International Log & Sawnwood Prices

16 – 31th Jan  2022

1. CENTRAL AND WEST AFRICA

  End of rains in Cameroon, harvesting back on
schedule
Cameroon has, at last, started to welcome the beginning of
the dry season so harvesting conditions have improved.
Despite the rise in covid infections mills report no problem
with the work force and that production is back to normal
after the dismal situation during the extended rains. The
availability of containers for exports is still an issue and is
disrupting shipments and leading to a build in stocks of
sawnwood.

Large number of concession agreements withdrawn in
Gabon
The timber industry in Gabon is trying to assess the impact
of an announcement from the government on 17 January
withdrawing of a large number of concession agreements.
Companies affected reportedly have concession
agreements arranged many years ago and do not have the
appropriate documentation. This is likely to cause
considerable problems for the companies concerned.
Concession holders had just 8 days from 17 January to
respond.

As with Cameroon, the availability of containers is
hindering shipments from Gabon which producers say is
unfortunate as demand is firm in international markets.

According to the daily newspaper l'Union the governor of
Moyen-Ogooué Province, Barnabé Mbagalivoua, called a
crisis meeting with government labour officers and
workers' unions to decide action against a forestry
company which reportedly unfairly dismissed workers,
employed workers without a formal contract and also
failed to pay employee contributions to the National Social
Security Fund (CNSS).

See: https://www.lenouveaugabon.com/fr/securite-justice/1701-17944-lambarene-des-exploitants-forestiers-chinois-interpellespour-violation-des-droits-des-employes

Rumours that felling tax to be raised in Congo
Opposition to the proposed log export quota in Congo set
to be introduced by the end of this year is growing with
exporters saying the 75%/25% quota needs to be
reconsidered.

Producers have indicated that there is a steady demand for
okoume especially and that buyers continue to show
interest in the redwoods such as sapelli and sipo. News is
circulating indicating changes in top management of the
forest authority have been made and that the change has
not impacted dealings between concessionaires and mills
and the government. In related news, it has been learnt that
the felling tax will be increased possibly in June this year.

Congo Basin certification system achieves PEFC
endorsement
The PEFC website has announced the Pan African Forest
Certification (PAFC) Congo Basin regional system has
achieved PEFC endorsement marking the first PEFC
regional forest certification system to be recognised.

PEFC says “members in Cameroon, Congo and Gabon
joined forces under the name of PAFC Congo Basin to
develop this regional certification system. The shared
language and the similar forestry conditions in the three
neighbouring countries enables them to share one system.

See: https://pefc.org/news/pafc-congo-basin-regionalcertification-system-achieves-pefc-endorsement

ATIBT launches carbon commission
A wide range of stakeholders including producers, donors,
professional associations, certification bodies and various
experts recently met to discuss advancing an
understanding of carbon trading and carbon markets. One
of the main observations from the group was that forest
operators lack information on carbon financing and
dialogue with carbon market actors.

There were questions raised on the potential for carbon
storage through SFM in West African forests which it was
felt was not sufficient to be profitable at current prices.
The group identified objectives which were included in an
initial roadmap to address the overall objective.

See: https://www.atibt.org/en/news/13114/launch-of-the-atibtcarbon-commission-making-the-link-between-forest-operatorsand-carbon-market-actors

Wood decking market study
Le Commerce du Bois has published the results of
a study conducted by Jean-Marc Mornas on prospects for
wood decking in France: ‘2017-2022 evolution, 2021
estimate and 2025 prospects’.

See:
https://www.lecommercedubois.org/files/upload/actualites/Marches/CP_Etude_Mornas_-_Marche_terrasse_bois_et_derives_2017_a_2021____VF_LCB.pdf

2. GHANA

   Wood product export markets
According to data from the Timber Industry Development
Division (TIDD), a total of 248,658 cu.m of wood
products were exported during the first 10-months of
2021. This compares to 179,835 cu.m recorded for the
same period in 2020 and was a 38% year on year growth.
The table below shows the market performance for 2021
compared to 2020.

Of the 248,658 cu.m shipments to Asia (63%), Europe
(17%) and Africa (12%) accounted for 92% of the total
export volume for the period with three other geographic
zones accounting for the balance.

Total shipments to the ECOWAS sub-region increased to
25,632 cu.m in 2021 from 21,541 cu.m in 2020, a growth
of 19% . The table below shows the ECOWAS market
destinations with their corresponding volume, value and
unit price.

Burkina Faso, Togo, Niger and Senegal were the leading
importers of Ghana’s wood products and recorded
significant volume growth in 2021 compared to 2020.
These countries together accounted for the 88% of the
total 25,632 cu.m shipped to ECOWAS member countries
in 2021.

The average unit price for ECOWAS member countries
trading with Ghana improved in 2021 compared to 2020,
except Gambia. The average price increased from
Euro342/cu,m in 2020 to Euro387/cu.m in 2021.

West African countries have for several years been the
major markets for Ghana’s plywood with Togo, Niger and
Burkina Faso topping the list. Currently, about 80% of
Ghana’s plywood exports are shipped to West African
markets.

Land use map to identify forest cover
The Forestry Commission, in partnership with local and
international agencies, has developed a land use map
which delivers a detailed view of the country’s forest
cover. Based on the latest map it has been established that
Ghana has a total of 6.5 million hectares of both open and
closed forests.

The land use map which, a project of the Resource
Management Support Center (RMSC) of the Forestry
Commission, received support of the UK space agency,
Ecometrica, the technical wing of the Forestry
Commission (Resource Support Center), Faculty of
Renewable Natural Resources of the Kwame University of
Science and Technology (KNUST) and the Forest
Research Institute of Ghana (FORIG).

See: https://ghana-nationallanduse.knust.ourecosystem.com/interface/

Two online applications for forestry sector
The Forestry Commission has launched two online
applications; the Digitalised Property Mark Registration
and Renewal (e-property mark registration) and the
Electronic Wood Tracking System.

When launching the applications the Minister for Lands
and Natural Resources, Samuel A. Jinapor, said it is the
President’s vision to promote socio-economic
development through digitisation and the Forestry
Commission is playing its part.

The E- Property Mark Registration App. allows applicants
to register, renew and extend contracts online while the
electronic Wood Tracking System platform is designed to
track wood from the point of harvest to the point of sale in
order to ensure transparency and to be able to verify the
origin of wood products.

See: https://fcghana.org/news_summary.php/

Correction, In addition to a duplication of tables our
correspondent has found some errors in the export
statistics he provided. Revised export volume and value
tables are provided below.

3. MALAYSIA

    Reduce dependence on natural forest resources says
minister
Malaysia recorded a slight increase in earnings from
timber exports between January and October 2021
compared to 2020. Among the products that contributed
most were wooden furniture, sawnwood, plywood and
mouldings.

The Ministry of Plantation Industries and Commodities
(MPIC) aims to achieve RM24 bil. from timber exports in
2022 as the industries take advantage of the latest
advanced technologies, introduce new products and solve
the problem of finding skilled workers.

MPIC Deputy Minister, Willie Mongin, called on the
industry to be imaginative in coming up with alternative
raw material thus reducing dependence on tropical timber
and rubberwood. He also stressed the importance of
providing good accommodation for workers in order to
meet the Workers' Minimum Standards of Housing and
Amenities Act 1990 (Act 446).

See:https://www.nst.com.my/news/nation/2022/01/763184/malaysiagained-rm179-billion-timber-exports-2021?topicID=1&articleID=763184

Regional Comprehensive Economic Partnership
(RCEP)
The timber industry is looking at RCEP as a new driver of
Malaysian domestic and international business activities in
the post-pandemic period. Malaysia is likely to be the 12th
RCEP signatory as the Instrument of Ratification was
submitted to the ASEAN Secretariat on 17 January. RCEP
will enter into force for Malaysia on18 March 2022 as
Malaysia joins 11 other signatories Singapore, China,
Japan, Brunei, Cambodia, Laos, Thailand, Vietnam,
Australia, New Zealand and South Korea.

Malaysia is expected to be a major beneficiary of the
RCEP agreement in terms of gains in exports, with a
projected US$200 mil. increase. These gains would result
from tariff eliminations and price reductions for
merchandise goods.

See: https://www.thesundaily.my/business/rcep-a-key-enabler-torevitalise-malaysia-business-activities-EL8782789

High Conservation Value area management
The High Conservation Value Malaysia Steering
Committee has launched the Malaysian National
Interpretation (MYNI) for the Management and
Monitoring of HCV Forests. The document, which was
produced through a multi-stakeholder consultation
process, can be used as a guidance to achieve or maintain
sustainability certification for a range of commodities,
including palm oil and timber.

The document adapts and interprets the general
management and monitoring of HCVs, which are globally
established, as well as defining generic terms and values
outlined in HCV Network Common Guidance, according
to the local context in Malaysia.

See: https://www.pressreader.com/malaysia/the-borneo-postsabah/20220118/282114934942487

Tree plantations in Sabah
Sabah Chief Minister, Hajiji Noor, has said industrial tree
plantations (ITP) can be a game-changer to revive Sabah’s
timber industry to its former peak production of 12 million
cubic metres.

He said he hopes for an innovative public-private
partnership between the Sabah Government and timber
industry to reduce and relieve pressure on the tropical
forest. Hajiji said under the ITP initiative the timber
industry in Sabah aims to plant 80 million trees in 10 to 12
years involving an investment of RM4 bil..

It has been estimated, based on input from the timber
industry, that the establishment of 400,000 hectares of
forest plantations can potentially create employment of
40,000 skilled and semi-skilled workers in the upstream
sector.

MIFF rescheduled
The Malaysian International Furniture Fair (MIFF) has
been rescheduled from the original 8-11 March 2022 to 6-
9 July 2022. In addition to the face to face exhibition
experience MIFF 2022 will also provide a digital
exhibition solution - MIFF Furniverse - to reach a wider
audience and continue to serve the sourcing needs of the
global furniture community.

4.  INDONESIA

  Industrial log production rising
The chairman of the Association of Indonesia Forest
Concession Holders (APHI), Indroyono Soesilo, has
indicated that natural forest wood production reached 6.03
million cu.m in 2021 a growth of 14.4% year-on-year. In
addition plantation production was 46.4 million cu.m just
1% higher compared to 2020.

Indroyono said exports increased around 30% to
US$14.48 billion from the 2020 value of US$11.07
billion. For 2022 Indroyono projects exports could be
US$15-16 billion saying the markets are getting close to a
pre-covid condition.

Among the nine major downstream products exported
those that recorded the highest increase were wood chips
with a growth of 91% year on year and panels at 83%.
Even though the export performance has improved
logistical constraints are still a crucial problem that has not
eased.

See:
https://ekonomi.bisnis.com/read/20220113/257/1488800/nilaiekspor-ndustri-kehutanan-melesat-30-persen-secara-tahunan.

In related news, according to Statistics Indonesia (BPS)
log production fluctuated in every quarter of 2020.
Production declined in the second quarter from 14.58
million cu.m in the first quarter to 13.87 million cu.m.
However, there was a significant increase of log
production in the third quarter and by 16.2 million cu.m in
the fourth quarter of 2020.

Forests in Sumatra provide most logs and in 2020 68% of
log production in Indonesia came from Sumatra (41.73
million cu.m). Acacia species topped the list of species at
69%. Kalimantan is the second largest producer of logs
with an amount of 9.71 million cu.m in 2020 with the
Meranti group as the dominant species at 36% of all log
production. The 3rd largest log producer in 2020 was Java
producing of 7.76 million cu.m or about 13%. In java
mixed tropical hardwood was the most widely harvested
group of species.

See:
https://www.goodnewsfromindonesia.id/2022/01/14/menilikpersebaran-produksi-kayu-bulat-di-indonesia

Anticipated rise in domestic demand for furniture
The Ministry of Industry anticipates there will be an
increase demand for furniture in the domestic market this
year. The Director of Forest and Plantations Product in the
Ministry, Emil Satria, reported that, to service the
domestic market, the Indonesian Furniture and Craft
Industry Association (HIMKI) will open more sales
outlets. However, international markets are the foundation
of the domestic furniture industry .The industry's
challenges still revolve around the supply of raw materials,
both wood and rattan, capital and labour, said Emil.

See: https://ekonomi.bisnis.com/read/20220113/257/1488708/permintaan-furnitur-dalam-negeri-diramal-meningkat-tahunini?utm_source=Desktop&utm_medium=Artikel&utm_campaign=BacaJuga_1.

Entrepreneurs prepare for fire season
The chairman of APHI reported that Association members
have been preparing to start fire mitigation efforts as the
fire risk is highest during the early months of the year
especially March and April. Some fires have already been
seen in Sumatra. Forest fires do immense damage and also
severely impact harvesting and the supply of logs.

See:
https://ekonomi.bisnis.com/read/20220113/257/1488776/awaltahun-pengusaha-hutan-hilir-bersiap-hadapi-musim-kebakaran.

Increasing the number of entrepreneurs
Presidential Regulation (Perpres) Number 2 of 2022 on
National Entrepreneurship Development for 2021-2024
aims to boost the number of entrepreneurs in Indonesia.
To strengthen the structure of the national economy the
government wants to increase the percent of entrepreneurs
in 2024 to 3.95% from the current 3.47 %. The Perpres
provides convenience, incentives and a means of recovery
for entrepreneurs who had started their business before the
pandemic and those just starting out.

The support from Perpres will comprise electronic
licensing registration, facilitating domestic and export
standardisation and certification as well as access to
financing in addition to prioritising the domestic
procurement by government agencies. Entrepreneurs will
have access to the digital market for State-Owned
Enterprises (PaDi BUMN).

See: https://en.antaranews.com/news/211317/entrepreneurshipregulation-to-increase-the-number-of-entrepreneurs

5. MYANMAR

  Strict action by overseas banks
According to a source close to exporters, bank transactions
for receivables for exports are being tightened by oversea
banks especially for the timber sector. One exporter said
that, in particular, banks in Singapore have been taking the
strictest action over the past three months.

There have been no comments from exporters regarding
bank action in other markets outside of the EU and US. It
is difficult to assess how this will impact producers in
Myanmar as they struggle to keep business going.

The challenge of tough sanctions
Very recently, a popular pro-human right NGO, Justice for
Myanmar, published an article asking US and major
markets for a ban on all Myanmar timber trade. The article
says that the United States has imported 1,565 metric
tonnes of teak from Myanmar even though sanctions
began soon after the military takeover in February 2021.

The US Department of the Treasury’s Office of Foreign
Assets Control (OFAC) imposed sanctions on the Myanma
Timber Enterprise (MTE) with the justification that the
timber industry is a key economic resource for the
Myanmar military junta.

From February to the end of November 2021 US
businesses continued to import teak from Myanmar
according to data from the global trade database.
Shipments consisted of teak boards and scantling. This
trade between companies in the US and MTE may not
have been subject to sanctions or attracted penalties by the
US Office of Foreign Assets Control (OFAC).

Sanctions imposed by the United States on MTE prohibit
“the making of any contribution or provision of funds,
goods, or services by, to, or for the benefit of any blocked
person”. It is understood that importers in the US refused
to buy products milled from the logs sold to Myanmar
millers by MTE after 21 April 2021 and for EU importers
the cut-off date was 21 June 2021.

A view expressed by enterprises in Myanmar is that
sanctions on the timber industry should be reviewed
because as long as it is in place the industry will be
severely affected and mills may have to close with the loss
of a large number of jobs.

See: https://www.justiceformyanmar.org/stories/us-companiesimported-nearly-1-600-tonnes-of-myanmar-teak-circumventingsanctions)

In related news, it has been reported that the US
Departments of State, Treasury, Commerce, Labor and
Homeland Security along with the US Trade
Representative have warned companies to be extremely
wary of doing business in Myanmar citing the risks of
being linked to a military government involved in
lawlessness and human rights abuse.

Those involved with businesses controlled by the military
regime "run the risk of engaging in conduct that may
expose them to significant reputational, financial and legal
risks including breaking sanctions and money-laundering
laws”.

See: https://www.mizzima.com/article/us-warns-firms-overdoing-business-myanmar

Massive job losses and underemployment
A 28 January press release from the International Labour
Organisation (ILO) says “as many as 1.6 million jobs were
lost in Myanmar in 2021 with the military takeover
compounding the impact of the COVID-19 pandemic”.

The press release continues “One year on from the military
takeover in Myanmar on 1 February 2021, the labour
market remains fragile. Working hours are estimated to
have decreased 18% in 2021 relative to 2020, equivalent
to the working time of at least 3.1 million full-time
workers. These working-hour losses were driven by
employment losses as well as increased underemployment.

The losses in both working hours and employment were
disproportionately greater for women than men overall.
Women also accounted for an overwhelming majority of
job losses in garments as well as tourism and hospitality”.

The military takeover and COVID-19 pandemic have put
millions of workers in Myanmar in a grim situation. We
are witnessing a reversal of years of progress in the labour
market. Should this continue it can only lead to increased
poverty and insecurity across the country, said Donglin Li,
ILO Myanmar Liaison Officer/Representative. The crisis
has “reversed years of progress in the labour market and if
not addressed will continue to widen gaps in decent work
particularly for the most vulnerable workers and
businesses," says the ILO.

See: https://www.ilo.org/yangon/press/WCMS_835953/lang--en/index.htm

and
https://abcnews.go.com/Business/wireStory/labor-group-16mjobs-lost-myanmar-2021-82528319 )

Economy to remain weak in 2022
According to the latest update on Myanmar from the
World Bank the economy will remain critically weak for
much of 2022 and will be "severely tested" by the impact
of the military takeover a year ago but there are recent
signs of stabilisation in manufacturing and exports.

See: https://www.worldbank.org/en/news/pressrelease/2022/01/26/economic-activity-in-myanmar-to-remain-atlow-levels-with-the-overall-outlookbleak#:~:text=%E2%80%9CThe%20situation%20and%20outlook%20for,and%20Lao%20PDR%20Mariam%20Sherman.

and
https://www.worldbank.org/en/country/myanmar/publication/myanmar-economic-monitor-january-2022-economic-activity-inmyanmar-to-remain-at-low-levels-with-the-overall-outlook-bleak

The Bank projects growth of 1% in the year to September
2022 adding there are substantial supply and demand
issues, cashflow shortages for businesses and reduced
credit access. Half the firms surveyed reported difficulties
last year due to a sharp depreciation of the kyat.

The World Bank said events since the coup were likely to
limit Myanmar's growth potential, with most indicators
suggesting private investment had fallen markedly while
the cost of imports has risen and kyat-denominated
revenues are worth less in foreign currency terms.

Following an expected 18% contraction of the economy in
the year ended September 2021, the World Bank’s
Myanmar Economic Monitor, released on January 26,
projects growth of 1 percent in the year to September
2022.

While reflecting recent signs of stabilisation in some areas
the projection remains consistent with a critically weak
economy, around 30 percent smaller than it might have
been in the absence of COVID-19 and the February 2021
coup.

“The situation and outlook for most people in Myanmar
continues to be extremely worrying,” said World Bank
Country Director for Myanmar, Cambodia and Lao PDR,
Mariam Sherman. “Recent trends of escalating conflict are
concerning, firstly from a humanitarian perspective but
also from the implications for economic activity.
Moreover, with a low vaccination rate and inadequate
health services, Myanmar is highly vulnerable to the
Omicron variant of COVID-19.”

Teak substitution in boat building
As a result of the fading possibility to secure a stable teak
supply in long term there is a growing tendency to
substitute the teak from Myanmar with teak from other
sources and with other similar species and also non-wood
products.

In a recent issue of Yachtingworld it is noted that natural
forest teak from Myanmar has long been revered in the
boatbuilding industry and no one to-date has been able to
find a really good alternative for Myanmar teak.

See: https://www.yachtingworld.com/features/the-grave-humancost-of-teak-wood-135147 )

6. INDIA

  Wholesale price indices for December 2021
The Office of the Economic Adviser, Department for
Promotion of Industry and Internal Trade has published
wholesale price indices for December 2021. The index for
manufactured products increased to 136.4 in December
2021 from 136.1 for November 2021. Out of the main 22
manufactured products, 16 saw increases in prices while 5
decreased in December 2021 compared to November
2021.

The Wood and Wood Products index rose to 142.9 in
November but fell back slightly in December. The index
for sawnwood rose adding to gains that began in
September. The index for veneer sheets marked a sharp
rise in December 2021.

The annual rate of price inflation in December was
13.56% higher than in December 2020. The high rate of
inflation in December 2021 was primarily due to rise in
prices of basic metals, crude petroleum and natural gas,
chemical products, food, textiles and paper products.

See: https://eaindustry.nic.in/display_data_201112.asp

Poor got poorer
A survey conducted by People’s Research on India’s
Consumer Economy (PRICE) a Mumbai- based think-tank
and reported by India Express shows the annual income of
the poorest 20% of Indian households fell 53% in the
pandemic year 2020-21 from levels in 2015-16.

Over the last five-year period the richest 20% saw their
annual household income grow 39% reflecting the sharp
contrast Covid’s economic impact has had on incomes.
The survey also showed that while the richest 20%
accounted for 50.2% of the total household income in
1995, this had jumped to 56.3% in 2021. On the other
hand, the share of the poorest 20% dropped from 5.9% to
3.3% in the same period.

See: https://indianexpress.com/article/india/income-of-poorestfifth-plunged-53-in-5-yrs-those-at-top-surged-7738426/

Logs cost and freight rates continue to punish
The cost of shipping a single container from Mangaluru to
Rotterdam is now around US$6,000, more than ten times
what it was while the cost of shipping to Dubai is around
US$3000, where it was anywhere between US$300 and
US$500 before the pandemic.

With the ongoing global container shortage and exorbitant
freight costs the government is exploring a proposal to
extend tax and other incentives to draw large players to
establish shipping lines in India. The incentives may be
announced as early as in the upcoming budget for 2022-
23.

Rains disrupting rubberwood harvesting and trucking
The Kerala based wood panel and plywood industries are
experiencing a sharp rise in log costs. The price of
rubberwood logs has gone up from Rs6,000 per tonne to
Rs7,500 per tonne as availability has dipped following
incessant rains in Kerala which have disrupted harvesting.

A representative of the Kerala Sawmill Owners
Association, Shaji Raphael, said that instead of the usual
400 loads of ruberwood logs coming to Perumbavoor
every day now mills are seeing only 100 loads. The heavy
rain in the State has affected plywood and particleboard
production in mills located in Perumbavoor, Kannur and
the surrounding area. Kerala has more than 400 plywood
mills which rely on the steady supply of rubberwood logs.

See:
https://www.onmanorama.com/news/business/2021/12/04/rubberwood-stock-dries-up-rains.html

7. VIETNAM

  Wood and wood product (W&WP) trade highlights
In 2021 after the first wave of Covid-19 Vietnamese
wood-product manufacturers received many orders but
encountered numerous problems in satisfying them
including the scarcity/interruption of wood and
hardwares/accessories supply.

In addition, the shortage of shipping vessels, the lack of
containers, the rising rates of sea freight led to the
disruption of the supply chain for inputs and outputs from
the wood industries. This trend tends to continue affecting
W&WP exports into early 2022.

Log and sawnwood availability and price a major issue
Due to the impact of covid-19 imported wood raw
materials from major suppliers is now problematic.
Availability and supply chain disruptions have pushed up
prices for imported wood which is affecting the
willingness of Vietnamese manufacturers to accept orders
with a long delivery period. In addition to the high cost of
imports prices of local plantation timber have jumped
about 5%.

Practical solutions taken by the Government and the
private sector have helped industries grasp market
opportunities and record impressive growth in 2021. By
the end of 2021 W&WP exports reached US$14.8 billion,
up by 20% compared to 2020 and accounting for 4.4% of
the total export earnings by the country.

In particular, the share of high value-added WPs (wooden
furniture, floorings, doors etc.) rose sharply. W&WP
exports to top markets, such as the US, China, Japan, EU,
South Korea, Canada all grew.

The high growth rate in 2021 has enabled the wood
industry sector to set the W&WP export target for 2022 at
US$16 billion. To reach this target when still impacted by
the pandemic enterprises will to focus higher value
furniture production as well as wood legality assurance. A
new generation of free trade agreements (FTAs) have
recently been concluded which will help boost trade.

In 2022, free trade agreements will continue to give tariff
incentives for W&WPs exports from Vietnam and attract
investment to increase W&WP production capacity. As a
result, W&WP exports are expected to be a bright spot for
the nation’s economy.

Imports of wood raw materials stood at US$2.4 billion in
2021 as it was in previous years indicating that domestic
supplies of wood are gaining acceptance.

Stimulus package to revive growth
The National Assembly of Vietnam has passed a
resolution on fiscal and monetary policies to support
socio-economic recovery and development. In particular
interest rates applicable for enterprises affected by covid-
19 will be reduced in 2022 – 2023 but still the industry
faces many challenges such as:

 The growth rate of the global economy in the
period of late 2021 and early 2022 has signaled a
slowdown due to prolonged inflation and
problems associated with the interrupted supply
chain and scarcity of workforce.

 Many governments have been considering plans
to scale back the post-pandemic support programs
and therefore the recovery of many economies
encounters with the risk of slowing down.

 Consumers preferences in many European
markets are changing from using out-door
wooden furniture to alternative plastic, iron and
steel and environmentally friendly material-made
accessories.

 Many wood processing factories located in key
wood industry clusters in Vietnam face tough
competition with other sectors for labour force
and facilities needed for further development.

 With FTAs becoming effective Vietnam has to
cut tariffs imposed on wood product import and
made-in-Vietnam wood products have to compete
with the wooden furniture imported into Vietnam
from free trade partners.

 Major W&WP markets are increasingly
demanding strict implementation of timber
legality regulations. The risk of trade fraud as
well as trade protection tends to increase may
negatively affect Vietnam's wood industries.

 Covid-19 makes it difficult for businesses to
interact with each other in the supply chain as
well as with customers to promote W&WP
export.

 The competitiveness of Vietnamese wood
processing and trading enterprises remains low in
comparing with FDI enterprises which are
operating in Vietnam.

 Scarcity of shipping vessels, shortage of
containers and excessively high freight rates are
leading the interruption of the supply chain.

To assure further growth of W&WP exports a package of
solutions should be adopted by businesses and the
government. In particular wood enterprises are
recommended to tackle the following solutions:

 Continue to implement countermeasures towards
prevention and control of Covid-19 pandemic;

 Further develop wood industry in the direction of
enhancing added value by production of higher
quality furniture, use of legally sourced wood and
effective utilization of new generation FTAs;

 Secure the supply of raw materials and diversify
wood products to meet demands from more
diverse markets rather than too much target at the
US;

 Promote E-commerce and applicate digital
transformation to improve business governance.

To support the industry, the Government should:

 Scrutinise FDI-related policies to avoid the risks
associated with tax circumvention, trade fraud
and possible use of illegally sourced timber;

 Policy-making agencies, especially diplomatic
agencies and trade representatives abroad, need to
be more proactive in providing information so
that wood businesses could be able to adapt to
market fluctuations and possible trade protection
remedies applicable in various markets;

 Improve logistics services to facilitate
import/export transactions and support businesses
to utilize trade incentives through certification of
origin;

 Facilitate vocational training and education to
provide skill labor force for the industry.

 Strengthen early warning mechanisms to support
the private sector to avoid trade protection
countermeasures and minimize the loss that may
be caused to Vietnamese businesses

Export products
In 2021, most of W&WP exports saw a high growth rate
except bed-room furniture. Wooden frame seats topped the
export with the turnover of US$3.5 billion, year-on-year
up by 33%. Next to wooden frame seats was guest room
and kitchen furniture with an export value of US$3.05
billion, 12.3% up, followed by bedroom furniture, US$
2.03 billion, 0.5% down.

The export of wood-based panels and flooring reached
US$2.02 billion, up 53%,; woodchip US$1.7 billion, up
18%.

Export markets
The US continued to top the list of export markets in 2021
consuming US$8.77 billion, up 22% compared to 2020.
The rapid growth rate of W&WP exports to the US market
greatly contributed to the positive growth of the wood
industry.

The Chinese market ranked number 2 with US$1.5 billion,
up 25% percent. Exports to China are mostly with primary
processed/non-value added products including woodchips
and un-finished floorings while the proportion of valueadded
furniture remains minor.

W&WP export to the Japanese market in 2021 valued at
US$1.4 billion, up 11% compared to 2020; South Korea
US$888.2 million, up 8.5%; EU US$ 619.3 million, up
19%.

Supply of locally sourced wood
In 2021 the area of newly established plantations is
estimated at 277,800 hectares, an increase of 2.8%
compared to the previous year (the fourth quarter added
101,900 hectares, up 3% compared to the same period
last year). The number of planted trees (mainly on farms)
was 99 million, up 3%. Harvesting of planted trees yielded
18.1 million cu.m, up 5.4% year on year.

Prospects for 2022
In 2022 Vietnam's W&WP exports are expected to secure
a variety of support measures to upscale export volumes
especially to the US and EU markets that are the targeted
destinations of the industry. In addition, wood enterprises
also intend to increase exports to Japan, China, South
Korea, Canada an the UK.

To assure timber legality, the Government of Vietnam has
signed a Voluntary Partnership Agreement (VPA) with the
EU to implement FLEGT. This legally binding agreement
aims to improve forest governance and promote legal
timber trade between Vietnam and the EU.

Following this agreement, the Government has also issued
Decree No. 102/2020/ND-CP to regulate Vietnam's timber
legality assurance system (VNTLAS).

In addition, Vietnam Timber and Forest Products
Association (VIFOREST) has sent letter to the Ministry of
Agriculture, Forestry and Fisheries of Cambodia,
requesting the Cambodian side to share legal evidence
required for timber exported from Cambodia to Vietnam.

The Government has further issued Resolution 84/NQ-CP
approving the Sustainable Forestry Development Program
for the period of 2021-2025 which is focused on
development of the Vietnamese forestry as an important
economic and technical sector.

Boosting W&WP exports requires an increased material
supply. With the target of US$16 billion by 2022,
Vietnamese wood industry will use 1.2 times of the total
input material used in previous year.

To secure raw materials for the wood processing industry,
in addition to domestic supply, in 2022 Vietnam's wood
industry is forecasted to spend US$2,37 billion, up by 10%
compared to 2021, for wood imports.

Varieties of imported wood
In 2021 pine topped imports with a share of 21% of total
wood imports amounting to 1.314 million cu.m, worth
US$325.2 million, up 34% in volume and 54% in value
compared to 2020.

Oak imports reached 301,200 cu.m, worth US$170,4
million, up 1.6% in volume and 21% in value.

Eucalyptus wood import accounted for 258,400 cu.m
worth US$55.7 million, up 19% in volume and 25% in
value.

The import volume of some other types of wood increased
compared to 2020 such as padouk ,up by 27.0%, beech
29%, teak increased by 60%, rubberwood up 129%,
pyinkado up by 60% and pecan by 270%.

In contrast, imports of ash in 2021 decreased by 4% in
volume and 10% in value compared to 2020 accounting
for 426,900 cu.m, worth Ú$99.6 million and contributing
6.9% of total wood imports.

Import of some other timbers fell in 2021 compared to
2020. Poplar imports dropped as did imports of tali,
dousse sapele, spruce, walnut and mukulungu.

Average prices
In 2020 and the first 5 months of 2021 world wood prices
increased continuously and peaked in May 2021. The
reason for the surge in prices was the reduced supply as
many countries applied social distancing and lock-downs
which negatively affected logging.

The surge in prices was also the result of increased
demand for house renovation and new construction. From
June 2021 price started to ease and then increased sharply
again in the last months of 2021 due to the scarcity supply
and high demand.

The mean import price for wood in Vietnam was rather
low in the first month of the 2021 (US$304.1cu.m for
logs) then it increased continuously until May and
decreased slightly in June 2021. However the price of
wood gradually increased and reached a peak in December
2021 (US$392.6/cu.m log). In December 2021, the mean
import price of logs was US$392.6/cu.m, up by 14%
compared to November 2021. As compared to December
2020 it was up 28.5%.

Main suppliers
In 2021 Vietnam's imports of wood from major markets,
such as China, EU, Brazil, Chile, and Laos increased as
compared to 2020 while imports from the US, Thailand,
Cambodia, New Zealand, Malaysia, Papua New Guinea
dropped.

China was the largest supplier of wood raw material to
Vietnamin 2021 reaching 1.0 million cu.m worth
US$411.4 million, up 29% in volume and 32% in value
compared to 2020, accounting for 16% of total imports.

The EU ranked second with a supply of 799,900 cu.m
worth US$237.5 million, up 3,5% in volume and 18% in
value compared to 2020 and accounting for 12.6% of total
imports.

In particular, imports from some EU countries increased
remarkably such as from Germany, France, Finland,
Slovenia, Latvia and Spain. Some other suppliers saw
shipments to Vietnam rise such as Brazil (up 62%), Chile
(6.9%), Laos (127%), Australia (722%) and Uruguay by
28.3%.

In contrast, imports from the US fell by 20.3% in volume
and 7.4% in value compared to 2020, accounting for
683,700 cu.m worth US$318.2 million. Other countries
from which imports dropped in 2021 included Thailand,
Cameroon, New Zealand, Malaysia, Papua New Guinea
and Russia.

8. BRAZIL

  Performance of the furniture sector in Bento
Gonçalves in 2021
The furniture sector in Bento Gonçalves saw an increase in
revenue growth in 2021. The State Finance Secretariat
(Sefaz/RS) reported that the increase in the first ten
months of 2021 was 49% compared to the same period in
2020.

Despite this sign of recovery the timber and furniture
sectors have been affected by a range of problems such as
increased taxes and rapidly rising input costs such that the
growth in revenue did not translate into improved
profitability.

The Bento Gonçalves furniture cluster accounted for 26%
of State revenue in 2019 and 27% in 2020 and this rose to
29% by December 2021. This growth is partly due to the
low basis of comparison, especially in the first half of
2021 compared to the same period in 2020.

In 2021 furniture produced in the Bento Gonçalves
furniture cluster in the state of Rio Grande do Sul
generated a revenue of US$75.1 million, some 58% higher
than in 2020 and the highest since 2009. The increase was
due to a good performance in the national and state
markets as well as exports.

According to the Bento Gonçalves Furniture Industry
Union (Sindmóveis) this result was due to innovation,
quality and design of the furniture produced.

The top 10 destinations for furniture produced in the Bento
Gonçalves furniture cluster in 2021 were the United States
followed by Chile, Uruguay, Peru, the United Kingdom,
Colombia, Mexico, Panama, Puerto Rico and Saudi
Arabia. Together, these represented around 81% of total
exports.

According to Sindmóveis, international sales have the
potential to remain stimulating in 2022 especially driven
by Fimma the International Fair of Suppliers of the Wood
and Furniture Production Chain and the Movelsul
Furniture Fair which will take place in Bento Gonçalves in
March 2022.

Quality and sustainable timber from the Amazon -
CIPEM promotes SFM
An event “Living Forest”, organised by the Center for
Timber Producers and Exporters of Mato Grosso State
(CIPEM) was attended by representatives of the embassies
of the United States, Mexico and the European Union and
aimed to promote forest products coming from sustainably
managed forests in the State of Mato Grosso.

Representatives from the State Secretariat of the
Environment of Mato Grosso State (SEMA-MT) and the
Brazilian Institute for Environment and Renewable
Natural Resources (IBAMA) also participated. Together
they emphasised the efficiency of forest monitoring and
control and the strengthened dialogue with international
representatives which made possible a reliable trade in
quality and sustainable timber from natural forests in the
Amazon.

Other issues discussed dealt with the update of the SFM
Study of Ipê tree species and the integration of multiple
systems including the Integrated Environmental
Monitoring and Licensing System (SIMLAM), Forest
Products Trade and Transport System (SISFLORA) 2.0
(SEMA-MT) and the National System for the Control of
Origin of Forest Product (SINAFLOR)/(IBAMA).

Export update, November and December 2021
November
In November 2021Brazilian exports of wood-based
products (except pulp and paper) increased 27% in value
compared to November 2020, from US$299.8 million to
US$381.0 million.

Pine sawnwood exports jumped 58% in value between
November 2020 (US$47.2 million) and November 2021
(US$74.4 million). In volume terms exports declined
slightly (- 2.4%) over the same period, from 267,600 cu.m
to 261,100 cu.m.

Tropical sawnwood exports fell 16% in volume, from
38,300 cu.m in November 2020 to 32,300 cu.m in
November 2021. In value terms exports fell 11% from
US$5.5 million to US$13.8 million, over the same period.

Pine plywood exports experienced an almost 11% increase
in value in November 2021 compared to November 2020,
from US$64.5 million to US$71.3 million. In volume,
however, exports decreased 21% over the same period,
from 226,400 cu.m to 180,000 cu.m.

As for tropical plywood, exports declined in volume (8%)
but increased in value (19%), from 7,500 cu.m (US$3.2 million) in November
2020 to 6,900 cu.m (US$3.8 million) in November 2021.

The value of wooden furniture exports increased from
US$57.7 million in November 2020 to US$77.8 million in
November 2021, a 35% growth.

December
In December 2021 Brazilian exports of wood-based
products (except pulp and paper) increased 31% in value
compared to December 2020, from US$ 27.4 million to
US$29.1 million.

Pine sawnwood exports grew significantly (53%) in value
between December 2020 (US$53.2 million) and December
2021 (US$81.5 million). In volume terms exports
increased slightly (0.5%) over the same period, from
292,800 cu.m to 294,200 cu.m.

Tropical sawnwood exports fell 15% in volume from
45,700 cu.m in December 2020 to 39,000 cu.m in
December 2021. In value exports dropped around 5% from
US$16.7 million to US$15.9 million over the same period.

In contrast , pine plywood exports rose about 3% in value
in December 2021 compared to December 2020, from
US$66.3 million to US$68.1 million but the volume of
exports fell 21% over the same period, from 233,900 cu.m
to 185,900 cu.m.

It came as a surprise that the volume of tropical plywood
exports increased sharply (25.8%) and in value (67%),
from 6,600 cu.m (US$2.7 million) in December 2020 to
8,300 cu.m (US$4.5 million) in December 2021.

Building on the previous months gains wooden furniture
export increased from US$59.8 million in December 2020
to US$74.5 million in December 2021, an almost 25%
growth.

Advances and challenges in the Brazilian forest sector
The impact of the COVID-19 pandemic has affected all
production sectors but for the wood products sectors 2021
ended with production and market demand at satisfactory
levels.

In early 2021 the wooden frame segment managed to
overturn an anti-dumping lawsuit promoted by a coalition
of US manufacturers through the US Department of
Commerce. This was a complex and costly process but a
success for Brazilian products.

Despite the performance of the Brazilian timber sector
which saw rising exports, logistics and international
freight remains a challenge. According to the Brazilian
Association of Mechanically-Processed Timber Industry
(ABIMCI) the timber sector has great potential to start
2022 in a positive way with good market demand, an
economic recovery and rising global consumption.

9. PERU

  Training in forest and wildlife management
During 2021 a total of 2,135 Peruvians including members
of native communities, indigenous representatives and
those linked to the forestry sector reinforced their
capacities in forestry and wildlife management with
courses and workshops held by the Forest Resources
Supervision Agency and of Wild Fauna (Osinfor). Among
the regions with the greatest participation were Ucayali,
Madre de Dios, Loreto and San Martín.

Engineered wood has a future in Peru
The use of engineered wood has a future in Peru and is
being promoted by an association, American Softwoods.
The promotion will focus on the competitive advantages
of engineered wood products especially those
manufactured from US yellow pine.

American Softwoods aims to gain a firm foothold in the
Peruvian market and will provide training for construction
and manufacturing enterprises.

See: https://agraria.pe/noticias/american-softwoods-buscaingresar-con-mas-fuerza-al-mercado--26605

Silicon carbide from wood waste
A team of researchers from the Universidad Católica San
Pablo de Arequipa has been taking advantage of the
country's wood waste to use it in the design and
manufacture of new low-cost, environmentally friendly
ceramic and mechanical materials.

The project aims to develop a methodology utilising wood
waste to manufacture silicon carbide. The principal
investigator, Fredy Huamán Mamani, said the current
method of manufacturing this material involves high
energy consumption and emits large amounts of CO2 into
the atmosphere.

The new manufacturing process begins with the collection
of wood waste from which carbon is produced and then
combined with silicon to obtain silicon carbide.

This projects call is being conducted in collaboration with
the National University of the Peruvian Amazon and the
Seville University of Spain and is financed by National
Council for Science, Technology and Technological
Innovation (Concytec) with support from the World Bank.

Serfor and Korea Forest Service cooperation
The National Forest and Wildlife Service (Serfor) and the
South Korean Forest Service (KFS) signed a
Memorandum of Understanding to strengthen cooperation
between the two countries and work together to improve
sustainable forest management. Choi Byeong-am, Minister
for the Korea Forest Service, expressed his commitment to
promoting forestry cooperation between Peru and Korea.

Officials from both countries highlighted the importance
of promoting scientific research related to the
implementation of measures for mitigation and adaptation
to climate change in the forestry field as well as forestry
research applied to the production of natural forest assets.

They also agreed on the need to work together to promote
forest plantations and generate a productive uses that
deliver economic benefits for the population and expand
exports. The MoU also addressed advancing
industrialisation and added value production of forest
products.

See: https://agraria.pe/noticias/serfor-y-servicio-forestal-decorea-impulsaran-la-cooperacio-26758

Expanding forest plantations
Serfor has released details of registered forest plantations
saying in 2021 19,039 ha.of forest plantations were
registered in the National Registry of Forest Plantations
(RNPF) led by Serfor.

During 2020 some 7,011 ha. were registered while in 2019
the figure was 11,674 ha. 2018 was the year when there
was the highest area registered at 18,420 ha.. Including the
latest data there are 148,845 ha. of plantations registered
throughout the country.