Get Your Quotation Now ! 

  Home:  Global Wood   Industry News & Markets

International Log & Sawnwood Prices

01-15th June 2007


West African prices remain flat
The backup in log stocks, due to the recent severe curtailment in shipments to China, has impacted production forests. Although the major species affected is okume, other lesser volume secondary timber is not being accepted for shipment. Some producers have ceased logging many species including andoung, faro dabema, and okan, until the situation is clearer and normal buying is resumed. Sellers are looking hard for alternative markets that have been neglected over the past few years. Morocco, Turkey and some European countries are being targeted, but are subject to tough price negotiations.

The notable decline in demand from Spain in the past year (TTM 12:10) is of concern to West African producers and the sudden end to Spain's building boom will likely have a negative impact on log and lumber consumption in the medium-term. China and India were active in the Spanish market, and are now a factor to be reckoned with.

Producers with plywood and sawmill facilities are stepping up production to assist in using logs previously earmarked for export. As a result, prices for downstream products have held firm. However, with the European vacation period about to start in July, some producers are uneasy about the current market and are fearful of a dramatic fall in demand.


Ghana*s approves more contracts in first quarter
The Contract Section of the Forestry Commission*s (FC) Timber Industry Development Division (TIDD) processed and approved a total contract volume of 188,867 m3 during the first quarter of 2007. This represented a 40.92% rise compared to the previous quarter (Oct-Dec.2006). Plywood contracts alone during the quarter under review, recorded at 88,151 m3, represented 46.67% of the overall total contracts processed and approved. Plywood was the leading product for contracts during the quarter under review, moving lumber to second place.

The number of furniture parts approved during the quarter fell 36.90% from the previous quarter. A total of 26,430 pieces of furniture parts were approved in 2007 under the quarter under review, compared to 41,884 pieces processed and approved during the last quarter of 2006. The reduction was attributed to the high orders placed by buyers during the previous quarter.

With the exception of mouldings and processed lumber, which dropped sharply by 40.67% to a low of 3,994 m3, almost all wood products recorded increases in volume. Volumes of finger-jointed, parquet flooring, dowels, rotary and sliced veneer increased by 101.15%, 65.28%, 75.06%, 20.85%, and 2.0%, respectively compared with previous quarter figures. Teak poles, logs, and billets increased by 54.24% from the previous quarter to 12,333 m3 during the quarter under review.

Prices for Ghanaian logs mixed during first quarter
Prices had been firm during the January-March 2007. With the exception of odum, for which buyers were finding difficult to meet TIDD Guiding Selling Prices (GSP), prices for sapele, makore, utile and mahogany (Ivorensis) increased.

Prices rose between EUR25 and EUR55 per cubic meter for kiln dried sapele, makore and utile lumber to the European market, depending on the specification. There was an increase of between US$20 and US$40 for kiln dried mahogany lumber to the United States, the main destination of the product. With the persistent increase in prices of mahogany, most buyers in Europe had switched to importing edinam. During the last month of the quarter under review, prices of edinam contracts (kiln dried lumber) for the European market rose as much as EUR98 for random specifications. It was anticipated that more contracts would be submitted for edinam in the second quarter.

Submission of contracts for mixed redwoods, comprising of edinam, danta, candollei and mahogany (Grandifolia and Anthotheca), to the Middle East market slowed during the quarter under review. However, prices of the product rose significantly from an average price of US$340/m3 to an average of US$370/m3.

For the first time okoume, a traditional species in Cameroon, was exported from Ghana. The species was imported by Pyramid Veneer Company Limited in Cameroon, manufactured into curl veneer, and re-exported to Europe at a higher price of EUR12.48/m2, EUR11.93/m2 and EUR8.10/m2 for Grades One, Two and Three, respectively.

Prices of ceiba rotary veneer continued to increase during the last month of the previous quarter. The 4.2mm price, which experienced downward trend for most of 2006, improved to an average of $300/m3 from the previous quarter average of $270/m3.

Ghana*s export permits increase slightly
Two thousand and sixty-one export permits were vetted, processed, approved and issued to exporters during the first quarter of this year to cover the shipment of various wood products through the ports of Takoradi and Tema as well as overland exports to neighboring countries. The corresponding figure of total export permits issued for the previous quarter (2006) was 1,999. This showed a marginal increase of 3.52% in the number of permits issued for wood products exports during the first quarter of this year.

Two hundred and twenty one (221) permits were granted to 12 companies to export plywood and lumber by road to Burkina Faso, Nigeria, Niger and Togo. Companies which were engaged in overland exports included Ghana Primewood Products Ltd (GAP), John Bitar & CompanyLtd (JCM), Naja David Veneer & Plywood Company Ltd (NDVP), Samartex Timber & Plywood Company Ltd
(SAX), Bibiani Logging & Lumber Company Ltd (BLLC) and Ayum Forest Products Ltd (AFPL).


Malaysian efforts bring illegal logging cases down
According to the Malaysian Ministry of Plantation Industries and Commodities, there has been a significant reduction in the number of illegal logging incidents in Malaysia. This is due to a number of ongoing efforts to curb illegal logging, including through curbing the transboundary movement of illegally traded logs and by enhancing transparency by promoting legally and sustainably sourced timber.

Malaysia has also embarked on negotiations with the European Union for a Voluntary Partnership Agreement (VPA), which is part of the EU*s Forest Law Enforcement, Governance and Trade (FLEGT) scheme. Deputy Minister Datuk Anifah Haji Aman and Malaysian legislators have also attended the recent G8 Illegal Logging Dialogue, organized by GLOBE International, to show Malaysia*s commitment to addressing illegal logging. The dialogue was held to discuss and agree on practical policies as well as actions to address the global problem of illegal logging and poor forest management.

French Buying Mission focused on wood-based products
Business deals worth a total of RM35.2 million are expected to be secured between Malaysian wood-based companies and clients from France, as a result of the twoday French Buying Mission 2007. Malaysia External Trade Development Corp (Matrade) Deputy Chief Executive Officer, Wong Lai Sum, said RM5.3 million in sales have been confirmed so far, and noted that the buying mission would help small and medium scale enterprises to network and market their products.

Thirteen French businessmen from 11 companies have taken part in a trade mission organized by Matrade and held one-to-one business meetings with 65 local timberbased companies. A total of 253 business meetings were arranged, exceeding the initial target of 154. Among the products sourced during the mission were sawn timber, plywood, wood mouldings, wood floorings and indoor and garden furniture.

France is Malaysia*s fourth largest trading partner among the European Union countries, and wood-based products are Malaysia*s fifth largest export component. Bernama indicated that the country's exports of wood products to France amounted to RM104.9 million in 2006. The news agency also reported that Malaysia exported RM34.3 million worth of wood-based products to France in the first quarter of this year.

Malaysia expands presence in Middle East markets
Exports of major Malaysian timber products to markets in the Middle East continued to expand, with the oil-rich Gulf Cooperation Council (GCC) countries accounting for the major share of exports.

The GCC comprises of the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Bahrain, Qatar, and Oman imported about US$288 million worth of timber products, which accounted for 78.4% of Malaysia's total timber products exported to the entire Middle East for the January-November 2006 period.

The UAE topped the list for the 2006, importing US$159.2 million worth of timber products, followed by Saudi Arabia US$59.2 million, Kuwait US$34.1 million, Bahrain US$12.1 million, Qatar US$16.3 million and Oman US$7.1 million. The two other major Arab markets were Jordan, which imported US$31.5 million worth of timber products during the 2006 period, and Yemen, which bought US$31.8 million worth of products.

According to Malaysian Timber Council*s (MTC) regional office in Dubai, the current boom in the building construction and real estate sectors of GCC countries resulted in high demand for wood-based products and furniture. Total value of projects reached an all-time high due to a GCC-wide construction boom undertaken by both the public and private sectors, where total active projects in Bahrain alone are estimated at US$27.43 billion.

Jaya Tiasa to expand plywood production
The publication Wood Based Panels International and The Star newspaper reported that Jaya Tiasa Holds Bhd would expand its plywood production capacity over the next few years. The company, which held approximately 710,000ha of timber concessions in Sarawak, planned to invest RM155 million (US$1.5million) in operations, including on a new plywood production line. The new line was
expected to increase production capacity by at least 5,000 m3 per month. The company was maintaining a positive outlook on the marketing of its products, as it expected the higher cost of Russian imports to stifle competition from China.

Malaysia braces for La Nina
Storms from La Nina atmospheric conditions inundated the city of Kuala Lumpur early this month. If effects of La Nina continue to impact Malaysia during June and July, the country can expect a repeat of the widespread flooding and the massive destruction that occurred between December 2006 and January 2007. Timber prices during that period rose and broke all previous records in Malaysia  and Indonesia. However, prices of most Malaysian timber products have remained steady at present.


Forestry minister launches reforestation scheme
Antara news agency of Indonesia reported that Indonesian Forestry Minister MS Kaban distributed one million ※sangon§ young trees to residents in Tanah Datar, West Sumatra, as part of a national reforestation program. The minister conducted a working visit to the districts of Tanah Datar and 50 Koto, and explained the strategy for involving the local community in the reforestation scheme. He noted that farmers could plant the sangon seedlings around their houses, in an effort to alleviate the strain on deforested and arid lands. He added that the government would plant three million sangon seedlings until the end of 2007, and five million in 2009.

Walhi urges implementation of ※forest cutting interval§
The Indonesian Forum for the Environment (Walhi) is urging the Indonesian federal government and all regional administrations to implement a ※forest cutting interval§ to protect the country from total deforestation, reported Walhi, which had been calling for the interval since 2002, said that 62% of the country*s land was forest covered, but forest lands were facing increasing pressure due to development and economic expansion. As a result, the executive director of Walhi, Kalid Syaifullah, suggested a forest cutting interval to alleviate pressure on forests by initiating a 15 year period during which no new forest concessions would be issued or existing forest concessions extended.

Realizing that the interval would result in wood supply shortages, Walhi suggested the country import more timber. The group also noted that during the forest cutting interval period, the performance of forest industries should be checked and efforts made to save forests through reforestation. The government should also help those people whose livelihood had depended on forest-cutting activities, Khalid said.

Recent crackdowns on illegal logging had caused hardships to small family or community owned furniture manufacturers, which depended on forest-cutting activities for their raw materials. Increasingly, importing countries were turning away from Indonesia and Malaysia as raw material supply became a major issue, and were turning to Vietnam as an alternative supplier of both household and office furniture. The countries in Indo-China, e.g. Vietnam, Cambodia and Laos, were expected to overtake both Malaysia and Indonesia within the next five years as major suppliers of agricultural and timber-based products to the international markets.

Log stocks stay at low levels
The Japan Lumber Journal reported that factories in Indonesia were keeping log stocks at low levels, due to frequent rain and lack of smooth operations. Although the number of contracts showed price increases for 12mm products such as plywood, Japanese demand in general is


Demand for teak and gurjan logs remains strong
Although demand for teak logs was strong, the available supply of teak logs were of low grades. Gurjan logs were also selling well, and would mostly be used for veneer peeling and flooring. On the other hand, most orders for sawn teak could not be met because of low raw material supply. For pyinkadoe logs, the market was moving slowly, especially since logs from last season were not in
high demand.

The pyinkado log market remained sluggish while the market for gurjan logs continued to be firm.


Impacts of forest law to be felt in 2007
Brazil has extended its forest concession grants to be valid for a 40-year period without any limit on the total area under concession. Companies interested in bidding for concessions can do so on the basis of a technical proposal and a bidding price.

The Brazilian Forest Service confirmed that the first concessions will be granted in the second half of 2007. Financial resources collected during the concession period will be under the supervision of the Brazilian Institute of the Environment and the Natural Renewable Resources (IBAMA) and the State and Municipal Environmental Secretariats. The financial resources will be expended to control forest operations and re-structure conservation units.

Brazil*s Law 11,284, which was approved in March 2006, allows the use of public forests as conservation units, community management and forest concessions for private companies. The Brazilian Forest Service has recently submitted to the National Congress the first report on public forest management, as required by law.

Forests cover 56% of Brazil, or about 477 million hectares, according to the Ministry of the Environment. According to the ministry, the production and legal trade in forest products generate over 3% of GDP, 2 million jobs (direct and indirect), and more than 8% of exports.

Furniture companies seek greater market participation
The Union of Furniture Industries of the state of Mato Grosso (Sindim車vel-MT) aims to increase its participation in the domestic furniture market from 20% to 40% in the next five years.

The sector prioritises increasing sales in the Northern region of Brazil, especially in the states of Rondonia, Acre and Amazonia. About 40 small and medium每sized companies of the state will attend Confortex 2007 and other business meetings in mid-June. The objective of the meetings is to promote discussion between companies who sell and buy forest products and of securing new markets for their products.

Several national groups will attend the upcoming business meetings, including one of the largest architecture, furniture and decoration groups and other smaller entrepreneurial groups from Mato Grosso. According to Sindim車vel, the events are expected to generate higher sales of furniture for state entrepreneurs.

Brazilwood included in Appendix II of CITES
The TTJ recently reported that Brazilwood has been listed as a protected species under the Convention on International Trade in Endangered Species (CITES). However, other species such as Spanish cedar and rosewood have not been listed during the CITES 4-16 June meeting held in The Hague, the Netherlands. Brazilwood, a Brazilian hardwood, is used for high-end furniture and musical instruments. The new listing will control felling of Brazilwood, although the use of the species will continue.

Weak USD affects wood product exports
The continuous depreciation of the USD against the Brazilian Real (BRL) has strongly affected the sawnwood segment in Brazil. From January 2006 until early June 2007, the BRL has appreciated a total of 18.4%. As a result, exports of solidwood have fallen from 2.3 million/ton in the first third of 2005 to 1.8 million in the same period of 2007, according to the trade balance data of the Ministry of Development, Economy and Trade (MDIC). Some sub-sectors are able to redirect the production to the domestic market, but, in general, the picture is discouraging. In the state of Paran芍, plywood plants have reduced production lines and the number of their employees.

Between January and April 2007, the exported volume of solidwood products fell 4.9%. The decrease in plywood alone was 23%, sliding from 439,000 to 337,000/ton. In relation to the same period for 2005, the reduction was 37.7%, with 541,000/ton exported. 

The weak USD hit export-oriented production the hardest, mostly of plywood. This has had an impact on the operation of small and medium-sized companies. For example, three pine plywood units of a major company in the Southern state of Paran芍 have operated with a smaller number of employees. Despite difficulties faced with the exchange rate, some companies continued to export, partly due to re-orientation of products and markets.

Celulosa Arauco y Constituci車n expands operations in Brazil
The Chilean panel manufacturer Celulosa Arauco y Constituci車n will expand its industrial operations in Brazil, by acquiring around 100,000ha of land. This area would include around 35,000ha worth of plantations in Paran芍 state. The company is seeking a joint venture with Stora Enso Oyj, to acquire more forest land and a sawmill.

Duratex ready to develop its MDF production line
Duratex, a Brazilian wood products supplier, has finalized contracts in order to obtain German machinery necessary for its new MDF production line, reported EUWID. With the new machinery in place, the plant*s annual production will be around 500,000 m3, using its two existing MDF facilities and another particleboard facility in Brazil. Duratex*s capacity to grow by 78% is part of a larger investment initiative unveiled by the company in March 2007. Duratex*s first quarter net turnover increased by 10% and deliveries improved in the domestic market. Duratex is also looking to acquire 18,500ha of land in Brazil to safeguard its timber supply.

Furniture cluster nets robust growth in Northern Paran芍
The furniture cluster of Northern Paran芍 has become a strategic location of the national furniture sector. There are 576 manufacturing companies that generate 15,350 direct and indirect jobs. The city of Arapongas has the largest number of companies of the sector, and generates the second largest in revenues across the country.

Between 2000 and 2006, revenues of the companies in the cluster jumped from BRL 480 million to reach over BRL 910 billion, or a growth rate of 91%. With the international business rounds and attendance by importers of furniture, raw materials and accessories to furniture fairs, the state of Paran芍 is one of the few showing growth of furniture exports. According to the Brazilian Association of the Furniture Companies (Abim車vel), state exports increased 15% from USD 91.7 million in 2005 to USD 105.2 million in 2006.

Furniture companies have the capacity to increase their production. The higher exports reflect the trend that companies are increasing product sale and are seeking to invest in the expansion of their installed capacity, according to Association of the Manufacturers of Tools and Machines for the Furniture Industry.


Lumber exports chalk up steady gains in 2007
According to the Peruvian Association of Exporters (ADEX), wood product exports increased 14.32% in the first quarter of this year, compared with the same period in 2006, mainly due to the increment in sawn wood and wood flooring exports.

USA, Mexico and China continued as the main destination points for wood products. Compared to the same period of 2006, exports rose 9.75%, 9.4% and 18.8% for USA, Mexico and China, respectively.

Sawn wood of forest species such as cedrela, congona and walnut were the most exported product in the first quarter, reaching 107% compared to the same period of 2006, followed by wood molding strips for flooring exports. Conversely, exports of sawnwood from mahogany fell 36.29% in the same period.

South American countries block European action against cedrela
A group of South American countries blocked the European Union*s move to list cedrela as a protected species under the Convention on International Trade and Endangered Species (CITES). The wood species was highly valuable for carpenters and cigar boxes makers, mainly due to its natural durability and reddish color.

Peru and other states questioned the EC proposal for Appendix II listing presented at the recent CITES Conference of the Parties (COP) in The Hague, the Netherlands. During the CITES meeting, Peru argued that the EU proposal lacked scientific evidence. The blockage of the proposal was a blow to non-governmental organizations, which insist cedrela is endangered due to felling in national parks and protected areas of Peru and other countries.

Peru confirms caoba quota
The National Institute of Natural Resources (INRENA) confirmed that Peru will continue to export 13,457 m3 of mahogany during 2007. This announcement was made in response to media reports that Peru agreed to reduce its export share of mahogany to 4,983 m3 of sawn wood during the Standing Committee of CITES, which convened in The Netherlands. Entrepreneurs from the sector, gathered together as ADEX, and suggested that 4,983 m3 only represents the initial share and a new export volume would be progressively approved as forest management plans were approved and verified, reaching a maximum of 13,475 m3. Critics of the approach to adjusting export volumes incrementally said it generates legal uncertainty in the sector, and has already resulted in delayed movement of cargo worth US $10 million in Callao Port.

Rainforest Foundation of Norway slams Peru for endangering indigenous tribes
In a recent report by the Rainforest Foundation of Norway, Peru was criticized for threatening the survival of indigenous tribes, due to its unsustainable logging of mahogany. The report, ※Illegal Logging and International Trade in Mahogany (Swietenia macrophylla) from the Peruvian Amazon§, suggests that illegal logging is occurring in Peruvian national parks and reserves, which are home to indigenous tribes. At the CITES COP in The Hague, the Rainforest Foundation of Norway and AIDESEP called for Peru to suspend all exports of mahogany.


Commercial forest producers search for more credit options
More than one hundred Mexican forest cultivators met in Mexico City this May, in response to a meeting called for by the National Forest Agency (CONAFOR). There were three thousand projects in Mexico, involving commercial plantations, most of them located in the southeast of the country and some of them already in the production stage. This situation encouraged those involved with the projects to actively seek further credit and financing for their projects, fulfill the forest products demand of the country, and increase the competitiveness of the sector. During the May meeting, the cultivators expressed their main problems, limitations and doubts regarding forest plantation investment. By identifying these problems, they suggested improving support mechanisms such as
PROTREE, a program coordinated by the federal government.


Santa Cruz and La Paz regions boost timber exports
During the first quarter of 2007, Santa Cruz wood companies exported $15.3 million and La Paz exported $10.8 million. The figures represent a 23% and 53% rise, respectively, compared to the same period last year. The main products exported by Santa Cruz companies were furniture (36%), sawn timber (25%), fiber board (11%) and doors (8%). La Paz*s main exported products were furniture (50%), sawn timber (26%) and doors (20%).

Species such as curupa迆 (Anadenanthera colubrina), which is mainly exported to Brazil and Peru, represent 28% of total Santa Cruz exports, with 6,000 m3 exported. Other species such as almendrillo (Dipteryx odorata) and quina quina (Cinchona calisaya NV.) represent 28% and 26%,
respectively, of total La Paz exports in terms of volume. Almendrillo is mainly exported as sawn timber to China, USA and the Netherlands, and the quina quina as sawn timber to China, Taiwan and Hong Kong.

Interim Forestry Superintendent named
Despite calls from the Chamber of Forestry for the government to follow the procedures stated in its forestry law for naming an interim Forestry Superintendent, the government named an interim Superintendent on May 10. According to the forestry law, an interim Superintendent says that the Interim Forestry Superintendent must be named by the President from a shortlist of three candidates presented by the Senate. The Chamber believes it is urgent to start following the forestry law again, since Bolivian success with sustainable forest management was largely due to institutional stability.


Forestry plays an important role in Guyana*s development
Minister of Agriculture Robert Persaud recently rejected the view that Guyana*s forests are over-utilized, as statistics from the Guyana Forestry Commission (GFC) indicate that extraction is slightly above 20 percent of the acceptable rate. The Minister made the remarks during a meeting with forestry stakeholders on May 27.

The Minister said there is great potential for further advancement of the forestry sector, which is increasingly becoming a major contributor to the country*s Gross Domestic Product (GDP). In this regard, the government has been undertaking initiatives to address some of the challenges facing the sector. Critical to the sector*s sustainable development is the need to ensure compliance with standards and requirements at both the local and international levels, which must be brought about by changes in forestry practices and principles.

In the upcoming months, the GFC Bill and Act will be taken to Parliament for amendment. In addition, a log export policy is currently being developed to ensure that:Guyana gets maximum return on all logs exported; exploitation of endangered species is controlled; and lesser used species are promoted. The Minister noted that the government would work with investors initially to find a reasonable solution to situations where investors cannot meet their obligations. However, he stressed that the government would take action once these initial opportunities were exhausted.

Minister Persaud also presented certificates to 17 persons who recently completed timber grading courses held by the GFC from 21-27 March 2007. This was done as part of the Commission*s country-wide programme to ensure that all the necessary timber export requirements are fulfilled.



LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down
Source:ITTO'  Tropical Timber Market Report

CopyRight(C) Global Wood Trade Network. All rights reserved.