2. GHANA

  Ghana to import timber from Cameroon
As a short to medium term measure, Ghana will begin importing timber from Cameroon. The process of finalising a bilateral agreement with authorities in Cameroon is currently underway.

The decision to seek external sources of raw materials stems from the rapidly growing consumption of wood products in Ghana and the reduced availability of raw materials from domestic forests.

Manufacturers in Ghana are being encouraged to take advantage of the imports and produce added value products.

Fire destroys Samartex finished products warehouse
Part of the finished products warehouse of Samartex Timber and Plywood at Samreboi in the Western Region was destroyed by fire and large quantities of wood products were lost in the blaze.

The National Fire Service in the district responded promptly to the emergency and managed to prevent the fire spreading to other warehouses. Samartex Timber and Plywood Company, is one of the largest timber companies in the country.

Encouraging first six month export performance
According to available data from the Timber Industry Development Division (TIDD) of the Forestry Commission, wood product exports from Ghana in the first six months of 2013 was 137,363 cubic metres earning euro 61.4 million.

The half year figures for 2013 show that export volumes increased by 11.9% while the value of exports increased 36.8% when compared to the same period in 2012.

With the exception of Plywood and Parquet Flooring, all other products registered increases in the volume and value of exports in the first half of 2013.

The distribution of product groups during the period reported was as follows;

The EU was the major destination for Ghana¡¯s wood products, accounting for 41% of the total export volume, with Africa, Asia/Far East, America, Oceania and Middle East accounting for 33.07%, 17.54%, 5.98%, 1.86% respectively.

The ECOWAS sub region accounted for 71.5% of the total value of exports of wood products to African countries during the first half of this year.

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3. MALAYSIA  

  August 8 marked the end of the Muslim holy month of Ramadan and was celebrated with a four day long weekend. This, along with what is traditionally a slow month for the timber trade, further dampened business activity.

Weak currency brings joy to exporters
The weakening of the Malaysian ringgit against the US dollar is an advantage for exporters in the timber and plantation sectors as almost all international trade in these commodities are denominated in US dollars.

The ringgit has weakened by as much as 8 ¨C 9% over the last two months, dropping from a high of RM 2.96 to the dollar to as low as RM 3.29. Foreign exchange analysts expect the US$/ringgit exchange to hover around RM 3.10 to US$ 1.00 in the coming months.

It has been estimated that for every RM0.10 weakening of the ringgit to the US dollar the annual earnings, in terms of ringgit, of timber companies in Sarawak will improve as by as much as 10%.

Sarawak log production down
Sarawak log production in the January to May period dropped by more than 700,000 cu.m compared production in the same period last year.

For the first five months, timber companies in the State produced 3.24 million cu.m of logs according to the Sarawak Forestry Corporation.

This level of log harvest works out as an average monthly production of 648,000 cu.m. This is a smaller volume than the average monthly production of 787,500 cu.m/month in 2012. Total log produced in 2012 was 9.45 million cu.m and in 2011 it was 9.61 million cu.m.

The production statistics show a decline in harvests in swamp forests. Hill species harvests amounted to 3.15 million cu.m while the harvest of swamp species was just 530,441 cu.m in the first five months of 2013.

For hill logs, Sibu region is the leading producer with logging conducted along the main rivers such as Rejang, Balleh and Balui in central Sarawak.

Harvests of hill species in Sibu in the first five months of the year totaled 1.32 million cu.m or 40% of the total production in the State. Harvesting in the Bintulu region yielded 1.13 million cu.m while harvesting in the Miri region produced 689,800 cu.m.

From January to May 1.22 million cu.m of meranti logs were produced and the other main species were: kapur 124,970 cu.m, keruing 98,520 cu.m and selangan batu 87,917 cu.m.

Strengthening of demand in Japan expected to lift export prices for Sarawak plywood
The Borneo Post recently carried a story based on a report from RHB Research Institute. According to the Post, this report says plywood prices are likely to rise in the short term because Japanese importers will be buying more.

The post story quotes Hoe Lee Leng of RHB as saying:
¡°In Japan, the aggressive policy easing to reflate the economy has led to higher government spending, aggressive monetary easing and structural reforms.

This should help to promote asset prices that would stimulate consumption and business investment to sustain a recovery over the longer term. These policies have thus led to stronger growth in Japanese housing starts over the last few months¡±.

Projected housing starts are good indicators of future timber demand and in the first five months of this year housing starts in Japan grew 7.2% year on year, to 367,400 units. If this growth is sustained total starts for 2013 year could be 946,400 units.

Hoe Lee Leng further said ¡°According to the management of timber companies we cover, while (plywood) order volume has improved from Japan, prices have not risen significantly yet¡±.

However, given the general lag of four to six months to pass on higher log costs to plywood customers, most companies expect plywood prices to start moving up from September ¨C October¡±.

Diverse markets for Sabah plywood
The Department of Statistics in Sabah has released trade statistics for the first five months of the year.

In this period, Sabah exported sawntimber worth RM150.3 mil. (approx. US$45.71 mil.); plywood RM439.5 mil. (approx. US$133.64 mil.); veneer RM22.8 mil. (approx. US$6.93 mil.); laminated boards RM35.5 mil. (approx. US$ 10.79 mil. and mouldings RM24.5 mil. (approx. US$7.45 million).

The main destinations for external sales of plywood (i.e. exports plus sales to Peninsula Malaysia) for the period January to May 2013 are shown below. Exports to nine countries plus sales to P. Malaysia account for 94 percent of all sales in the first five months of the year.

Exports of small volumes were also made to UAE, Singapore, Hong Kong, India, Saudi Arabia, China, Vietnam, UK, Canada and Australia.
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4. INDONESIA

  Indonesia/EU VPA to be signed in September
The Indonesian government has agreed with the EU proposal that the VPA will be signed on September 30. In a statement the Forestry Ministry¡¯ Director of Forest Products Management and Marketing said the government expects the EU to demonstrate its commitment to promoting trade in legal timber by sticking to the timeframe agreed.

The EU had proposed several dates for the agreement signing as the schedule of the Lithuanian environment minister, who holds the EU presidency, and EU Environment Commissioner had to be coordinated.

Government agencies urged to get serious on timber certification
As wood product importers in the EU now require verified legal products the pressure is on Indonesian manufacturers to secure SVLK certification.

However, SVLK certification by small firms in Bali is moving only slowly and analysts complain there is poor communication between agencies in the central and provincial government.

The chairman of the Association of Indonesian Community Forestry Entrepreneurs has criticised the Ministry of Forestry and the Bali Forestry Agency for not doing enough to assist small companies.

The Association has called on the authorities to coordinate and promote a ¡®reward¡¯ system whereby those securing SVLK certification could have an advantage in for example, allocation of the soft loans provided by the Ministry of Forestry for community forests.

Forest management index launched
The Indonesian government, in cooperation with UNDP and UNREDD, has launched an English version of it comprehensive forest management index.

This index provides an analysis of forest management conditions and their implication for the REDD+ programme.Indonesia is one of the countries that has committed itself to reducing green house gas emissions by over 20% by 2020.

Most fire alerts on land leased to plantation companies
The Tropical Forest Foundation website is reporting analysis of available concession maps from official national and provincial government offices, superimposed on daily fire alerts from NASA. This work was undertaken by the World Resources Institute (WRI), Eyes on the Forest, and the World Agroforestry Centre.

The analysis shows that the bulk of fire alerts occurred on land leased out to plantation companies for the development of large industrial oil palm and acacia plantations.

For the full story see: http://www.tff-indonesia.org/index.php/en/forest-news/4096-research-nearly-a-quarter-of-june-fires-in-indonesia-occurred-in-industrial-plantations

The authors of the report say ¡°There are two caveats to these analyses: NASA¡¯s fire alerts do not indicate the shape and size of the area burned, so it is difficult to accurately determine the use of the land from these data.

More importantly, however, is that if the available maps of industrial concession boundaries for oil palm and pulpwood (acacia) plantations are different from the boundary maps held by companies, the analyses can be wrong ¡ª and many companies are arguing precisely this.

When the ministers of Indonesia, Malaysia, Singapore, Thailand and Brunei met on 17 July to find solutions to the recent haze problem, they stressed the need for Indonesia to provide detailed maps of land use and fire-affected areas.¡±

Using before-and-after-fire images from NASA¡¯s recently launched LANDSAT 8 satellite the data show that about 140,000 ha were burned during the June fire event in one LANDSAT scene (Path/Row:127/059) covering an area of 3.5 million ha (i.e. circa 7.5 percent of Sumatra¡¯s landmass).
The tentative conclusions in the analysis are that:

  Industrial oil palm and acacia plantations accounted for 21% of the burned area

  Many industrial plantations exist on LANDSAT imagery where there are no concessions on           government maps and vice versa.

  Only 4% of the burned area was covered in natural forest before the fires.

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5. MYANMAR

  Prices for non-teak hardwoods far below expectations
Analysts report that, at present, demand in international markets is very poor especially for non-teak hardwoods.

Exports of pyinkado have been severely hit and prices offered at the latest Myanma Timber Enterprise (MTE) sealed tenders were unexpectedly low.

In the July¡¯s sealed tender sale of export quality pyinkado logs prices offered were from US$368 to US$421 per hoppus ton against the MTE¡¯s target price of US$678.

One possible explanation is that buyers were not keen on these logs as they were left over from the previous harvesting season. However, pyinkado is a highly durable wood and does not deteriorate so this cannot account for the steep decline in offered prices.

Teak log sales were at normal levels and prices, the only concern of the MTE is that the Indian rupee has depreciated over recent months and this is beginning to affect demand.

Analysts are quick to point out that despite currency constraints, teak logs from the areas known to produce good quality sell much easier than logs from other areas.

Overall the teak market has eased slightly over the past four weeks.

Exports of teak and non-teak hardwood logs
The figures below illustrate shipment of teak and other hardwood logs during the first four months of the fiscal years 2012-13 and 2013-14.

These comparative figures expressed in cubic metres mirror international market demand for timber from Myanmar.

Analysts point to the overall decline in shipments in the first four months of fiscal 2013 compared to the same period a year earlier.

With a log export ban likely to be introduced in April next year it was anticipated that shipments would increase as buyers sought to increase stock levels but this has not yet been seen.

Seizure of illegal logs reported in daily press
The Daily Eleven newspaper has reported that 57 trucks carrying illegally felled timber were seized within a period of three days along the Bamaw- Momauk ¨C Loigye road in the eastern part of Kachin State.

This is the first time government action to tackle transport of illegal logs has been reported by a local newspapers.

Teak tender prices
The following prices were recorded for teak log sales during competitive bidding on 26th and 29th July during the MTE tender. The next sale will be held in late August.

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6. INDIA

  Revised ¡®Affordable Housing in Partnership¡¯ scheme
When addressing REALTY 2013, the Confederation of Indian Industry (CII) conference on real estate on August 2, Dr Girija Vyas, Union Minister of Housing and Urban Poverty Alleviation said the aim of the soon to be revised ¡®Affordable Housing in Partnership¡¯ (AHP) scheme is to provide half a million houses to economically weaker and lower income groups.

A summary of the minister¡¯s statement can be seen in a CII press release at: http://www.cii.in/PressreleasesDetail.aspx?enc=hVStv2IOaSXkpbtAMD72jY+An+KHQnMZqv+eF7+xuZw=

Through this scheme, the government intends to encourage partnerships between various agencies such as the central and state government housing boards, development authorities, local urban bodies and industry for creation of affordable housing.

The scheme will provide several supply side as well as demand side incentives such as concessions on development charges, service tax and direct tax exemptions, encouragement to foreign investment in affordable housing and reduced stamp duties.

Business confidence slips in June
Indian companies became more pessimistic about the economy in the second quarter as the business confidence index dropped slightly from levels in the first quarter.

The New Delhi based Associated Chambers of Commerce and Industry reported that more than 50% of respondents to their recent survey now feel the economic situation has worsened.

The main factors negatively affecting industry were stated as weak domestic and international demand, the weakening rupee, the high cost of credit, rising prices for raw materials and wage increase pressures.

¡°The current situation calls for urgent policy initiatives both by the Reserve Bank of India and the central government to rescue Indian industry from further deterioration as it may significantly impact employment and consumer demand,¡± said a spokesperson from the Associated Chambers of Commerce and Industry.

Indian companies eye overseas plantation resources
Ensuring adequate and uninterrupted supplies of raw materials at reasonable cost has become the key focus for all wood based industries in India.

As the number of enterprises increases and as others increase capacity the problem of raw material supply increases. Companies are realising that the best solution is to have their own plantations.

Several Indian companies have sought to invest in Malaysia, Myanmar and Vietnam and have plantations and manufacturing capacity in those countries.

Taking up the challenge is India¡¯s JK Paper Mills which, reports suggest, is discussing large scale plantation development with the Government of Myanmar.

The company is also considering establishing a paper mill with a 70,000 tonne annual capacity. The total investment is said to be worth around US$ 30 million.

At its home base in India, JK Paper Mills has extended its activities and in August its new plant at Raygada in Odisha will start production (pulp mill capacity of 215,000 t/yr and paper capacity about 150,000 t/yr).

This will lift the paper production capacity from the present 290,000 to 450,000 tonnes a year. The company¡¯s total wood requirement last year was 474,000 tonnes with 35-40 per cent coming from its own plantations.

Because of the additional production capacity the company will have to source a further 200,000 tonnes of raw material. It is noteworthy that over the past year the cost of domestic pulp wood increased 35%.

Price trends for domestic plantation teak logs in Kerala, South India
Approximately 50,000 cubic metres of teak logs are sold annually through auctions in the State of Kerala. The state has a wide network of timber depots where auctions are regularly held.

TeakNet and its Coordinator Dr. M.Sivaramhave reported the latest teak price trends. When compared with prices in 2005 and 2009 the current upswing in prices is rather severe as illustrated in the table below.

Prices for plantation grown teak logs from Kerala are shown below. Prices are per cubic metre Ex-depot.

Prices for imported plantation teak
Fluctuations in Indian rupee continue but the level of plantation teak imports continues unchanged a reflection of the firm demand in the country.

Plantation teak prices are shown in the following table.

Domestic ex-sawmill prices for air dried sawnwood cut from imported logs. Price per cubic foot is shown below.

Slowing demand continues to hold down price structures.

Prices for imported sawnwood
Ex-warehouse prices for imported kiln dry (12% mc.) sawnwood per cu.ft are shown below.

Plywood prices
Domestic demand for plywood continues to grow.

7. BRAZIL

  Better communication key to influencing consumption of sustainable tropical timber
A dialogue on sustainable tropical wood organized by the Friends of the Amazon Network (RAA), in partnership with WWF-Brazil and Traffic has been held in São Paulo.

The purpose of the meeting was to strengthen communication in the sector with the aim of creating a governance model that can influence consumption of sustainable tropical timber in the domestic market

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The participants concluded that restructuring of the sector is required to address issues such as monitoring of sustainable harvesting, surveillance, transport and taxation.

The meeting was attended by representatives of forest producers, certified forest community cooperatives, certified companies, labour unions, civil construction companies and NGOs.

The main issues that need addressing according to the participants are the lack of information and transparency in the timber market and the need to establish public policies that promote the sector.

Working groups were established to prepare proposals for cooperation and public policy development in the sector. Before November this year additional meetings will be held to discuss and strengthen the proposals suggested by the participants.

Furniture makers in Cuiab¨¢ seek support to boost local manufacturing
Entrepreneurs and government representatives from the state of Mato Grosso in the Amazon region gathered to discuss the establishment of a furniture cluster in Cuiab¨¢, in the V¨¢rzea Grande area. A working group was set up to speed up the process of establishment of a timber processing centre.

Successful restructuring of the furniture sector in the V¨¢rzea Grande area will generate more employment opportunities, strengthen the wood manufacturing sector and improve the competitiveness of the sector.

The idea for establishment of a furniture cluster in the region came from local entrepreneurs who are seeking ways to garner support from the government to boost the local manufacturing industries.

The State Secretary for Industry, Trade, Energy and Mining is reportedly enthusiastic about this idea and it is anticipated that support for the creation of the furniture cluster can be included in the governmental programme ¡®Development Plan of Local Productive Arrangement¡¯.

Timber sector performance not keeping pace with other industries
The consensus is that, due to the lack of governmental incentives for the timber industry, the sector is failing to achieve the levels of growth by other industries which is resulting in a declining contribution to exports.

This is demonstrated in the municipality of Guarapuava where timber is one of the most important sectors of the economy.

According to the Ministry of Development, Industry and Foreign Trade, even though overall wood product exports from Guarapuava have increased since 2009 (from US$14 million to US$ 39 million last year), the share of wood product exports in total exports has fallen sharply from 86% in 2011 to just 28% in 2013.

This problem was discussed by the Wood Sector Council of Federation of Industries of Paran¨¢ State (FIEP) recently and proposals were made on industrial policy and market development that would support the industry.

During a meeting of the Wood Sector Council of the National Confederation of Industry a comparative analysis of the timber sector contribution to the economy between 1996 and 2013 was presented.

It was revealed that in 1996 the wood sector was responsible for 3.4% of total jobs generated but by 2013 this had dropped to 2.6%.

In terms of trade, exports of wood products fell by more than half and this decline was attributed mainly to a reduction in construction activity in Europe and in the United States as well as disadvantageous exchange rates.

Furniture imports in São Paulo up almost 60 percent
Brazilian furniture exports were US$66 million in May 2013, representing a 4.5% increase over the same month in 2012. On the other hand, the country's furniture imports were US$62.1 million, representing a 6.5% decrease during the same month in 2012.

Furniture exports in May from the state of Rio Grande do Sul, the major furniture producing state, registered a high of US$19.6 mil. (+21%) whereas state furniture imports totaled US$4.1 million, a 69% increase year on year.

Of particular significance was the import of furniture making equipment that registered growth of over 20% between January and June 2013 compared to the same period in 2012.

São Paulo state continues to be the main consumer of imported furniture and imports grew almost 60% in value during May 2013 compared to a year ago. The states of Paran¨¢, Santa Catarina and Rio Grande do Sul together accounted for around 25% of Brazil¡¯s furniture imports.

8. PERU

  Potential for US$ 5 billion forest product exports
Peru's forest product exports have the potential to grow to as much as US$5 bil. in 10 years because of the positive impact of the new National Forestry Policy and Wildlife (PNFFS) according to the Ministry of Agriculture and Irrigation.

The ministry spokesperson stressed that at present wood product exports contribute just 1% to GDP but this can change as the sector will benefit from the sound legal framework provided by the new forest policy.

Draft regulations for forest policy ready for discussion
Forestry Law would take effect in March 2014 and consultation would be September. The Forest Act and Wildlife will apply from the second quarter of 2014 said the Ministry of Agriculture and Irrigation (MINAGRI).

The Minister of Agriculture and Irrigation, Milton von Hesse, explained that the first draft of the regulations in the Act have been drafted and will now be discussed with stakeholders.

The minister reiterated that the new National Forestry Policy and Wildlife Act is just one step towards a comprehensive plan to promote the sustainable use of the country¡¯s natural resources.

Central Reserve Bank of Peru intervenes to support Nuevo Sol
The sol/dollar exchange rate has been very volatile over the past weeks. On August 6 the average selling price of the dollar was Nuevo Sol 2.796 per dollar.

A press release from the Central Reserve Bank of Peru (BCRP) says that the bank intervened in the foreign exchange market selling US$190 mil. in an effort to support the sol.
See: http://www.bcrp.gob.pe/home.html

The movement of the sol against the US dollar is shown below.

Strong US economic growth in the second quarter strengthened the dollar and local banks were big buyers as they sought to improve their positions.

After appreciating to historically high levels in 2012, the Nuevo Sol has weakened more than 9.5 percent so far this year.

9. GUYANA

  Growth through innovation forum
A National Economic Forum, scheduled from August 14 to August 15 and hosted by the National Competitiveness Strategy Unit (NSCU) will discuss issues relevant to the theme ¡°Promoting economic growth and development through innovation, diversification and partnership¡±.

The Forum will feature presentations by President Donald Ramotar, Finance Minister Dr Ashni Singh, Private Sector Commission Chairman Ronald Webster and other representatives of the government.

The National Competitiveness Strategy (NCS) was launched in 2006and comprises government representatives, private sector stakeholders and labour unions.

The NCC also promotes the strategies, locally and internationally; finds solutions to address various challenges; and seeks to identify synergies among donors to improve the effectiveness of lenders¡¯ initiatives.

EU support for Guyana REDD plus activities
Guyana is one of four countries to benefit from a euro 2.7 million regional REDD+ project supported by the European Regional Development Fund (FEDER), the French Global Environment Facility (FFEM) and the government of French Guiana.

According to a press release from the Office of Climate Change work will be supported for an estimation of land cover changes and forest carbon stocks; identifying deforestation and degradation drivers; and modelling land use changes and socio-economic development.

At the first meeting of the project, held on August 8 in Paramaribo, Shyam Nokta adviser to the president and head of the Office of Climate Change said this project was initiated when Bharrat Jagdeo was President.

He said further that Guyana is willing to share experiences and lessons learnt while at the same time seeking support as the country continues to build a REDD+ model.