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China Wood Products Prices

01-15th January 2014

US Dollar Exchange Rates of  10th January 2014
China Yuan 6.

Report from China 

 Export growth falls but fundamentals strong
The pace of growth in China's exports slowed in
December but not too much should be read into this as the
base data for December 2012 was changed and the impact
of government action to curb currency transactions
disguised as exports which, in the past, inflated export
figures. In December exports rose 4% year on year
according to China‟s Customs Administration markedly
slower than the almost 13% rise a month earlier.

In contrast, China‟s imports rose 8%, up 3% from
November levels and much higher than analysts had
expected. This rise in imports is fuelling optimism that the
domestic economy is strong despite the impact of the
recent global downturn.

Weak global demand and a strengthening domestic
currency along with rising labour costs are eating into the
competitiveness of Chinese manufacturers but if demand
in the US and EU improves this year output from China
will rise.

Producer price and purchasing price indices drop
In early January the December 2013 data on producer
prices in the industrial sector were released by the
National Bureau of Statistics of China. See:

The December Producer Price Index (PPI) for
manufactured goods dropped 1.4 percent year-on-year.
The purchasing price index for manufactured goods also
dropped almost 1.5%.

For the whole of 2013, the PPI fell 1.9% year-on-year
while the purchasing price index for manufactured goods
went down by 2.0% year-on-year.

Slowing pace of consumer price increases
The National Bureau of Statistics of China has recently
released data on consumer price movements for December
2013. see:

In December, the consumer price index (CPI) rose 2.5%

The survey shows that food prices went up by 4.1%, while
the non-food prices increased 1.7%. Prices of consumer
goods were up by 2.2% and service prices grew by 3.3%.
In 2013, the overall consumer prices were up by 2.6%
compared to 2012.

Tariff rate changes on some wood products
China‟s revised customs tariff plan for 2014 entered into
force as of 1 January 2014.

Some adjustments have been made to tariffs for wood
products. The tariff rate for both veneer for furniture
decorative panel (tariff code 44089019) and rotary veneer
for plywood (tariff code 44089029) was 3% but the 2014
provisional tax rate for both items has been reduced to1%.
A new code had been added, 4403.2050 for douglas fir.

The rates in the export tariff schedule remain unchanged
For more see: www.e-tochina.

Green Home logo for furnishing launched
In January this year a "3G logo for Green Home
Furnishing Material " was launched by the China Interior
Decoration Association and the China Wood-Based Panel
Distribution Alliance. At the launch five major enterprises
became the first licensed users.

This logo denotes values for formaldehyde and total
volatile organic compound emissions at three levels G1,
G2, G3. In addition flooring and woodbased panel items
are energy rated. G1 denotes non-formaldehyde levels, the
highest level of environmental protection. Analysts report
that even the lower limit G3 is below national minimum
standards and equates to Japan‟s 'F4 Star'".

Despite the improvement some local experts think that
China's current environmental standards on flooring and
woodbased panels require greater standardisation as some
indicator limits are inconsistent which results in variable
product quality, some good and some bad.

There is much more to do, say analysts, to close the gap
between China‟s current home furnishing material
standards and those in developed countries. However
analysts recognise the adoption of the "green home
furnishing material" logo will contribute to consumer
safety and satisfaction.

National plantation strategic alliance established
In late December 2013 a national timber reserve strategic
alliance was established by the State Forestry
Administration and Beijing Forestry University.

This alliance will promote non-profit cooperation and
voluntary participation by the private and public sector
entities involved in plantation establishment, production,
management, scientific research and teaching.

The alliance will build a development platform linking
timber businesses and national and international
institutions for resource sharing.

The first tasks will be:

 strengthening the relationship between
stakeholders and to assist enterprises in
marketing, standardisation and management.

 building the information exchange platform

 strengthening the communication among the
private and public sector to promote technical
exchange, coordination and cooperation

 strengthening links with international

Northeast timber harvest set to fall
On 2 January 2014, the State Forestry Administration
issued the annual timber production plan on the Northeast
and the Inner Mongolia state-owned forestry enterprises.
The total harvest is set at 7.789 million cubic metres,
down 14% from 2013.

The states that harvesting in the natural forest in
Daxing‟anling, Xiaoxing‟anling and Changbai Mountain
forest regions will be stopped by 2015.

On the basis of the 2014 harvesting plan the Heilongjiang
Forest Industry Sales Administration adjusted the level of
the Northeast timber minimum protective prices for spring
2014. A total of 17 items are included in the price
adjustment scheme. The average increase in the price of
logs will be 6.5%.

First log imports from Nagano, Japan
The Nagano Forest Association has indicated that some
1,800 cubic metres of logs will be exported to China in

This is the first time logs will be shipped from the
prefecture to China. Shippers report that the price obtained
from Chinese buyers is higher than the price paid by
domestic mills. It is understood these logs will be
processed to wood-based panels and furniture.

Japan recently revised its national forestry subsidy system
such that the more a Japanese enterprise harvests the
greater the subsidy. It is possible that log exports from
Nagano will increase this year.

3 mil. tonnes of logs pass through Fujian Putian Port
According to Fujian Putian Entry-Exit Inspection,
Quarantine Bureau, log imports through Fujian Putian Port
in 2013 were 3.15 million tonnes, a year on year increase
of 82%, a new record volume. The logs are imported
mainly from the US, Canada, Russia, Australia and

Enterprises in the port area have established an efficient
supply chain linking transport processing and distribution.

Analysts report that efficiency in the port has improved
greatly. If weather conditions allow Customs and
Immigration officers board the vessels at anchor to go
through the entry formalities with the aim of zero

Guidelines for due diligence on timber imports from
Papua New Guinea

The EU/FLEGT Newsletter of Nov/Dec 2013 says
guidelines for mitigating risk when Chinese enterprises
import tropical hardwood from Papua New Guinea were
discussed at a workshop held by the Center for
International Trade in Forest Products, the China State
Forestry Administration and The Nature Conservancy.

The aim was to develop guidelines to help Chinese
enterprises conduct due diligence when sourcing wood
from Papua New Guinea.

During the workshop, participants from government
agencies, research institutions and civil society assessed
proposed guidelines and suggested improvement in the
practicality and applicability and required clarification on
how Chinese enterprises can verify documents from Papua
New Guinea.


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

Source: ITTO'  Tropical Timber Market Report

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