Researchers challenged to find
native trees for
Malaysian Primary Industries Minister, Teresa Kok, has
said the government is committed to maintain a 50% forest
cover as pledged at the 1992 UN Rio Earth Summit and
she emphasised that Malaysia’s oil palm plantations are on
land reserved for agriculture and no land has been released
from permanent forest reserves.
Maintaining forest reserves is an important objective of
the new government which was sworn in after the May
general elections. There is a renewed interest in
alternatives to natural forest production such as rubber
trees and oil palm stems.
The Malaysian Prime Minister has challenged the research
community to search for plants, particularly native plants
and trees, that can be used as raw materials for industry in
the same way as exotic rubberwood.
Better utilisation of bamboo resources falls into this
category and the government is urging the country's
bamboo industry to take proactive steps to ensure that the
bamboo processing sector embraces up-to-date
technologies to increase exports more than the
RM300,000 recorded last year. Currently, there are more
than 100 bamboo processors in Malaysia and most of these
are small and medium sized enterprises.
Malaysia has more than 70 species of bamboo. In
Peninsular Malaysia bamboo forests extend over 329,000
hectares with much more being found in Sabah and
Sabah certified forest
The Sabah based Sapulut Forest Development Company
(SFD) has achieved certification under the Malaysian
Timber Certification Scheme (MTCS) for its natural forest
management within Forest Management Unit 14.
With the additional of these 54,643 hectares of forest
certified under the MTCS, a total of 850,519 hectares are
now under some form of certification in the state such as
Ramsar, MSISO Standard 9001:2008, Forest Stewardship
Council (FSC) for Natural Forest and Forest Plantations
and the MTCS. The MTCS certificate will be valid until
June 2021 and means the SFD will also be recognised
within the PEFC system.
For more see:
Calls for plantation logs to be excluded from Sabah log
A company with extensive plantations in Sabah has
appealed to the State Government to exclude logs derived
from plantations from its recent export ban. Benn Osman,
Director of Boon Rich, said plantation logs can readily be
verified as legal and so should not be included in the log
Osman pointed out that both the State and Federal
governments encouraged investment in plantations and the
current ban undermines that initiative. To emphasis this
Osman pointed out that between 2014 and 2018 the
Federal Government provided loans of around RM1
billion for tree planation development and that loans have
to be repaid.
Osman said his company has planted teak which is now 20
years old and the company is negotiating with buyers in
Dubai and India but that the log export ban is undermining
Post-Brexit – UK will
continue to recognize FLEGT
The UK Ambassador to Indonesia, Moazzam Malik, has
said in the post-Brexit period Indonesia's timber and wood
product exports to the UK will not be disrupted and that
the FLEGT licensing system will be upheld.
He also suggested to the Minister of Environment and
Forestry, Siti Nurbaya Bakar, that post Brexit there could
be a bilateral agreement that covers the timber trade. As a
follow-up the UK Ambassador proposed beginning
bilateral discussions as early as March next year when
Britain officially leaves the European Union.
In related news, a workshop/dialogue themed "Interactive
Dialogue on the FLEGT Scheme: Boosting Indonesian
Wood and Timber Products Exports to the EU" was
recently held in Belgium. This event was hosted by the
Indonesian Embassy in Brussels jointly with Fedustria, a
Belgian non-profit federation of representing the textile,
wood and furniture industry.
The purpose of the dialogue was to review implementation
of the FLEGT and discuss strategies to increase
Indonesia's wood and timber products exports to the EU.
According to the Deputy General Manager of Fedustria,
Filip De Jaeger, businesses in Belgium report that the
FLEGT licensing system has helped promote trade in the
timber sector between Indonesia and the EU because
importers no-longer have to contend with due diligence
requirements. However, some importers of Indonesian
products said more needs to be done to inform end-users
and consumers on the security the FLEGT system offers.
Indonesia committed to fair trade policies
Indonesia’s International Trade Negotiation Director
General, Imam Pambagyo in the Ministry of Trade, has
said that Indonesia will continue to uphold trade policies
committed to fair trade in order to avoid conflicts which
could hurt the economy.
He said competition in international markets is rising but
that there is a need for Indonesia to take a positive
approach and engage in bilateral consultations and avoid
punitive policies. He said the best approach is for
Indonesian manufacturers to strengthen their
Import restrictions not yet reducing deficit
Sri Mulyani Indrawati, the Indonesian Finance Minister,
has reported that the current account deficit has not been
significantly reduced despite government measures to
limit imports. The current account deficit in the second
quarter was just over 3% of GDP or US$8 billion,
compared to US$6 billion in the first quarter.
In its efforts to reduce the deficit the government
introduced measures to limit imports, including higher
tariffs and a mandatory use of 20% blended biodiesel (
B20 ) for heavy vehicles. The government also postponed
several large infrastructure projects.
More on clearing Karenni teak log stocks
Concern has been raised by environmental commentators
over the decision by the government to allow the Karenni
National People’s Liberation Front to sell log stocks.
The Myanmar Government Spokesperson, Zaw Htay,
clarified this decision when meeting the press in late
September saying some Non-State Armed Groups which
signed a National Ceasefire Agreement with the
Government had approached the National Reconciliation
and Peace Centre (NRPC) seeking approval for trading
previously harvested logs from the areas that they
These groups are slowly coming under the umbrella of the
State but are still largely self-sufficient and need to
In respect of the request from the Karenni National
People’s Liberation Front for permission to sell log stocks,
Zaw Htay said that it this the most recent case in which the
Ministry of Natural Resources and Environmental
Conservation (MONREC) accepted the recommendation
of the NRPC that consideration should be given to
allowing the sale of a specific volume of logs.
Analysts write - MTE had a mechanism to allow this
known as the Modified Procedure (MP).MTE stopped
using this mechanism for harvesting in areas it controlled
but from time to time the MP procedure has been used to
allow Non-State Armed Groups to harvest and sell logs.
According to one retired Myanmar Timber Enterprise
(MTE) official, such cases of MP approvals in the past
were not initiated by the MTE as part of its commercial
operations but were politically motivated.
According to Khu Daniel, a member of Karenni National
Progressive Party (KNPP) Central Committee, KNPP
received permission to harvest the logs now being offered
for sale in 2013 and 2014 after signing a ceasefire
agreement with the government of the time. He points out
it is only now that the current government is considering
allowing the sale of these logs.
Corporate transparency improving steadily says EITI
Myanmar’s efforts to raise transparency within its
extractive industries are slowly bearing fruit. While Stateowned
enterprises have yet to meet international standards
of governance, transparency is nevertheless improving,
according to two reports issued by the Extractive
Industries Transparency Initiative (EITI).
If there is continued progress Myanmar could meet the
strict EITI assessment procedures soon which would
enable the country to be considered as a member of the
initiative. EITI is a global standard for the good
governance of oil, gas and mineral resources and seeks to
address key governance issues in the extractive sectors.
EITI has said that in the past corporate governance in
Myanmar’s extractive industries has been lax and
corruption was an issue common. Indeed, findings from
the two EITI reports reveal shortcomings in SOE
procedures for the granting of licenses, signing of
agreements with the State and payment of taxes.
Efforts to lift Myanmar’s rank on Global Index on Illicit
Myanmar urgently needs to combat illicit trade,
particularly in the areas of logging, mining, human
trafficking and consumer goods, the Transnational
Alliance to Combat Illicit Trade (TRACIT) said after the
country placed near the bottom of a global index on illicit
EuroCham in partnership with Transnational Alliance to
Combat Illicit Trade (TRACIT) and the Economist
Intelligence Unit hosted an Anti-Illicit Trade Forum 2018
in Myanamar, The objective was to improve the
knowledge and understanding of the regulatory
environment and economic circumstances that enable
illicit trade and provide recommendations on priority
Attending the Forum were, anti-corruption experts,
Myanmar government officials and industry stakeholders
and discussions focused on to strengthening Myanmar’s
efforts to fight illicit trade especially through legal reforms
and the tightening border controls.
The local media quoted TRACIT Director-General, Jeffrey
Hardy, as saying Myanmar’s poor showing on the Global
Index on Illicit Trade pointed to inadequate structural
defenses against illicit trade. He urged the government to
work more closely with neighboring countries to address
immediate cross-border illicit trade issues. The illegal
timber trade across Myanmar’s border with China is worth
hundreds of millions of dollars each year.
Bamboo plantations planned for Nay Pyi Taw
U Kyaw Thu, Chairman of Myanmar Bamboo Growers
Association has told the local media (Myanmar Times)
that around 1000 acres of bamboo plantations will be
created in Nay Pyi Taw and the Association and
government will assist enterprises better commercialise
Myanmar joined the International Network on Bamboo
and Rattan (INBAR) in 1997. Currently, it is carrying out
promotion on sustainable management and use of bamboo
resources in cooperation with Thailand International
Cooperation Agency (TICA).
Timber commodity prices move higher
India’s official wholesale price index for all commodities
(Base: 2011-12=100) for August 2018 released by the
Office of the Economic Adviser to the government rose to
120.00 in August from 119.7 in July. The annual rate of
inflation, based on monthly WPI in August 2018 was
4.53% compared to 5.09% for the previous month.
The price index for ‘Manufactured Wood and Products of
Wood and Cork’ Group rose almost 0.6% in August due to
higher prices for veneer sheets and plywood. However,
prices for sawnwood fell slightly in August.
The press release from the Ministry of Commerce and
can be found at:
GDP at 8.2 % in first quarter 2018-19
India's economy grew at a healthy 8.2% in the first quarter
of 2018-19 financial year ending in June. This is the
highest growth in two years and strongest since the first
quarter of 2016.
The manufacturing and construction sectors performed
well achieving over 7% growth while the agriculture,
forestry, fisheries and mining sectors did slightly less well.
For more see:
Kerala floods - plywood mills damaged
Heavy rain and floods have affected the plywood industry
in Perumbavoor as many roads have been washed out
making it impossible to transport logs to the mills. This
has meant a steep drop in production at the 65-plus mills
in the area affected.
Plywood mills in Perumbavoor use mainly rubberwood
from local sources around Idukki, Kottayam and
Pathanamthitta but analysts report roads, especially in
Idukki and Pathanamthitta, are badly damaged and many
of the rubberwood plantations were also damaged by flood
Several mills were flooded and production machinery has
been damaged and several containers of imported veneers
were also so damaged as to be unusable for anything
except boiler fuel.
Growth in exports
Exports of plywood and other wood products during the
2017-18 financial year reached US$881.04 million, up
over 10% year on year. This year exports should get a
boost from the weaker rupee.
On the back of firm demand for imported plantation teak
log traders have been able sustain the rise in domestic
wholesale prices to off-set the higher landed costs due to
the weaker rupee. The unresolved issue of lack of credit
facilities for traders continues to be a major problem.
Locally sawn hardwood prices
The higher ex-mill prices introduced at the beginning of
September are holding and millers are thankful to be
getting some relief from the rising costs of imported raw
materials as the rupee continues to fall against the US
A spokesperson from the Reserve Bank of India said the
bank is closely monitoring the situation but has yet to
intervene to support the rupee.
Improved demand for teak products for the housing
market gave the opportunity for a price increase at the
beginning of the month and the higher prices have been
accepted in the market.
Sawn hardwood prices
Because of the limited demand for imported sawnwood
ex-wharehouse prices for N. American and European
hardwoods remain unchanged from a month earlier.
On the back of firm demand in the housing and
construction sectors plywood manufacturers have been
able to raise margins through the recent price increase.
Now the major concern is the weakness of the rupee and
the impact this has on production costs.
Decorative veneers prices have also been raised by around
3% and the makers of paper overlays have also lifted
prices due to higher import costs.
Deforestation rate falling,
but still a challenge
Monitoring by the National Institute of Space Research
(INPE) has revealed that between 2004 and 2017 the
annual rate of forest clearing in the Legal Amazon fell
75%, from 27,700 km˛ to 6,900 km˛.
According to INPE, between 2001 and 2017 deforestation
in the Cerrado biome also declined from 29,400 km˛ to
7,400 km˛ per year. As in the Amazon biome, the
downtrend was only up to 2012 after which the
deforestation rate rose and moved up and down until 2017.
One conservation strategy adopted by the government has
been the creation of protected areas called Conservation
Units (CUs). Currently, there are 335 federal CUs
according to the Chico Mendes Institute for Biodiversity
In April this year five new CUs were created. CUs are key
to preserving native habitats but problems of falling
budget allocations, insufficient staffing and poor
infrastructure are putting the strategy at risk.
Analysts write - it is not enough to control deforestation;
the challenge is to recover the native vegetation and
Differentiating deforestation from authorised land-use
The Federal Government has created a mechanism that
will allow transparent differentiation between
deforestation and legal land clearing.
An Administrative Ordinance No. 373 from the Ministry
of Environment published in September establishes a
simplified procedure to calculate areas of authorized land
clearing. The data will be compiled by the Brazilian
Institute of Environment and Renewable Natural
The measure aims to provide transparency and to unify,
through systems managed by IBAMA, information on
vegetation changes throughout the country. At present data
are scattered in various environmental agencies at three
levels of government which creates problems in
differentiating illegal deforestation from authorised land
This initiative will contribute to achieving Brazil’s
commitments in the context of the Paris Agreement on
climate change. With the unification of data, the country
will be able to adequately measure and report progress on
the commitment to achieve zero illegal deforestation in the
Brazilian Amazon by 2030.
In August 2018, Brazilian exports of wood-based products
(except pulp and paper) increased 34.4% in value
compared to August 2017, from US$238.6 million to
Pine sawnwood exports increased 11.6% between August
2017 (US$42.3 million) and August 2018 (US$47.2
million). In terms of volume, exports remained almost
constant over the same period, from 205,100 cu.m to
In August tropical sawnwood exports increased 30% in
volume, from 35,200 cu.m last August to 45,800 cu.m in
August this year. In value terms, exports increased 22.4%
from US$16.5 million to US$20.2 million, over the same
Year on year the value of pine plywood exports increased
27% in August 2018, from US$50.6 million to US$64.2
million and in terms of volume exports increased 3% over
the same period, from 177,600 cu.m to182,800 cu.m.
As for tropical plywood, exports declined 23% in volume,
from 16,800 cu.m (US$ 6.5 million) in August 2017 to
12,900 cu.m (US$6.1 million) in August 2018.
Pace of furniture exports rises
The Brazilian Association of Furniture Industries has
published data on production in June and July this year. In
June 34.7 million pieces were produced, 15% higher than
in May. Between January and June 2018, there was a 5.5%
increase in the number of pieces produced according to
Brazilian Institute of Geography and Statistics (IBGE).
Over a 12 month period to June 2018 there was a 9%
The value of Brazil’s furniture exports totalled US$64.5
million in June 2018, a significant increase compared to
May (+43%). In July, exports reached US$70.1 million, a
further 9% increase compared to June.
Three states in the Southern region are the largest
exporters of furniture in Brazil; Santa Catarina State, Rio
Grande do Sul and Paraná accounted for over 80% of
Brazil’s furniture exports in the first seven months of
ADEX and government working
to promote exports
Peru’s exports of wood products between January and July
were worth US$68.7 million, a slight improvement on the
value of exports in the same period in 2017.
Erik Fischer, the Second Vice President of the Association
of Exporters (ADEX) said that renewed cooperation
between the Executive Board for Forestry Development
and the private sector will advance public policies that
promote the development of the forest industry.
Regarding the possibility that the Law on Agrarian
Promotion could also cover the forestry sector, Fischer
said that if this can speed the development of the forestry
and wood processing sectors that would be good. He
recalled that in 2017 wood processing for export supported
around 33,000 jobs.
Data from ADEX shows that most wood product exports
in terms of value were semi manufactures and that
between January to July they were worth US$42 million
representing over 60% of the total.
The main items exported were slats and friezes for
parquet, moldings and other profiled wood.
Sawnwood exports were valued at US$13 million,
construction products US$5 million, veneers and plywood
US$4 million, furniture and parts US$3 million. The main
destination for wood product exports s was China, US$29
million or around 40% of the total exports. The other main
markets are the US (US$7.6 million), Mexico (US$7
million), France (US$6 million) and Dominican Republic
Landmark agreement on foreign trade with US
Peru will further facilitate trade with the United States as a
result of the signing of the Mutual Recognition Agreement
between the National Superintendency of Tax
Administration (Sunat) and the US Customs and Border
Protection Office (CBP).
This agreement recognises the American Alianza Aduana -
Private Sector Against Terrorism (C-TPAT) programme
and the Peruvian Authorised Economic Operator
The US government website says “This mutual
recognition, which is the first signed by the United States
with a South American country, will help facilitate
bilateral foreign trade and ensure the logistics chain,
providing mutual benefits for operators certified under
such programs, allowing them to reduce costs and time in
their activities, which will give a greater level of
competitiveness to Peruvian products.”