Japan Wood Products
Prices
Dollar Exchange Rates of
30th November 2008
Japan Yen 95.56
Reports From Japan
Japan’s Forestry Plan aimed at reducing carbon
emissions
The Japan Forestry Agency recently announced its 15 year
national plan on forestry and forest industry, reported the
Japan Lumber Journal and Japan Lumber Reports. The
new plan, which will be implemented on 1 April 2009 and
subject to revision every five years, is expected to help
Japan capture 13 million tons of carbon dioxide emissions
from forest activities. To reach this target, which was set
under the provisions of the Kyoto Protocol, Japan has
make revisions to forest thinning allowances and
improvement plans for the maintenance of forests. Under
the new plan, says the Japan Lumber Journal, man-made
afforested areas will increase from 678,000 hectares to
700,000 hectares and natural forest area will expand from
870,000 hectares to 871,000 hectares.
Southsea timber market slow but expected to
turnaround
Due to the recent closure of a Japanese factory using
Southsea logs for plywood lumber manufacturing,
Southsea log imports had virtually stopped during the
month of September 2008, indicated Japan Lumber
Reports. However, with the expectation that plywood
production would be restarted by another company in
Japan, Southsea log imports for plywood were expected to
pick up when the company started operating. While supply
was not scarce for logs in October 2008, even though it
was the rainy season in the Southsea region, there were
signs that Sarawak and Sabah were experiencing problems
sending and extracting logs for export due to the weather.
In October, the yen had strengthened and global suppliers
were increasing offers to Japan.
Real estate and construction bankruptcies on the rise
A number of new bankruptcies for the construction and
real estate sector in Japan were reported in October 2008.
According to the Japan Lumber Reports, bankruptcies
amounted to JPY355.98 billion, a total larger than that
seen in August 2008. As an effect of the drop in stock
prices and bad debts, Araigumi, Inoue Kogyo, Yamasaki
Kensetsu, Noel and Dynacity have filed for bankruptcy. In
addition, real estate investment trusts (REIT) took a hit,
with New City Residence Investment Corporation
plunging into bankruptcy and assuming nearly JPY112.3
billion in debt. While this is the first case of a REIT
bankruptcy in Japan, it does not bode well for a trend that
was thought to be a promising investment opportunity.
Experts are nervous that such failures could spread to
other REIT businesses.
Plywood imports and housing starts sluggish despite
year-on-year rise
Japan Lumber Journal reported on September’s housing
starts and plywood imports. Housing starts for September
were up 54% from a year earlier (Figure 1), but have only
showed a 2.8% rise in year-to-date figures when compared
to the same period in 2007, noted the Japan Lumber
Journal. While plywood imports for September 2008
showed a 20.1% rise (Figure 2) from September 2007
levels, Japan Lumber Reports indicated that imported
plywood was weak and prices were continuing to drop due
to bearish trends for supply / demand and the appreciation
of the yen. This means that a major price slide for
imported Southsea plywood is unlikely.
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