2. GHANA 

  Higher costs pushing up timber prices
The timber market has remained quiet during the Christmas Holiday season. In addition, the announcement of 25 ¨C 30% fuel price increase in the first week of January 2011 has slowed down the timber trade.

Under the prevailing situation, timber operators are facing difficulties in stabilising their business and meeting market demand. Faced with a shortage of raw material, a hike in fuel prices and higher operational costs due to higher electricity and water tariffs imposed by the Public Utility Regulatory Commission (PURC) last year, producers are likely to pass on these costs to the consumers, thereby pushing prices of timber products up.

 Inflation eased in December
The inflation rate fell to 8.58% year-on-year in December 2010, down from 9.08% in November 2010. The rate is the lowest since June 1992, when it stood at 8.4%. According to the Ghana Statistical Service, the impact of the recent fuel price hikes on future inflation will depend on how different sectors respond to the petroleum price increases. Timber producers are trying to pass on the increasing fuel prices to consumers but are facing resistance from both the international and domestic markets.

In terms of economic growth, the World Bank has projected that Ghana will be the fastest growing economy in Sub-Saharan Africa, with a growth rate of 13.4% in 2011 and 10% in 2012. According to the World Bank, Ghana is in position to register strong economic growth particularly in the construction sector as large infrastructure projects are being implemented.

3. MALAYSIA 

Korea imposes anti-dumping duties on Malaysian plywood
The Korean Trade Commission (KTC) has imposed anti-dumping duties ranging from 5% to 38% on plywood imports from Malaysia for a period up to 3 years. However, the duties have been reduced upon appeals made by Malaysian plywood manufacturers and exporters. The imposition of the duties was postponed in August after the appeal made by the Sarawak Timber Industry Development Corp (STIDC) and Sarawak Timber Association (STA). The anti-dumping duties will be imposed within 50 days after the decision made on 15 December 2010.

Anti-dumping duties have been imposed on eight Sarawak plywood suppliers including Subur Tiasa Plywood Sdn Bhd with the anti-dumping duty of 5.12%, while the duty of 6.43% was imposed on Jaya Tiasa Timber Products Sdn Bhd, Hwa Sen Veneer and Plywood Industry Sdn Bhd.

An anti-dumping duty of 9.75% has been imposed on 5 companies of the Shin Yang group: Shin Yang Plywood Sdn Bhd, Forescom Plywood Bhd, Menawan Wood Sdn Bhd, Shin Yang Plywood Bintulu Sdn Bhd and Zedtee Plywood Sdn Bhd.

The highest anti-dumping duty of 38.1% has been imposed on Sabah-based Sinora Sdn Bhd while the duty on all other Malaysian plywood manufacturers and exporters has been set at 8.76%.

The variation in the imposition of the anti-dumping duties is due to the different selling prices and types of wood used. This is the first time anti-dumping duties have been imposed on Malaysian plywood in the international markets.

Republic of Korea imported 530,000 cu.m of panel products from Sarawak in 2010, worth RM570 million.

High price levels retained
The monsoon season continues to hamper log supply in Sarawak driving prices up. Prices are expected to remain high until the Chinese New Year in early February, following which log production is expected to resume to normal.

The other factor pushing prices higher is the continuing strong demand from China and India. China¡¯s demand for logs has increased worldwide since Russia, China¡¯s largest log supplier, imposed an export tariff on log exports. India¡¯s demand may be attributed to a steady rise in corporate capital expenditure for most part of 2010. This rise in corporate capital expenditure is expected to continue into 2011.

Prices of plywood from Sarawak surged 8% to 14% in 2010 on the back of sustained demand from Japan which increased 12.1% in the first 10 months of 2010 compared to the same period in 2009. Plywood manufacturers are also optimistic that 2011 will be a profitable year if the current price levels are maintained or improved.

Plywood manufacturers are optimistic that the housing starts in 2011 in Japan will be strong enough to support current price levels. The Japan housing starts in 2010 rose 20.4% in August, 17.7% in September and 6.4% in October, vis-¨¤-vis the same months in 2009. Building permits for October 2010 increased by 3.4% compared to the same month in the previous year. However, the housing starts and building permits in 2010 in Japan remained far behind the levels recorded in 2008.

In support of the local timber industry, the Sarawak Forestry Department is likely to extend the 50% log export quota which is expiring in mid-2011.

Malaysian exporters seek market opportunities in India
India is the third largest export market for Malaysian timber products estimated at RM1.3 billion in 2009. According to exporters, timber product exports to India have doubled during the last three years.

Malaysian timber producers are planning new ventures and investments in India to increase their market share in the Indian market.

4. INDONESIA  

  Implementation of 2-year moratorium postponed
The 2-year moratorium planned to be implemented on 1 January 2011 in Indonesia has been postponed. Various ministries in the country are still trying to reach consensus and consolidate details of the requirements of the 2-year moratorium on new permits to convert natural forests and peatlands. The views differ on how much and which types of forests should be covered in the moratorium. In addition, there is no consensus on whether current forest concessionaires will be permitted to clear any forest or whether they will get any compensation in lieu of.

Two contrasting drafts for the moratorium have been submitted to the Indonesian president for approval. While the Ministry of Forestry seeks to enforce only a ban on new permits to clear primary forests and peatlands, the Indonesian Presidential Delivery Unit calls for the inclusion of secondary forests, the review of existing permits and the extension of the moratorium beyond 2 years. The Presidential Delivery Unit also proposed incentives and land swaps to be included as a form of compensation to existing permit holders.

The Ministry of Forestry has identified 35 million hectares of land for business development. To date, 9 forest plantation companies have submitted proposals to develop 320,000 hectares of plantation forests. Any permit to develop these land areas depend on the formalisation of the moratorium. The proposed moratorium will protect up to 43.8 million hectares of natural forests and up to half of the 20 million hectares of peatlands in the country. Indonesia aims at reducing greenhouse gas emissions by 26% before 2020.

Forestry project budget for 2011
The Ministry of Forestry has earmarked Rp.2.5 trillion of the total of Rp.6.0 trillion project budget in 2011 for priority programmes such as forest rehabilitation, enhancement of river watershed areas, forest fires control and conservation of biodiversity.

The project budget proposed for 2011 comprises 402 programmes and activities to be executed by 46 central working units, 185 technical working units and 171 working units in the provincial and regency levels.

Higher timber prices on the back of robust growth in property demand
Prices of Indonesian timber products and other building materials are expected to increase in 2011 as property development in Indonesia is projected to grow between 20% to 30%.

Housing demand in Indonesia has reached 8 million new units per year as the Indonesian economy continues to recover and purchasing power improves. The interest rates for housing loans, known as housing credits (KPR), have dropped to 10% ¨C 11% and this has boosted housing activity in the country.

5. MYANMAR

  Markets remain slow
The holiday season has slowed down trade in timber. With the arrival of fresh logs, the market situation for teak and pyinkado has improved to some extent. However, the sluggish demand for gurjan has persisted.

Purchases of Myanmar teak by country in December
Purchases of Myanmar teak logs by country during December 2010 were as follows: Thailand (2 buyers, 212 Hoppus tons), Singapore (2 buyers, 132 Hoppus tons), India (1 buyer, 65 Hoppus tons), and Hong Kong (1 buyer, 47 Hoppus tons). In the domestic markets there were three buyers, with timber sales totalling 151 Hoppus tons in volume.

6. INDIA  

  Industrial growth eases
The growth of India¡¯s industrial output eased slightly from 58.4 points in November to 56.7 points in December 2010 due to slowing demand from developed countries. However, exports from the beginning of the fiscal year to date were up 26.5% while imports increased by 11.2% compared to the same period last year.

GDP growth from the beginning of the fiscal year to date was 8.9%.

Exports of plywood and panels
While overall Indian exports are registering growth exports of wood-products have declined. The following table presents exports of plywood and panels in the fiscal 2009-10 and 2008-09.

Imports of hardwoods
In the period April ¨C October 2010, a total of 1,780,427 cu.m of logs (excluding teak) were imported through Kandla port. The following table presents hardwood log imports through Kandla port for the period.

Plywood imports from China pose stiff competition to local manufacturers
Shortages of power, labour and peeling grade logs continue to hamper plywood production in India. Imports of veneers have continued and kept plywood mills running as demand is good. However, imports of plywood and other panel products from China are providing stiff competition to local plywood manufacturers.

Active auction sales in government depots
Timber auction sales in Central and Western Indian Government depots have been active with sales totalling 10,000 cu.m of hardwood logs.

Since prices of imported teak are increasing, the impact on depot sales is also apparent. Prices were up by 15% to 20% compared to previous auctions. Long length teak logs fetched Rs.2000-2200 per cu.m, medium quality Rs.1500-1700 per cu.m and lower grades were priced at Rs.900-1000 per cu.m.

The hardwoods like Adina, Laurel and Pterocarpus marsupium (kinowood) fetched Rs.800-850 for select qualities and Rs.325-400 for lower grades. Demand is good for these species, but supplies are very limited due to conservation and effective control by the Forest department.

Kerala afforestation programmes receive UN recognition
The afforestation programmes implemented by the State Forest Department in the state of Kerala including Ente Maram Padhathi (My Tree Scheme), Haritha Keralam (Greening Kerala), Haritha Theeram (Greening the Coast Programme), Vazhiyorathanal Thanal (Road-Side Planting of Shade Trees) have received recognition from the UN for effective management of these innovative initiatives.

 As part of the programmes, a total of 18.7 million saplings have been distributed and planted across the state, contributing to the 'Plant for the Planet: Billion Tree Campaign' of the UNEP.

7. BRAZIL  

  Brazilian furniture exports on the mend
According to the Association of Furniture Industry of Rio Grande do Sul (Movergs), furniture exports from Rio Grande do Sul in 2008 were valued at US$289 million, accounting for 30% of the total Brazilian furniture exports. Due to the economic downturn and exchange rate fluctuations, Rio Grande do Sul furniture exports went down to US$200 million in 2009, representing 28% of the total furniture exports of the country.

According to the Ministry of Development, Industry and Foreign Trade (MDIC), Brazilian furniture exports declined between 2006 and 2008. However, exports increased in 2010 in line with Brazil¡¯s robust economic growth.

In the first half of 2010, Brazilian furniture exports amounted to US$367 million, up 16.9% from the same period in 2009, according to the Secretary of Foreign Trade (Secex). However, Rio Grande do Sul registered the lowest rate of growth in exports of only 5.5% compared to the first half in 2009. Santa Catarina is the leading state in furniture exports followed by Rio Grande do Sul.

Timber production declining in the Amazon
From 2004 to 2009, timber production in the Amazon natural forests declined by almost 50%, from 24.4 million cu.m to 14 million cu.m. Following greater consumer awareness regarding the environmental values of natural forests, large manufacturers in the furniture and construction sectors have shifted to less risky options in wood supply such as eucalyptus.

The depreciation of the US dollar has had a negative impact on exports and commodity prices. In addition, stricter governmental control, monitoring and efforts in combating illegal forest activities are the factors contributing to the decline in timber production. In 2010, revenue from logging in the Amazon was US$2.5 billion. The number of sawmills decreased by one third and jobs in the forest sector dropped from 344,000 to 203,000.

Logging in the Amazon is mainly conducted using tractors and cables causing damages to the remaining forests. One fifth of sawnwood in the Amazon is produced at low quality by small-size sawmills which lack proper tools and training. As a result, timber yield is only at 28% to 45% of the logs processed and the rest is waste. Most of the logs (72%) are processed into rough sawnwood, from which only 22% is exported mainly to the US. In the domestic market, the state of Sao Paulo is the main consumer, accounting for 17% of the demand.

Deforestation monitoring system for the Amazon
The Amazon Institute of People and the Environment (Imazon) has developed a new system of assessing the risks confronting forests. A mathematical model combining factors, such as soil type, composition of forests, socio-economic aspects, and satellite monitoring data has been set up.

The model shows that till July 2011, some 3,700 square kilometers of forested area will be threatened by deforestation, 67% of which will be located in Par¨¢, which has the highest rate of deforestation in the country. Some 13% of the threatened area is located in the state of Mato Grosso.

According to the study, roads are the major factor causing deforestation. Regions close to BR-163 highway, linking Cuiab¨¢ (MT) to Santarem (PA) in the Amazon, are the areas most threatened by deforestation. The study also assessed the existence of roads constructed illegally by loggers and land speculators. According to Imazon, thousands of miles of these roads have been constructed in the forests.

Most of the threatened forests (59%) are on private land or under some kind of land use. This is followed by the agrarian reform settlements which account for 25% of the threatened forests. On the other hand, the risk is lower on indigenous lands, which represent 4% of the total threatened areas.

EU funding for reducing deforestation in Par¨¢
The state of Par¨¢ in the Brazilian Amazon which has the highest rate of deforestation in the country, will receive funding from the European Union (EU) to combat deforestation and greenhouse gas emissions. The Ministry of Environment of Brazil (MMA) signed an agreement with the EU, for a Euro 4.9 million project to be implemented in São Felix do Xingu in Par¨¢ state.

The three year project will be implemented by the MMA, with technical support from FAO in partnership with the Environment Secretariat of Par¨¢ State and the Municipal Environment and Tourism Secretariat of São Felix do Xingu.

8. PERU 

  Determining the national export quota for mahogany
The Ministry of Agriculture (Minag) has formulated actions to strengthen coordination mechanisms between the Management Authority and the Scientific Authority of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in Peru for the determination and implementation of the national export quota for mahogany (Swietenia macrophylla) that has been included in Appendix II of CITES.

The general forest management plans (PGMF), annual operating plans (POA), timber harvesting permits and annual performance reports shall be submitted by the concession holders or native communities to the Regional Forestry and Wildlife Authority for approval. After the approval, the information will be forwarded to the CITES Management Authority of Peru.

The national export quota for mahogany is revised by the CITES Management Authority of Peru every year after 31 May, the expiry date of each annual quota.

OSINFOR steps up supervision on concessions, permits and authorisations
The Agency for Supervision of Forest Resources and Wildlife (OSINFOR) carried out 602 supervisions in 2010, a significant increase compared to previous years. The focus of supervisions was on concessions, permits and authorizations.

The progress is attributed to the strategic alliances with indigenous communities, forest concessionaires and government agencies. In addition, 11 OSINFOR offices have been established in various regions of the country: Loreto (3 offices), Madre de Dios (2 offices), Ucayali (2 offices), San Mart¨ªn, Lambayeque, Huanuco and Junin.

Congress debate on draft law deferred
The draft Forestry and Wildlife law was not debated in the Congress in December and it will be discussed in the next term from March to June. The new Forestry and Wildlife law is needed to fulfil the conditions of the Free Trade Agreement (FTA) with the United States. If the law is not passed, the FTA will be at risk of being cancelled.

9. GUYANA  

  Timber trade remains quiet following holidays
During the period under review, there were no exports of greenheart logs. Prices for Purpleheart and Mora logs retreated. The major destination for these logs is the Asian market.

For sawnwood, undressed greenheart fetched favourable prices for all qualities except sound quality. Undressed purpleheart prices hit US$890 per cu.m in select quality while undressed mora prices continued to hold. However, prices for dressed greenheart and purpleheart were slightly down in the period under review.

Guyana¡¯s Washiba (Ipe) attracted an average price of $US1,150 per cu.m. Dressed bulletwood (Macaranduba) reached US$954 per cu.m, dressed kabukalli (Cupiuba) US$975 per cu.m and undressed locust (Courbaril) US$1,166 per cu.m with the Asian, Caribbean and North American markets being the main destinations.

Roundwood and fuelwood made notable contributions to the total export earnings with favourable prices in this fortnight period. Splitwood prices also held on a high level of US$956 per cu.m.

For the period under review, exports of value-added products were limited. Some products such as doors and mouldings made from crabwood (Andiroba), locust (Courbaril), kabukalli (Cupiuba), purpleheart (amarante) and tauroniro (Cumaru) contributed to total export earnings.

 Related News:

• International Log & Sawnwood Prices (01-15,Dec 2010) 

• International Log & Sawnwood Prices (16-30,Nov 2010) 

• International Log & Sawnwood Prices (01-15,Nov 2010)