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11 – 15th April



 No clear picture on how pandemic is affecting timber

Almost all African countries are reporting cases of the
corona virus and as the number of cases continues to grow
more countries are finding the virus has spread beyond the
main cities. Of the 47 African member countries of the
WHO, almost 60% have reported cases in multiple
locations compared with around 21% at the beginning of

There is no clear picture on how the pandemic is affecting
timber companies. There are considerable variations in
responses to the pandemic among African countries which
makes analysis difficult. What is certain is that jobs are
being lost and African economies will see a drastic drop in
export earnings from the timber sector in the coming

Sawmills in Cameroon cannot operate
The Cameroon Minister of Health, Dr. Malachie
Manaouda, has warned virus infections could shortly surge
and the ministry has launched a mass screening exercise.
The strategy adopted to slow the spread of the virus will
focus on raising awareness and regulating the flow of
people in crowded areas. Sawmills in Cameroon are
reportedly not operating as they have few orders, no log
supply and because of the corona virus control measures.

DRC lockdown
It has been reported that a few days after the Democratic
Republic of Congo ordered a complete lockdown of
Kinshasa Province residents faced problems getting
household essentials. More than 11 million people have
been told not to leave home except for food supplies.
Movement of people in the commune of La Gombe, where
most government offices and timber companies have
offices, is restricted. ATIBT reports that logging
companies are not included in the movement ban.

Shipments continue from Equatorial Guinea
In mid-March Equatorial Guinea declared a National State
of Alarm to facilitate the mobilisation of resources needed
to stem the spread of corona virus. An emergency fund
was created to try and limit the spread of infections.

It has been reported that a large number of containers with
Kevazingo sawnwood have been seized in Bata Port. The
authorities say when the pandemic is over inspection of
the legality of the shipments will be conducted. Analysts
report that log exports continue and that shipments
comprise mainly okoume and redwoods such as tali,
padouk, some bosse and doussie.

Some companies still operating in Congo
ITTO’s IMM correspondent for Republic of Congo reports
that pandemic related impacts are already making
themselves felt where a strict lockdown has been in place
since 31 March and borders were closed.

While some companies, including the larger ones in the
North of the country, are still operating a number
(especially in the South) have suspended operations
altogether, and the sector as a whole has cut production.

Other sources of information
The most current information on the impact on the timber
sector in Ghana can be found on page 3. Another source of
information on the situation in Central and West Africa is
is the ATIBT and the following sites are recommended.



 Survey - Impact of pandemic on timber sector

1. Are mills still operating?
Mills in the country with available raw materials and
orders are currently in production, as government
announced COVID-19 measures, so far, were specific and
restricted to the movement of persons. The measures
exempted the production and movement of goods and
essential services. Factory workers who show evidence of
any form of IDs were not affected by the movement
restrictions but expected to comply with social distancing.

These are measures by Executive Instrument (EI) imposed
under EI 64 and EI 65 on Public Gatherings and restricted
movement of persons within selected zones respectively.

2. Have workers been laid off?
No timber sector workers have been laid off as at the time
of this report. Ghana employs about 1.2 million workers,
of which 600,000 are public sector workers. The
remaining are either self-employed or with private

All public and private schools in the country were the first
to be closed down by government on 16 Mach 2020.
Recently unconfirmed scanty reports indicate, some
private school teachers have either been laid off, about to
be laid off or may not be paid for the period at home.

3. Are laid off workers receiving payments?
There are no known lay offs in the public sector so
workers are still receiving their wages and salaries.
Government has also already announced 3-months various
levels of water and electricity reliefs for Ghanaians,
stressing on judicious of these utilities.

It is anticipated with these measures, employers who do
not meet production targets could likely reconsider cutting
down on workforces. This will also depend on the
availability and sustainability of packages promised by

4. Are companies already receiving govnment support?
The Government has recently received parliamentary
approval to spend an additional GHC1.2 billion (or
US$210 million) for 2020 (April to June) to support
businesses, and to minimise job loses.

The government has promised some financial support but
companies are yet to know the fine details of who will
benefit or not and how much. Government has also pushed
forward the payment of taxes and VAT.

Government also plans to support companies by absorbing
100% water and 50% electricity tariffs for the months of
Apr to Jun.2020. These are expected to reflect on their
month end bills. The Ghana Association of Bankers has
also announced a 2% cut in interest rates on loans.

5. Have orders (domestic/international) been
Mills outside the lockdown zones are currently producing
for both the domestic and international markets.

Ghana announced its COVID-19 case just last month. The
Timber Industry Development Division (TIDD) of the
Forestry Commission (FC) continued to process and
approve contracts for export.

6. Estimated % change in shipments since Jan 2020 to
Wood product shipments have not suffered any setback.
However, arrivals at destinations in China, EU, US and
others could suffer delayed port clearance and possible
demurrage depending on each destination. But as cargo is
in port this could also help eliminate any anticipated
shortfalls by the final consumer.

7. Are mill stock levels increasing?
Factories largely produce to market rather than to stock.
The only challenge is production run could take a little
more time to complete, due to social distancing which
could affect the number of shift workers at any particular
point in time.

8. How much time would be required to ramp up
production to pre-crisis levels?
Depends on the factory and its outstanding orders, all
things being equal with raw materials availability,
production levels could be raised within 3-months.

9. What will be the main challenges in ramping up
Cash flow, if factories have incurred overheads beyond
their control from putting in place the appropriate
measures and the required Personal Protective Equipment
(PPEs) to combating workplace virus spread.

10. Are containers still being loaded at the port?
Despite land border closures to people and goods the
Ghana Ports and Harbours Authourity (GPHA) continue to
handle all sea import and export cargoes through the port.
Shipping line vessels also call the ports as scheduled
without any interruption.

Meanwhile protocols on social distancing and movement
of persons are strictly enforced.

11. Are containers readily available?
Yes, with the scheduled vessel calls empty containers are
discharged on arrival for subsequent shipments.

Massive virus testing in Ghana
The Ghana Health Services has reported that as of 10
April 2020 27,346 people had been tested with 408
showing positive for the corona virus.

Of the 408 confirmed cases, 205 were reported from
routine surveillance, 88 from enhanced surveillance
activities and 115 from travelers under mandatory
quarantine in both Accra and Tamale.

Regions that have reported cases are Greater Accra,
Ashanti, Central, Eastern, Northern, North East, Upper
East and Upper West regions.


Manufacturing sector hard hit
The government has announced additional measures to
check the spread of the corona virus in Ghana. The 2-week
lock down in the cluster areas in Accra and Kumasi has
been extended by 7 more days to end around 20 April
when the situation will be assessed again.

Manufacturers, including timber processing companies, in
the lock down areas have been severely impacted as they
have been told to cease operation. Only companies
providing essential services were allowed to continue.

Factories in non-lock down regions, while still operating,
are challenged with maintaining full production due to the
government directive on ‘social distancing’ and ‘workingfrom

Fear amongst workers has compelled factories to operate
with only a skeleton staff and fewer shifts. Companies are
continuing to try and produce to meet both local and
international orders but they are seriously handicapped.
With some workers at home but still on the payroll
company reserves are quickly being exhausted.

Government support package
The government intends to launch a Coronavirus
Alleviation Programme (CAP) to support small
businesses. The aim of the CAP is provide financial
support to minimise job losses.

The domestic press in Ghan has reported that parliament
has approved a fund worth GHc1.2 billion (approx.
US$210 million) for addressing the economic downturn
and is offering low interest loans for SMEs.

In a press statement, the Association of Ghana Industries
(AGI) welcomed the government’s plan to contain the
spread of the virus and at the same time assured its
members that the association will continue to address their

Services and port operations functioning
Services provided by the Forestry Commission, the Ghana
Ports and Harbours Authority, the banking sector and
shipping companies have not been interrupted. All
inbound and outbound shipments are moving.

According to the private sector, in view of the Corona
virus impact on Ghanaian businesses, especially small and
medium-sized enterprises (SMEs), it is very important for
the government to urgently constitute a Coronavirus
Supply Chain and Trade Disruption Team to assist in
addressing specific supply chain issues and challenges
affecting businesses.

The global business leaders have predicted that the impact
of the Coronavirus on Global Supply Chains will be felt in
the next ninety (90) days from March, and it is imperative
for Ghana to institute measures to mitigate its economic
consequences on the nation.


2019 timber exports recorded 9.75% Y-O-Y
In 2019 Ghana exported a total 300,445 cu.m of wood
products earning euro 150.63 million as against 332,927
cu.m and euro187.87 million in 2019. For 2019 there was
an almost 10% in export volumes and there was a
significant (almost 20%) drop in export earnings.

The drop in 2019 volumes, say analysts, could be
attributed to the poor performance of some products
namely sliced veneer (-5%), billet (-15%), air-dried
lumber (-15%) and overland sliced veneer (-32%).

The leading export products in 2019 were air and kiln dry
sawnwood and billets which accounted for 58%, 16% and
8% respectively of exports. The main species were
exported were teak, wawa, ceiba, mahogany and black

Three major markets all impacted by global pandemic
Ghana’s timber exports were shipped to five regular major
markets which in order of size were: Asia (67%), Europe
(16%), Africa (11%), America (4%) and the Middle East
(2%). All these regions have been impacted by the
pandemic so Ghanaian producers are bracing for a sharp
weakening of demand.


 Lock-down extended
A Movement Control Order (MCO) came into force for
the period 17 till 31 March as part of the government’s
efforts to manage the corona virus epidemic in Malaysia.
The MCO was first extended to 14 April and then
extended yet again to 28 April.

The MCO is equivalent to a “lockdown” whereby
everyone has to self-isolate at home and only go out for
essentials. Only essential services are allowed to operate.
Workers in non-essential services are asked to work from

Analysts report that production in the forestry and timber
sectors has slowed drastically, though trade associations
are working with the authorities to allow at least partial

Some states in such as Sarawak and Johor have permitted
scaled down manufacturing operations. It is understood
that manufacturing in these states is limited within specific
timber industrial clusters and a cap has been placed on the
number of workers allowed to return to work.

Private sector face supporting livelihoods of timber
sector foreign workers

Muar Furniture Association (MFA) president, Ong Yeou
Huan, has outlined to the government the likely impact of
the virus epidemic in Malaysia on the furniture sector.

He pointed out that in 2019 Malaysian furniture exports
contributed around RM10 billion to the country. He also
pointed out that approximately 80% of the furniture
industries in Muar are SMEs and that manufacturers in
Muar contributed nearly 60% of Malaysia’s total furniture
exports in 2019.

Ong said the MFA forecast 2020 exports could reach
RM12 billion this year but this is unlikely because
production has been disrupted and it will take time until
demand in the main markets recovers. The slow-down in
the industry and the effect it is having on the workforce is

Ong reminded the authorities that the furniture
manufacturing sector depends on thousands of foreign
workers, but the government stimulus package appears not
to include livelihood support for such workers and that the
burden of supporting these laid off workers is falling on
furniture manufacturers.

To emphasise the risks to companies the MFA conducted a
survey which found the cash reserves of 48% of the
factories were exhausted by March 2020; 38% of the MFA
members indicated that they anticipate losing RM1 mil. to
RM5 mil in the next six months. Most members assessed
that the government's support package will not be
adequate to allow the companies to maintain their business
due to huge losses.


Association pleads for part time operation to pay
workers and utilise deteriorating raw materials

The issue of worker’s wages has been highlighted by the
Sabah Timber Industries Association (STIA) president
Chua Yeong Perng. The domestic media report him saying
“If remedial action is not taken during and after the
Movement Control Order (MCO), the repercussions would
be irreversible.

The Sabah timber sector employs around 30,000 fulltime
employees and between 5-10,000 daily paid or part-time
workers. Chua said the majority of timber companies in
the State would struggle to sustain existing payroll
commitments for much longer and that around half the
workforce are at risk of losing their jobs.

The STIA has estimated that there are approximately 120
containers, carrying goods worth RM 9-10 mil. held up in
factories and ports and there are approximately 100 -
120,000 cu m of felled logs valued between RM35-45 mil.
in inventory and that the quality of these logs is

In addition, downstream mills are now faced with the
critical problem of wood adhesive shelf life expiring. If
partial production is not permitted over the next few days,
it is estimated 964 metric tonnes of plywood and
woodworking adhesives will need to be disposed of. The
value of adhesives and the disposal cost could total
between RM5-8 million Chua said.

The STIA has appealed to the government to grant special
permission during the current MCO period for export
shipments to be dispatched and in order to avoid massive
adhesive disposal problems selected factories with
expiring adhesives be allowed to restart production in
order to utilise their adhesive stock and deliver wages to



  Survey - Impact of pandemic on timber sector

1. Are mills still operating?
Most wood industries are still operating, but they
unfortunately are decreasing production. Some factory
operations will continue for the next few months since
Indonesia has implemented a semi-lockdown in Jakarta
beginning 10 April to be followed by a lockdown in West
and East Java in the near future.

Another cause of lower production is the postponement of
orders by importers in the European Union, America and
parts of Asia. However, Indonesia's wood product exports
for the first quarter 2020 have not been seriously affected
by the pandemic. The types of products that experienced a
decline in exports were HS 470329 (Wood pulp; chemical
wood pulp) and HS 442199 (Wood; not of bamboo).

2. Have workers been laid off?
Partly, a sort of an interim lay off. Some companies apply
a shift-based work to minimise the production cost.
(HIMKI indicated that lay offs total 280,000).

3. Are laid off workers receiving payments?
They are being paid but not full payment (based on
agreement). Some companies still pay workers with full
wages, but the production target is decreased.

4. Are companies already receiving government support?
Not yet, the government is still assessing data from
impacted companies and workers affected by lay offs.
Some associations propose government support such as
relaxation/reduction of PPH tax for the companies,
reduced regulation of import and subsidy for 180,000
workers monthly wages.

5. Have orders been cancelled?
Orders from the international buyers, especially the
countries badly affected by the pandemic, have been
postponed. However, countries less affected continue to
place orders, although the export process at the port is
slightly hampered due to restrictions on working hours and
the implementation of the shift work system. This will get
worse for the next few months due to strict business and
social interaction restrictions.

6. Estimated % change in shipments since Jan 2020 to:
China, EU, US, Others
The exact figure cannot be obtained yet but exports to
China are moving but exports to Europe in countries such
as Italy stopped in February/March.

7. Are mill stock levels increasing?
Stocks of finished materials are accumulating because the
goods that are ready to be sent do not get loaded.
Estimated rise in stocks 70%.

8. How much time would be required to ramp up
production to pre-crisis levels?

Maybe more than 1 year provided the government gives
full support and provides incentives for industries related
to reduction of taxation and bank interest rates. For the
Plywood industries, it depends on market conditions, if
export destinations have reopened their markets the
industry will be ready to supply soon.

For wood working companies, If the government provides
assistance to the industry in the form of tax breaks,
simplification of export regulations, funding assistance for
co-affected workers the time needed to recover the
company's economic conditions will be fast.

9. What will be the main challenges in ramping up
The main challenges for increasing the value of wood
production are: There is a decline in European and
American market demand, while customers continue to
demand delivery of goods on time when the government
implements a lock down policy.

The government needs to eliminate the technical
verification policy (LS) to reduce bureaucracy. Company
cash flow is disrupted and the government has not yet
implemented a policy of reducing/relaxing the export and
import taxes. Procurement of imported raw materials is
disrupted so relaxation of import licenses is needed.

10. Are containers still being loaded at the port?
Last month, when the lockdown was less effective
containers were still there for the destinations not affected
by the pandemic. But problems arose with trucking to a
port because forwarders were operating reduced shifts.

11. Are containers readily available?
As of April there were reports of a shortage of containers
but few were being stuffed as importers requested delayed

280,000 furniture sector workers laid off
Abdul Sobur, Secretary General of the Indonesian
Furniture and Crafts Industry Association (HIMKI), has
reported that, in addition to the thousands of workers laidoff
in the retail, hotel, and restaurant sectors, furniture
manufacturers have indicated that they have had to lay off
some 280,000 workers.

Indonesian furniture industries are labour intensive with
around 2.1 million employed. The current crisis has meant
that furniture companies have had to make cuts in
production which has impacted labour.

The HIMKI has 3,500 member companies and there are
around 400,000 workers in the factories but as of mid-
April about 70% are laid off". One main problem is that
many export destinations are closed to shipments in others
importers have asked for delayed shipments.

Sobur has determined that large sized HIMKI member
companies may be able to retain employees for around 8
weeks but for medium and small companies they will not
be able to equal the 8 week wage payments.

Sobur urged the government to quickly disburse Direct
Cash Assistance (BLT) to employees who were laid off to
sustain their livelihood.


The corona epidemic in Indonesia has had a devastating
impact on workers as many businesses in all sectors have
shut down and furloughed or laid off their employees.

Ministry of Manpower data shows that over a million
workers in about 75,000 companies in the formal and
informal sectors have either been told to stay home or
have been laid off .

Ida Fauziyah, Minister of Manpower, urged companies to
make layoffs their last choice. She said options could be
to reduce wages or reduce working days. The media
reports her as saying “The (current) situation and
conditions are indeed challenging but this is the moment
for the government, business people and workers to work
together and find a solution to mitigate the impact of


Virus hits informal sector - Stimulus aimed at avoiding

The impact of the pandemic is already hurting small
businesses and the informal sector is particularly hard hit
and will suffer more according to the Minister of Finance,
Sri Mulyani Indrawati. He predicted that economic growth
would decline sharply in 2020 and a recession is possible.

Against this backdrop the Minister said the planned
stimulus measures might not be sufficient adding that in
January the Ministry thought the pandemic would only
impact the tourism sector. But that was incorrect so a
second stimulus package was prepared focusing on the
manufacturing sector but even here the extent of the
damage being done was underestimated.

In mid-April the President announced a Rp 405 trillion
(US$25 billion) stimulus package for virus mitigation
focusing on healthcare, social safety net, tax breaks and
debt restructuring for corporations and small businesses.


Exporters will continue with SVLK
Executive Director of Association of Indonesian Forest
Concessionaires (APHI), Purwadi Soeprihanto, said that
the association was committed to meeting the Timber
Legality Verification System (SVLK) requirements for
products to be exported adding that the SVLK has reduced
the stigma of illegal logging and weak forest management
in Indonesia.

Purwadi said he hopes that the SVLK requirements for the
small enterprises could be simplified, especially related to
business licensing requirements and assistance for
implementing SVLK certification.

Purwadi estimated that processed wood product exports
will decline this year because the five main export
destinations for Indonesian processed wood, China, the
United States, Japan, the European Union and South
Korea are badly affected by the pandemic.

5. Myanmar

 SMEs severely affected by pandemic
According to exporters, some of planned shipments of
wood products have been postponed by buyers in India,
the EU and the US but, as of mid-April, analysts report
there have been no mill closures as a result of the
pandemic but work has stopped for the Myanmar New
Year holidays.

The Myanma Timber Enterprise (MTE) postponed the
teak and other hardwood tenders sales in March and the
tender sale for April has been postponed because of the
Myanmar New Year Holiday.

Analysts say SMEs will be severely affected as they rarely
have financial resources to sustain their business through a
long period of closure. Most manufacturing, agricultural
and tourism industries in Myanmar have been severely
affected and farmers and fruit producers who rely on the
Chinese market have suffered huge losses.

The Myanmar Investment Commission (MIC) says it will
be issuing emergency loans to around 400 small
businesses that have suffered financial losses due to the
pandemic sweeping the world. The loan scheme was
announced in March and the Union of Myanmar
Federation of Chambers of Commerce and Industry
(UMFCCI) began accepting the loan
applications immediately.

In other news, the government has announced that
households in the country will not need to pay for the first
150 units of electricity in April, a measure to lessen the
impact of the pandemic affects.

Survey - Impact of pandemic on timber sector
The ITTO analyst in Myanmar conducted a survey of
timber companies in the second week of April. The
responses to the structures questionnaire are reported

1. Are mills still operating?
Myanmar started the national New Year holiday on 10
April and all factories remained open until 9 April. At that
time the Government urged ‘voluntary home stay’ and
suspended domestic travel. It is not yet clear how
Myanmar will handle the situation when the holiday
period ends on 19 April. The authorities in Yangon, the
commercial hub, have not issued any advice on what
measure will be introduced after the holidays. Most
workers have not returned to their home city because of
the travel restriction.

2. Have workers been laid off?
As of 10 April no workers had been laid off in the timber
industries. But for labour-intensive factories, such as in the
garment industry, there have been lay-offs . According to
the EU ambassador for Myanmar an estimated 25,000
workers from more than 40 factories have been laid off.
According to estimates provided by the EU half of the
700,000 garment workers in the country, most of whom
are female, are at great risk of either being suspended
without pay or losing their jobs permanently.

3. Are laid off workers receiving payments?
There have been some disputes between the government,
employers and trade unions over the need for support.
However, the immediate effects of the pandemic are not
yet clear since factories are closed because of the New
Year holidays.

4. Are companies already receiving government support?
The MIC has announced the availability of interest-free
lions for SMEs and over 400 have applied with 55
companies securing approval. The processing of loan
applications will restart after the New Year holiday.

5. Have orders been cancelled?
In the timber industry some orders have been postponed
but it is hard to get accurate data and facts. Buyers in the
EU have suspended most of garment shipments.

For the timber industries about 50-100 containers are
ready to ship but some are delayed. The value of pending
shipments is said to be between US$4 to 6 million.

6. Are mill stock levels increasing?
For the timber industries stock levels are not increasing
much since mills buy logs in small quantities every month.
For the garment factories stocks are not high since the
main supplier of raw materials (China) has reduced
shipments because of the pandemic.

7. How much time would be required to ramp up
production to pre-crisis levels?
It is estimated that the timber industries will need a
minimum 2 months to raise production to pre-crisi levels.

8. What will be the main challenges in ramping up
The financial stimulus package will be key factor after
the pandemic is controlled.

10. Are containers still being loaded at the port?
In the period up to the beginning of the holidays, port
operations were normal with some signs of congestion.

11. Are containers readily available?

Workers targeted for support by EU
According to the Centre for Economic and Social
Development (CESD), a Yangon-based think tank, around
40% of Myanmar’s factories, mainly garment factories,
have been severely disrupted by the pandemic putting at
risk the livelihood of thousand of workers, mainly women.
It is estimated that one-third of the factories closed depend
on exports to the EU.

The Myanmar media has reported that European Union
will provide 5 million euros to establish an emergency
fund to support female workers in Myanmar’s garment
sector who have lost their jobs.


The EU Ambassador to Myanmar has been reported as
saying over 25,000 workers in more than 40 factories have
been laid off as the garment industry tries to cope with the
devastating financial impact of the pandemic.

European Chamber of Commerce survey of companies
There are many European companies in Myanmar and
they were recently surveyed by the European Chamber of
Commerce in Myanmar to assess their views on the likely
economic impact of the pandemic. The report of the
survey which is available online says “According to the
respondents, more than 60% claim they are already either
significantly or moderately affected; with a forecasted loss
of revenue averaging from 30% to above 50%, small and
medium companies would be the most impacted and
automotive, FMCG, retail and manufacturing are sectors at
the frontline.

While 34% of the respondents answered that the recovery
from the impacts of COVID 19 will depend on how the
supply chain across all industries will react, another 51%
of the respondents estimate a recovery within 6 months.”


More banks approved
The Myanmar Times has reported that operating licenses
have been granted to seven Asian banks bringing to 20 the
number of foreign banks operating in the country. ). There
are 13 foreign financial institutions currently allowed to
operate in the country.

For details see:

Eucalyptus and acacia plantations planned
The Myanmar Investment Commission (MIC) has issued a
joint venture investment permit to Habras-MZZ Plantation
Myanmar Co. Ltd. for establishment of Eucalyptus and
Acacia plantataions to produce wood chips. The
plantations wll be in the Sinma Reserve Forest, Pathein
District, Ayeyarwady Region. The announcement did not
mention the capital and the plantation area.


 Shipment update
Indian ports are closed to both imports and exports.
Packed export containers cannot move as the receiving
end ports are closed in most cases. There are import
containers waiting to be discharged but as workers cannot
travel discharging is held up. Until restrictions are lifted
nothing can move. In some cases the shipping companies
are waiving demurrage charges.

Veneer prices edge down
The official Wholesale Price Index for ‘All Commodities’
(Base: 2011-12=100) for February 2020 declined to 122.2
from 122.9 from the previous month.

The index for the group 'Manufactures of Wood and of
Products of Wood and Cork' declined by 0.3% to 132.7
from 133.1 for the previous month due to lower prices for
plywood/blockboard (3%), composite panels (2%).
However, the price of veneer sheets, wooden box/crates
and some other processed products inched higher.

The press release from the Ministry of Commerce and Industry
can be found at:

Furniture imports may face restrictions
The government is considering restrictions on imports of
furniture to help protect domestic manufacturers and
reduce imports of non-essential items. In 2018-19 India's
furniture imports amounted to US$603 mil. with over half
coming from China.

The Department for Promotion of Industry and Internal
Trade has suggested to its commerce counterpart to put the
restrictions. Putting a product in restricted category means
an importer will require a license for the inbound

China supply shock as shutdown extends
The shutdown of Chinese companies over the past month
has disrupted shipments to India but many importers had
already stocked up knowing Chinese factories will close
for the Lunar holiday but they did not anticipate the virus

Indian importers say that, despite some factories in China
being back at work, others have deferred re-opening and
this has reduced the flow of imports not only of furniture
but also of panel products used by Indian manufacturers.

As a result of the disrupted supply chain of products from
China retailers turned to domestic manufacturers only to
find that they too cannot work due to the Indian lockdown.

Plantation teak
As a result of the current pandemic business transactions
have come to a standstill. Even if trade was ongoing the
staggering currency fluctuations with Indian Rupee around
Rs76 to a US dollar would challenge importers. Until
currencies stabilise no importer would dare conduct

Brazil and Ghana continue to offering relatively high girth
logs but Indian importers are waiting for exchange rates to
stabilise as exporter prices are in US dollars. It has been
reported that Colombia has offered sawn teak sizes
(inches) 3x3,3x4 and 4x4.for US$440 CNF, Indian ports.

C&F rates at Indian ports from various other sources
continue within the same range as given earlier.

Locally sawn hardwood prices
Prices reported at the end of March are shown below. As
all trade is under lockdown no contracts are in play but
analysts suggest prices will have to rise if the rupee/dollar
exchange rate continues at the current level.

Myanmar teak prices
As all work has stopped in India there is no domestic
demand for Myanmar teak at present.

Sawn hardwood prices
Prices reported at the end of March are shown for
reference. There are no sales at present.

Markets are closed due to Lock out. Factories are closed
and the workers have returned to their home states.


 Vietnamese industry - growth disrupted
In the recent decade, based on 2 key competitive
advantages, including cheap labour (average monthly
wage of US$300) and an abundant wood supply (3 million
ha. of fast growing acacia plantation and 1 million ha. of
rubberwood., Vietnam’s wood and wood product
(W&WP) exports have consistently grown at over 10%
annually. This growth was maintained during the first two
and half months of 2020 when W&WP exports earned
US$2.047 billion, a year on year growth of 18%.

With the COVID-19 pandemic spreading in the US
(market for nearly 50% of W&WP shipped from
Vietnam), Japan (13%), China (12%), EU (10%), South
Korea (10%) the well-developed supply-demand chain has
been disrupted.

Survey - Impact of pandemic on timber sector
A quick survey conducted recently by VIFOREST and
local associations including HAWA, BIFA, FPA Binh
Dinh Associations with 124 enterprises shows the severe
impacts of the pandemic on Vietnamese wood industry.

Huge financial losses by enterprises
Responding to the questionnaire circulated by VIFOREST
and its associates, 76% of enterprises state that they are
facing pandemic damage and the initial loss is estimated at
VND3,066 trillion (around US$130 million); 24% of the
surveyed enterprises say that they have not identified

Most enterprises have reduced production, some have
to closed their factories

Over half (51%) of the respondents say that they had to
reduce production; 35% of enterprises assume that their
business can be maintained for some while, but suspension
may not be avoided in coming days; only 7% of
enterprises remain operational.

The situation, however, may turn worst at any time
because the entire industry live on the orders left from
2019, and no new ones have made in 2020.

The army of unemployed/unwaged workers is massive
The quick survey shows that about 45% of the labour
force employed in the wood processing industries have
lost their jobs due to the pandemic. Out of the 124
interviewed enterprises, 105 respondents informed that
before the virus outbreak they employed 47,506 workers
but they have now laid off 21,410.

The burden of loan repayments, social insurance
payments, taxes and other costs is acute

83 respondents complained that they are unable to pay
VND 178.6 billion of social insurance for their employees
(VND2.15 billion each enterprise on average);

50 enterprises responded that they cannot manage to cover
VND174.6 billion of VAT (equivalent to VND3.49 billion
per enterprise);

The income tax 64 enterprises have to pay is amounted to
VND212.9 billion (VND3.1 billion each) is beyond their
financial capacity at this crisis time; 61 enterprises tend
unable to handle VND44 billion of land rental fees (in
average, VND0.7 billion each enterprise has to pay);

The accumulated outstanding loans that 96 enterprises have
to settle amounts to VND 6,207 trillion (VND64.7 billion per

Emergency supports/rescue interventions by the
Government needed

The emergency support/rescue intervention sort by the
surveyed enterprises can be grouped á follows:

Financial intervention to support workers who lose their

78 enterprises asked the Government to provide financial
support for the minimum wage (VND3.6 million per worker
per month) for workers who temporarily lost their job.

The Government is considering paying half of this minimum
wage, while the employers can get access to low/non interest
loan to cover the rest.

Immunity/postponement of taxes and fees applicable for

31% of surveyed enterprises have requested the Government to
exempt 100% of taxes, including corporate income tax, VAT,
as well as social insurance and land rental fees; 31% have
proposed to reduce 50% of these taxes and fees; 15% have
requested to reduce current payment level to 40% or less.

Extending the term for outstanding loan repayment:
30% of the surveyed enterprises tend to favour commercial
banks extending the term for loan repayment for an additional
6 month period; 29% prefer a 9 month extension; 13% ask for a
12 month extended; 6% for an extra 5 month period.

Reduction of loan interest rates applied by currently
commercial banks:

52% of respondents proposed lowering annual loan interest
rates down to 2-5%; 11% wish to have 2% rate; 5% can afford
the rate varying 5.1-7.0%.

Other emergency requests:
Struggling to survive and the hoping to overcome the pandemic
in the near future, apart from the above-mentioned requests,
enterprises also indicate specific considerations to be taken by
relevant authorities at central and local levels, namely:

Management boards responsible for running
industrial parks to offer one year exemption of
maintenance payment;
Leaders of Binh Duong Province to issue “red
book” (land use certificate) so that enterprises
operating in provincial industrial parks could
leave necessary collateral for bank loans;
Extension the term for outstanding loan
repayment without lowering the enterprise credit
Temporarily stop charging VAT on imported
Reduce the charge for goods uploading/unloading
at ports;
Temporary support livelihood of those workers
who are not eligible to get unemployment
insurance, and, thereby, enable suffering
enterprises to keep workers for post-pandemic
restoration of production;
Provision of preferential commercial loans
needed for enterprises to maintain and improve
production capacity and get readiness for
business development while the pandemic gets
Support to maintain the limit of short-term loans
to survive until the time when production and
business get re-normalised;
Stop collecting trade-union fee until the end of
the pandemic;
No regular inspections on enterprise taxation and
other performances during the remained months
of 2020;
Allow enterprises to negotiate with their
employees to fix non-employed wage/suspended
production subsidies;

This survey of 124 wood enterprises illustrates that the
COVID-19 pandemic is having a devastating impact on
the timber industry sector of Vietnam. Even though the
situation is changing fast and the worst picture be yet to
come the export-biased wood industry of Vietnam is
already facing a crisis.

The package of emergency support proposed by the
government to adjust fiscal policies, social insurances,
credit support, tax and fee exemption or reduction etc. is
insufficient and inadequate to protect the industry from the
impact of this pandemic. In all likelihood Vietnam not
see growth of W&WP exports this year.

Source: Data/information collected from 124 enterprises through
a quick survey and analysed by VIFOREST in association with
HAWA, BIFA, FPA Binh Dinh and the Forest Trends team.


 Survey - Impact of pandemic on timber sector

1. Are logging operations still working?
Yes, no significant change

2. Are mills/factories still working?
Depends on the segment. Pulp and paper 100%, solid
wood industry depends on the State or municipality
decisions. Most states have no significant restrictions but
some municipalites have stopped industrial operations.
Very had to estimate a percentage but is small.

3. Have workers been laid off?
The government has proposed legal provisions to mitigate
the impact. Options are anticipated, holidays, leave,
reduction of working hours with reduced salaries,
suspension of contracts.

Generally, so far, few companies have laid off workers but
the virus problem is just starting and will get worse in the
next few weeks.

4. Are laid off workers receiving payment?
Government assistance includes a small amount of money
over the next 3 months for unemployed persons and a
contribution to complement part of the salaries in case of
suspension or suspension of contract.

5. Are timber companies receiving government support?
Government support to companies includes a package of
credit lines. In addition payment of taxes were postponed.

6. Are companies still fulfilling orders placed pre-crisis?
Some domestic and international orders have been
cancelled. Force Majeure has been invoked. This is
expected to increase.

7. Are domestic logistics for the timber industry

There are no logistical problems

8. What will be the main challenges in ramping up
The problem is demand, there will be no problem in
ramping up production at the end of the crisis.

9. Please estimate how long it would take for production
to get back to pre-Covid Crisis levels?
Production will begin immediately the crisis is over.

10. What is your estimate (in US$) of national total lost
sales in Q1 2020 compared to Q1 2019?
For 202 it is estimated that a reduction of between 40-
50%. Most reduction expected in the next 6-9 months but
effect will be felt into 2021.

11. Comments, suggestions
All will depend on the recovery of the economies of the
importer countries. In the case of Brazil the domestic
market is quite important and the local economy is
expected to be affected in 2020 and into 2021. Brazil’s
exports of pulp and paper areis not expected to be
significantly affected. Markets for solid wood products are
highly concentrated in China USA and some EU member

Exports of solid wood products to China (and other Asian
countries) will also decline but will be less affected. On
the other hand, exports to the USA and EU will decline
sharply in 2020 and into 2021.

Impact of and response to pandemic
The economic impact of the corona virus outbreak and the
measures adopted to try and slow its spread are having a
huge impact. Brazilian manufacturing activity in March
declined at the fastest rate in three years and the real sank
to a record low of 5.27 to the US dollar.

The impact on SMEs, especially those in the informal
sector, is the most critical because the
lockdown restrictions and containment measures mean
most workers in this sector are now without an income.

Paulo Guedes, The Minister of the Economy said the
government will spend about 98 billion reais (US$18
billion) to help the over 50 million informal workers
affected by nationwide lockdowns, part of an overall 800
billion reais government support package.

Other enterprises will benefit from a variety of non-tax
measures relating to employment and public health. The
government also introduced measures relating to tax

Tax and international trade facilitation measures

There have been other decisions on measures for the
protection of the economy and maintenance of jobs and
incomes and the forestry and timber sectors will be offered
support. Some of the decision announced by the Ministry
of Economy for manufacturers include:

Zero IOF rates on credit operations for 90 days
(Zero IOF is a macroeconomic concept
describing conditions with a very low nominal
interest rate,)

Extension of the deadline for filling individual
income tax return to June 30 (usually it is end of

Postponement of the payment of federal taxes
(PIS, COFINS and Employer's Social Security
Contribution) to August-October that would be
paid between April and May.

In addition, the Business Coalition for Trade Facilitation
and Barriers has suggested additional measures would be

Adjustment of the Reintegra (Special Regime for
Reintegrating Tax Values for Exporting
Companies) rate to 3%
Extension of the deadline of the Drawback
concession acts due in 2020
Swiftness in the issuance and extension of import
licenses for 90 days
Postponement of deadlines for payment of
customs charges and fees
Total exemption of the physical presentation of
receipts for cargo clearance

Exports disrupted
There are great uncertainties in the how domestic and
international demand will evolve in the short-term and in
the longer term if the pandemic is not quickly controlled.

With the closure of borders many companies have export
containers stopped at the ports. Sindusmobil (Union of
Construction and Furniture Industries of São Bento do Su)
has reported that in the municipality of São Bento do Sul,
the major furniture manufacturing and export cluster, the
situation is uncertain as companies cannot plan as they do
not know when the situation will get back to normal.

In Arapongas municipality, which ranks third among the
largest furniture exporters in the country, the situation is
no different. Sima (Arapongas Furniture Industries Union)
reports that there are companies that produce primarily for
export and have lost this business.

For Sindmóveis (Union of Furniture Industries of Bento
Gonçalves), the supply and demand shocks caused by the
corona virus will significantly impact furniture exports and
the entire Brazilian industry. The extent of and likely
outcome of this crisis is still too early to assess.

Furniture industry back to work in Bento Gonçalves
On a brighter note the Bento Gonçalves industries
resumed operations on 6 April following Municipal
Decree authorisation. Sindmóveis provided guidance to
manufacturing companies in the furniture sector on how to
adopt other practices in order to prevent contagion in the
workplace, recommending working-from-home where
possible and adoption of flexible work policyies such as
phased work schedules.

Sindmóveis emphasised that manufacturing companies
have avoided layoffs, opting for alternatives approaches
but the recent moves are expected to limit unemployment
from now but a decline in production is inevitable and job
losses very possible.


 Forestry paralysed by lockdown
A nationwide lockdown in Peru was announced on 16
March with some of the region’s most stringent
containment measures. Peru introduced gender-based
restrictions. Women were permitted out on Tuesdays,
Thursdays and Saturdays. Men permitted out Mondays,
Wednesdays and Fridays. Everyone had to stay home on

All activities in the forestry and timber sectors have been
stopped until further notice and recreational activities,
college classes, universities and institutes, cinemas,
theaters, as well as productive activities have been closed
except for priority or strategic activities such as food
production, health services and banking.

The International Monetary Fund forecast that this
decision will drive the country into a recession with
growth set to contract 4.5% this year.

The tough lockdown has slowed the rate of spread of
infection and in the number of people requiring
hospitalisation which is being interpreted as the country is
on the right track and can plan for a gradual reopening of
the economy next month. President Martin Vizcarra
suggested some restrictions could be eased in May despite
the rise in infected people identified in a mass testing.

Vizcarra announced a huge stimulus package including
cash handouts and cheap business loans one of the largest
packages yet to be announced in South America.

2019 export performance
The Exporters Association (ADEX) has reported that 2019
wood product exports earned US$124.9 million FOB. This
is almost the same as export earnings in 2018. Semimanufactured
product exports accounted for around 65%
of wood product exports followed by sawnwood (22%)
where there was an 18% increase year on year. Exports of
builders’ woodwork dropped over 30% and exports of
veneer, plywood as well as furniture and parts were lower
than in 2018.

Of the US$124.9 million exported in 2019 China
continued to be the main market, accounting for a 40%
share of export values but this was down 4% year on year.

Mexico was the second largest export markets accounting
for 11% of exports. Here export earnings were up almost
5%. The other major markets were France and the US
which each accounted for around 9% of export earnings in

Sawnwood exports in 2019 earned US$27.4 million
significantly up on 2018. The main destination for
sawnwood was the Dominican Republic (33% of all
sawnwod exports). Sawnwood exports to the Dominican
Republic increased over 25% in 2019 from a year earlier.
The other markets were Mexico (25%) and China (24%).

Loreto region achieves highest forest zoning

Peru has the challenge of zoning 125 million ha.
corresponding to 97% of its territory and progress has
been made with the approval of the first stage of forest
zoning in Loreto as a result of cooperation between the
Regional Government of Loreto and the National Forest
and Wildlife Service (Serfor). Loreto is now the region
with the largest area of forest zoned at 15.9 million

With an area of 36.9 million hectares, Loreto has the
largest área of tropical rain forest and with the approval of
its forest zoning has taken a big step to credible
sustainable management of its natural resources.






Source:ITTO'  Tropical Timber Market Report

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