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Japan Wood Products Prices
Dollar Exchange Rates of 10th August 2004
Japan Yen 110
to a survey conducted by the Japan Forest Products Journal, major house
builders had a good order book position in the first and second quarters
Housing Corporation's first quarter orders were up 13% on the same quarter
last year and Chuo Jutaku Co., Ltd. of Polus group reports 15% more
orders. Companies report that first time buyers continue to be active and
buyers in the plus fifties are also investing more in housing.
Forestry, which specializes custom made houses, reported a 4% growth in
business in the first quarter while for Mitsui Home, the results were up
analysts say the prospects for the housing market for the second half year
are uncertain, with many negative factors such as a possible increasing in
housing loan interest and sharp competition between builders. Housing
companies say they now need to watch closely the supply and demand of
detached units built for sale to the first time buyers so as not to
over-extend on building.
log prices weak in domestic market
a downward trend in FOB prices in producing regions, tropical log prices
in Japan are softening. Log importers are still not able to pass on the
full landed costs to their customers in Japan and the buyers are now
demanding big price reductions.
August FOB prices for Sarawak meranti regular logs for Japan were at
US$158 per cubic metre. With ocean freight at US$33 per cubic metre, on a
full load basis and exchange rate of Yen 110 per dollar, the landed cost
equates to about Yen 6,400-6,450 per Koku. However actual trading prices
in Japan are reported at Yen 6,200-6,300 which means the importers lose
about Yen 200-250 per koku or around 3-4% of the CIF price.
to prices in late July, the current prices are at Yen 6,300, down by Yen
100 per koku and the pressure from Japanese importers on producers will be
for reduced prices, at least until the rain season starts in October -
log importers are trying to minimise their losses but as long as the
profitability of the plywood manufacturers remains tight it is hard for
the importers to lift the log prices.
to late July, the current FOB of about USUS$155 for Sarawak meranti
regular is US$3-4 down. Small meranti FOB prices are US$130-133, about
US$25 lower than regular grade logs. Super small FOB prices are about
US$115-116 and both small and super small FOB prices are US$2-3 lower than
late July. Small logs from Sabah are reportedly offered at lower prices,
which dragged Sarawak small log prices down.
indicate that ocean freight costs for Sarawak loadings are firm at about
US$33.00-33.50 per cubic metre on full load basis. Other reports suggest
that shipping companies are reluctant to send vessels to PNG and very few
contracts are being made for PNG logs except for mersawa and some
plantation logs. Mersawa FOB prices are at about US$160 and calophyllum
logs are at about US$135. Due to poor weather, log production in PNG
Ministry of Agriculture, Forestry and Fisheries is proposing an
environmental tax to promote measures to prevent global warming and say
the revenue will be used for forest protection.
a tax has been suggested in the past but this is the first time that
details of a proposed tax have been clearly set out. Japan has agreed to a
goal of a 6% reduction of emissions of greenhouse effect gases under the
Kyoto Protocol. The plan is to account for 3.9% of the 6% by forest
absorption of carbon dioxide.
say that, with the budget allocated for achieving reductions, by 2012 the
goal seems unachievable. Japan has an annual budget of Yen 300 billion for
global warming but only a small part of this budget is for forestry
measures so an source of finance is required if the target for forest
protection is to be achieved, hence the new tax.
larch prices down
larch log prices had been leading those of other species but, after four
months of high prices at about USUS$115 per cubic metre they have fallen
to around USUS$110 per cubic metre. The reason for this say the Japan
Lumber report, is that plywood mills slowed purchases of larch logs since
ample inventories had been built up. The other reason is that ocean
freight costs have eased slightly. For the future traders doubt if prices
will fall further as Russian suppliers are resisting any lower offers from
American log import
total volume of North American logs imported in the first half of the year
was 1,970,000 cubic metres, 8.6% more than the same period last year.
sawnwood imports from North America were reported at 2,080,000 cubic
metres, 5.3% up.
logs, Douglas fir imports increased by 17% and accounted for 79% of total
American log imports. The increased interest in Douglas fir is attributed
to the steady demand from large sawmills in Western Japan.
Hemlock log imports, used mainly by small inland sawmills, declined
because of the difficulty in cost effectively delivering small volumes to
numerous ports and because of increased ocean freight costs.
For more information on the
Japanese market please
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