawnwood ban imposed on 28 June 2005, will come into effect on 11 August 2006.
The shortage of rubberwood in Malaysia may worsen in the coming months as rubber latex
prices rise together with those of synthetic rubber in tandem with oil prices. Rubber
latex prices are already at a 20 year high, exacerbating plantation operators¡¯ and
owners¡¯ reluctance to harvest timber as long as prices of rubber latex remain bullish.
Another factor compounding the rubberwood supply shortage is the recurrence of the forest
fires and burning in Indonesia (see below). The haze that threatens to blacken the region
may affect the yield of natural rubber latex, thus, pushing rubber latex prices further
up.
4. INDONESIA
Slash and burn season fuels fires in Indonesia
Indonesia is once again struggling to contain seasonal forest fires that could choke its
nearest neighbours. The fires originate from the annual slash and burn activities
conducted by plantation owners and farmers across Indonesia.
Senior officials of the Forestry Ministry and Ministry of the Environment informed that
600 such fires were detected by satellites, mainly in Sumatra and Kalimantan. About 58% of
the fires were detected inside of forests. Of these, 34 hot-spots were in protected and
conservation forests while about 400 were located within logging concessions and
industrial timber estates. At least 300
hot-spots were detected in Riau province, another 150 or more in Sumatra, and at least 50
in Kalimantan.
Business braces for another fuel price hike
The Indonesian business community fears another round of fuel price hikes as Indonesia's
crude oil imports jumped 39% to 382,000 barrels per day in June. Indonesia, a member of
OPEC, is a net-importer of crude oil.
5.
MYANMAR
Teak trade remains robust amid weak processing
The trade of teak logs remains robust and the market active. However, the processing of
teak into sawnwood or other processed products continues to be weak.
With regards to other hardwoods, the MTE has raised pyinkadoe prices for direct sales from
10 July 2006, despite trade for this species being comparatively less active. Prices (per
hoppus ton) were raised to $500 for East Bago (up from $480), $490 for West Bago (up from
$470) and $470 for other areas (up from $450). Sales of gurjan remain fairly active,
especially for fresh logs.
6.
PAPUA NEW
GUINEA
7. BRAZIL
SEMA
actions drive prospects for solid-wood sector
After six months of adjustment under the new forest management actions by the
Environmental Secretary of State (SEMA), the solid-wood sector of Mato Grosso has high
expectations for the second half of 2006. The sector has faced difficulties since 2005
when the Curupira Operation was launched to crack down on illegal logging activities in
the Amazon, resulting in the arrest of illegal
loggers and IBAMA and former FEMA (Mato Grosso¡¯s Environmental Foundation) officers as
well as the confiscation of illicit timber.
The solid-wood sector, the main economic engine in Northern Mato Grosso, is reported to be
making some improvements under the new SEMA's environmental management (previously done by
IBAMA). The sector, which accounted for 10,000 lay-offs in 2005 and more than 1,400 in the
first semester of 2006, has shown a positive balance of hiring versus lay-offs over the
last two months.
The Solid-wood Industries Union of Northern Mato Grosso (SINDUSMAD) expects a gradual
improvement of the employment as the sector recovers.
Ministry resumes issuance of ATPFs
The Ministry of Environment has made available Wood Transportation Licenses (ATPFs) at the
Acre Environmental Institute (IMAC). The announcement followed warnings from firms from
the solid-wood sector and sawmills in the Northern Acre that if the suspension of forest
management plans and forest product sales lasted 30 more days, it would result in state
wide bankruptcies. The suspension was part of IBAMA's Novo Empate Operation that resulted
in the arrest of operators and public officers involved in ATPF laundering. However,
timber companies operating legally were also affected in the process. Solid-wood companies
that had submitted ATPF requests on time would be the first to receive timber transport
authorizations.
Furniture sector records further decline in exports
Brazilian furniture exports declined in May for the fifth consecutive month. The
cumulative exports from January to May reached $369.1 million, down 11% from the same
period in 2005. The 11% loss in furniture exports contrasted with the 5% gain experienced
by the sector in 2005. The decline was again due to a 25% drop in imports from the USA as
a result of the sharp appreciation of the Brazilian currency against the US dollar. USA is
Brazil's main market, accounting for one-third of the exports. Of the top ten export
markets, five showed increased exports, notably Argentina (up
41% to $24.4 million).
The key furniture Santa Catarina cluster of Sao Bento do Sul has been particularly
affected by the appreciation of the real over the past several months. Its furniture
exports fell 22% to $147.6 million in the period under review. The share of the cluster in
the Brazilian furniture exports fell 5% to 40%. Market experts do not see a way out from
the crisis in the short term. An alternative highlighted by some companies was to seek new
customers in South American markets, given the geographic proximity of these markets.
8.
PERU
US
dollar dips to 7-year low
The US dollar fell to 3.21 Peruvian soles in early July, a seven-year low. The Banco
Central de Reserva (BCR, Central Reserve Bank) intervened by buying over $360 million, but
this had a limited effect on the exchange rate. The weakness of the US currency is due to
increasing exports and overseas remittances from Peruvians living abroad.
Increased US demand for solid hardwood flooring
There has been increased demand for hardwoods products such as tongue and groove flooring
and decks in recent months in the USA. In addition, demand for hardwood sawnwood of
species such as cumaru, massaranduba and cabreuva for carpentry construction work has also
firmed.
CITES spares mahogany from RST
CITES Plants Committee and Mahogany Working Group met on June 29 - July 8 in Lima, Peru.
The Committee adopted a recommendation from the report of the Bigleaf Mahogany Working
Group, agreeing not to subject the species to the Review of Significant Trade (RST), a
mechanism for reviewing biological, trade and other information pertaining to endangered
species. The Committee agreed to investigate the high volume of bigleaf mahogany imports
to the Dominican Republic.
Meanwhile, the discussion of a proposal to include Spanish cedar (Cedrela odorata) in
Appendix II was postponed.
MFI to assist in combating illegal logging
An independent forest-monitoring system (MFI) for Peru will be designed by the NGO Global
Witness to support the efforts by INRENA and the Multi Sector Commission Fighting Illegal
Logging (CMTLI). The objectives of the MFI were presented at the ¡¡ãIndependent Forest
Monitoring¡¡?workshop held in Lima in early July. Besides seeking to reduce illegal
logging, authorities expect that MFI would motivate forest companies to operate in a legal
frame. The workshop also discussed the
current forest situation in Peru for an effective implementation of the system. This
system is reportedly to have been implemented in Cameroon, Ghana, Mozambique, Cambodia and
Honduras.
9. BOLIVIA
10. Guatemala
11. Guyana
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