4.
INDONESIA
Wood product exports to Europe can
be increased
The Indonesian Ambassador for Belgium, Luxembourg
and the European Union Andri Hadi said there are
opportunities to increase wood product exports to the EU
as the EU plans to implement a Deforestation-Free Supply
Chain (DFSC) policy. Indonesia has a wood legality
certificate which has now been reframed into a wood
sustainability certificate and with more vigorous
promotion Indonesian products can capture a greaetr share
of the EU market he said.
Indonesia's export performance for wood products has
been continuing to show improvement since the FLEGT
VPA was established with the EU and products such as
wood parquet, furniture, paper and plywood exports have
expanded.
One such product that should be promoted is wood fuel
(chips and pellets) as many EU countries want to expand
biofuel consumption.
Janauary export earning encouraging
Chairman of the Communication Forum of Indonesian
Forestry Society (FKMPI), Indroyono Soesilo, revealed
that the performance of the forestry sector was positive in
early 2022.
Total exports of wood products in January 2022 amounted
to US$1.23 billion, up 28% compared to January 2021. In
January 2022 exports of wood products to the EU and the
UK recorded an increase of 30%.
SME flooring exports to India
The Ministry of Trade, via the Surabaya Export Center
programme facilitated the export of wood flooring
products to India from an SME.
Director General of National Export Development at the
Ministry of Trade, Didi Sumedi, said this was a good
achievement as the SME has only been in operation for
three years.
Data from Statistics Indonesia shows that in 2021
Indonesia's exports of wood flooring products (HS
441871-79) amounted to US$117.86 million, an increase
of 39% compared to the previous year. Over the past five
years the trend of Indonesian wood flooring exports to the
world has shown an average decline of 4% annually.
See:https://www.jawapos.com/ekonomi/02/03/2022/kemendagfasilitasi-pengusaha-umkm-ekspor-lantai-kayu-ke-india/
Encouraging furniture and lifestyle products trade
The Ministry of Trade, through the Directorate General of
National Export Development, launched the Aku Siap
Expor (ASE 2) programme to encourage production and
trade in furniture and lifestyle products.
According to the Director General of National Export
Development, Didi Sumedi, the first ASE was welcomed
by exporters which encouraged the Ministry to launch the
second programme, ASE 2. The scope of this programme
is expanded and directed at home decoration products,
furniture and lifestyle products. The new programme will
provide assistance to 50 businesses.
The one year programme will offer workshops, simulation
practices, assignments, business meetings, private
mentoring, local market orientation missions and
participation in domestic and foreign exhibitions.
See:
https://voi.id/ekonomi/138531/dukung-produk-furniturindonesia-mendunia-kemendag-luncurkan-program-ase-2-0
New Forest’s Tropical Asia Forest Fund 2 (TAFF2)
The Asian Development Bank (ADB), in a press release,
announced the signing of a US$15 million equity
investment in the New Forest’s Tropical Asia Forest Fund
2 (TAFF2) L.P. to support sustainable forestry practices in
Southeast Asia and reduce logging in natural tropical
forests by helping sustainably managed plantation
companies to scale up their operations. The investment
comprises US$5 million from ADB’s ordinary capital
resources and US$10 million from the Australian Climate
Finance Partnership (ACFP) trust fund.
Opportunities for support will be sought in Cambodia,
Indonesia, the Lao People’s Democratic Republic,
Malaysia, Thailand, and Vietnam.
The press release says “Investment in sustainable forestry
is limited in developing countries due to market, political
and natural resource risks,” according to the ADB Private
Sector Investment Funds and Special Initiatives Director,
Janette Hall.
She continued, “ADB’s investment will enable best
practice forestry companies that currently lack access to
growth capital to engage in commercial, sustainable
forestry.
See:
https://www.adb.org/news/adb-invests-tropical-asia-forestfund-2-promote-sustainable-forestry-enhance-biodiversity
5.
MYANMAR
Teak exports
contine – even to countries with
sanctions
In a media release Forest Trends (FT) has said it recently
found that timber exports from Myanmar worth more than
US$190 million were reported and much of this went to
countries whose governments have applied trade sanctions
potentially exposing companies importing from Myanmar
to penalties.
Forest Trends reports timber exports valued at US$37
million were shipped to countries with sanctions and
US$154 million shipped to China, India, Thailand and
other countries which have not sanctioned MTE.
FT notes “most markets have decreased their imports of
timber from Myanmar since the coup, but others,
including countries with sanctions have increased imports
relative to 2020.
In the US, where almost all imports were in the form of
sawn teak for the luxury yacht market, the number of
companies importing from Myanmar dropped by twothirds
to only 5 importers, yet total trade still increased
slightly.
Five EU Member States, Austria, Belgium, France, the
Netherlands and Poland also showed substantial increases
in imports.
China, which has not imposed sanctions on Myanmar, also
increased imports by 35%. All findings are likely an
underestimate as not all countries have reported trade for
the entirety of 2021”.
See:
https://www.forest-trends.org/pressroom/despite-sanctionson-myanmar-the-us-uk-and-eu-imported-more-than-36-millionin-timber-since-the-coup-exposing-traders-to-risk-ofprosecution/
and
https://thediplomat.com/2022/03/myanmar-timber-exportscontinue-despite-western-sanctions-report/
Can teak purchased before sanctions be exported?
According to Myanmar exporters wishing to ship to the
EU they have to process logs for which payment was
made to MTE before 21 April 2021 and for the US, before
21 June 2021. Exporters have indicated that buyers in the
US and EU are very strict on this condition. Because of
this condition the price for teak logs held by private
stockists has increased by about 30%.
Myanmar exporters also expressed their understanding
that the products from the logs for which the payment had
been settled before the respective dates are exempted from
the sanctions. Such assumptions were shared with buyers
who have been accordingly advised by their legal
consultants.
See:
https://www.forest-trends.org/pressroom/despite-sanctionson-myanmar-the-us-uk-and-eu-imported-more-than-36-millionin-timber-since-the-coup-exposing-traders-to-risk-ofprosecution/)
Value of trade falls
The value of Myanmar trade has declined by over US$765
million over the past five months of the current 2021-2022
fiscal year when compared to the same period of the
previous year according to the figures released by the
Ministry of Commerce.
From 1 October 2021 to 18 February 2022 the total trade
value was US$11.958 billion while in the same period in
the last fiscal it was US$12.724 billion. Myanmar exports
agricultural products, animal products, marine products,
mineral products, forest products, finished industrial goods
(CMP) and other goods. When it comes to imports the
country mainly imports capital goods, raw materials for
businesses and consumer products.
See:
https://elevenmyanmar.com/news/myanmars-trade-valuefalls-over-765m-in-five-months-compared-to-same-period-ofprevious-fiscal
)
Baht and kyat for direct payment at border
Central Bank (CB) of Myanmar issued notification dated 3
March on the use of Thai baht and Myanmar kyat for
direct payment at Myanmar-Thai border. The Central
Bank stated that this is an effort to facilitate bilateral trade
and to promote the use of the local currency.
According to the objectives of Asean financial integration
initiative the Central Bank of Myanmar is allowed the use
of Thai baht and Myanmar kyat for direct payment at the
Myanmar-Thai border.
In related news, the Bank issued a notification in
December 2021 on the use of the Chinese yuan and
Myanmar kyat for direct payment at Myanmar-China
border.
See:
https://elevenmyanmar.com/news/central-bank-ofmyanmarthe-use-of-thai-baht-and-myanmar-kyat-for-directpayment-at-myanmar-thai)
Myanmar considers digital currency
A spokesman for the State Administration Council says
the government plans to establish a digital currency to
support domestic payments and boost the economy within
the year and is assessing how to move forward.
See:
https://www.mizzima.com/article/myanmar-junta-lookingintroduce-digital-currency
6. INDIA
Life beginning to
return to normal
India’s daily coronavirus infections rose by less than
10,000 per day in early March, a level last seen in late
December 2021 before the rapid spread of the Omicron
variant, according to the Union Health Ministry.
Nearly two years after India went into lockdown to slow
the spread of COVID-19 students are heading back to
school across the vast country, a sign of normal life
resuming as infection rates fall. Similar signs of normal
are everywhere, roads and trains are packed as people
travel to work.
See:
https://www.aljazeera.com/gallery/2022/3/2/photos-indianormal-life-two-years-covid-lockdowns
Cost of imports set to rise
India’s economy lost momentum in the last quarter of
2021 with growth slowing from previous two quarters and
the prospects are bleak as it is likely that energy costs and
the cost of other imports will rise because of the global
reaction to Russia’s invasion of Ukraine.
Gross domestic product rose 5.4% year-on-year in the
October-December period and below the 8.5% growth in
July-September and 20.3% April-June quarters.
Growing demand for imported particleboard
The Indian trade magazine Plyreporter has said currently
there is a huge demand for woodbased particleboard in the
Indian market due to firm demand from furniture makers.
To satisfy production requirements manufacturers have
turned to imports especially as container freight rates have
eased making imports from regional producers viable.
Despite having more than 60 particleboard manufacturing
plants in the country quality furniture makers in India are
still keen to utilse imported particleboard.
Green affordable housing
Recently, an outreach programme to create awareness for
green affordable housing was launched. In 2017 the Indian
Prime Minister and the Presidents of the European Council
and European Commission adopted a joint declaration on
a ‘Partnership for Smart and Sustainable
Urbanisation‘. This partnership supports smart and
sustainable cities, promotes investments in sustainable
urbanisation, climate action and disaster risk reduction.
See:
https://ec.europa.eu/regional_policy/en/policy/cooperation/international/india/
7.
VIETNAM
Trade highlights
In 2021 Vietnam’s wood and wood products (W&WP)
exports to Russia totaled at US$7.3 million (mostly
wooden furniture) and imports were valued at US$55
million (mainly birch and pine sawnwood, veneer and
plywood). Vietnam is in need of Russian birch veneer as
the face for plywood for furniture manufacturing. As a top
wood supplier of the world the Russia – Ukraine conflicts
threatens to disrupt the supply of wood raw materials for
Vietnamese wood industries.
Exports of W&WPs to the Japanese market in February
2022 were valued at US$109 million, up 31% compared to
February 2021. In the first two months of 2022 W&WP
exports to Japan reached US$262 million, up 22% over the
same period in 2021.
Exports of living and dining-room furniture in February
2022 are estimated at US$230 million, up 13% compared
to February 2021. In the first 2 months of 2022 the exports
of these two wooden commodities are estimated at
US$552 million, showing an increase of 8.8% over the
same period in 2021.
Imports of W&WPs in February 2022 reached US$240
million, down 4% in value compared to January 2022 but
compared to February 2021 W&WP imports increased by
25% in value.
In February 2022 exports of rattan, bamboo and other
NTFPs reached US$70 million, down 35% compared to
January 2022 but up 38% compared to February 2021.
Vietnam's import of tali wood in February 2022 has been
reported at 47,900 cu.m, worth US$20.3 million, down 4%
in volume and 4% in value compared to January 2022.
However, compared to February 2021 imports of tali
increased by 14.5% in volume and 19% in value.
Sanctions on Russia to adversely impact timber
industries
The Russia’s invasion of Ukraine along with the sanctions
imposed on Russia by the United States the EU and others
will have a big impact on the global wood processing and
export industries.
Assessing the risks and identifying solutions relating to
mechanisms and policies to help wood enterprises reduce
the negative the impact from the conflict took centre stage
at an online seminar held in early March by the Vietnam
Timber and Forest Product Association (VIETFOREST)
in co-ordination with the General Department of Forestry
and the Ministry of Agriculture and Rural Development
(MARD).
Vo Quang Ha, General Director of Tan Vinh Cuu Joint
Stock Company, said,”Birch supplies from Russia must be
balanced but we can still have it whether we depend on
Chinese sources or buy it directly. He noted prices have
started to rise.
Phan Thi Thu Trang, Head of An Lac Wood Import-
Export Department, said, "Wood materials from Ukraine
in the past year have sharply increased but the war in
Ukraine will result in price increases”.
According to Vu Hai Bang, Chairman of the Board of
Directors of Woodsland Company, the shortage of wood
supply from Russia may create new demands for
alternative types of imports from Eastern European
countries. It is possible that Vietnamese wood sourced
from planted forests can become one of the alternative
sources of timber therefore it can be viewed as necessary
to devise policies aimed at supporting businesses in
ensuring this supply.
"Fortunately, Vietnamese businesses that have locally
grown wood and relatively stable prices over the years
have not had to pay for shipping. Therefore, the MARD
should have support policies to help wood processing
enterprises maintain the domestic wood supply,"
emphasised Bang.
Bui Chinh Nghia, Deputy Head of the General Department
of Forestry said that it is impossible to predict how long
the conflict will last and how serious the ultimate impact
of it will be. Due to this it can be viewed as necessary to
adopt timely mechanisms and policies aimed at helping
timber businesses reduce the negative impacts thereby
contributing to the wood industry's sustainable
development in the future.
According to Nghia, it remains essential to have a specific
assessment and be increasingly proactive to get the best
adaptations for the local wood and forest product
processing industry.
The General Department of Forestry and the MARD is
ready to review all opinions then produce a joint report
featuring specific proposals and recommendations
regarding adaptation to the emerging supply issues.
See:https://english.vov.vn/en/economy/russia-ukraine-conflictadversely-impacts-vietnamese-wood-industry-post929346.vov
Rising exports of wood chips to Japan
Exports of W&WPs from Vietnam to Japan in February
2022 reached US$109 million, up 31% compared to
January 2021.
W&WP exports to Japan surged due to the increased
export of woodchips which is also the main wood product
exported from Vietnam to Japan with a 35% share of the
total exports to Japan.
In addition to woodchips Vietnam exports wooden
furniture to Japan. The export of wooden furniture to the
Japanese market dropped in January 2022 as a result of the
pandemic.
Japan has become one of the world's largest renewable
energy markets and Vietnam’s exports of wood pellets to
Japan are expected to rise significantly in the coming
years.
Imports of tali and alternative such as ironwood
Vietnam's imports of tali and alternatives in February were
estimated at 47,900 cu.m worth US$20.3 million, down
4% in volume and 4% in value compared to January.
The wide variation in prices US$255 – 750 per cu.m
is
explained by market preference. The price of tropical hard
wood from Laos can be 3 - 4 times higher than of African
timbers. Vietnamese hardwood are even more expensive
than that of Laos having a much sought after beautiful
texture.
Trees in the tropical forests of Vietnam grow slowly than
in Africa and even in mainly because of site conditions
(rocky site, severe climate conditions with long dry season
- quite cool winter and heavy rainy season).
8. BRAZIL
SMEs guarantee legality and
traceability
Strong domestic demand for home renovations associated
with the price increase in civil construction inputs such as
steel and iron caused a rise in prices which carried over to
the timber market. According to the Timber Industry
Union of Northern Mato Grosso State (Sindusmad) prices
for some timbers doubled. Itauba (Mezilaurus itauba) for
example increased from R$2,500 per cu.m to R$5,000 per
cu.m.
In 2021 the 44 municipalities in the Northern Mato Grosso
state which leads the Brazilian timber production from
natural forests through sustainable forest management
produced 35,400 logs with a volume of approximately 4.2
million cubic metres.
A large part of the expanded domestic market can only be
accessed by producers who guarantee the entire product
traceability process but this is difficult for SMEs. A study
carried out by the Getulio Vargas Foundation pointed out
that the difficulties in having a sound tracking system for
SMEs could be addressed through a consortium of
companies operating a “joint supply system” to meet the
demands of buyers.
In related news, there are government programmes to
strengthen management in SMEs. One example is the
School Furniture Regionalisation Programme (Programa
de Regionalização de Mobiliário Escolar - Promove)
implemented by the state of Amazonas which provides for
the purchase of products from cooperatives and furniture
associations that use raw material from companies with
sustainable forest management plans.
Forest concession bidding process explained
The Brazilian Forest Service (SFB), the Brazilian
Development Bank (BNDES) and the Investment
Partnerships Program (Programa de Parcerias de
Investimentos - PPI) will, in the first half of March 2022
hold a round of meetings with potential investors for the
Concession of the National Forests (Floresta Nacional –
FLONA) of the South region: FLONA de Irati, FLONA de
Chapecó and Tres Barras’ FLONA de Três Barras.
The meeting with potential investors aimed to clarify
doubts about the concessions and the bidding process
related to the public notice for concession in the National
Forests of the FLONAs. The forest concessions initiative
aims to ensure the management of planted forests and the
restoration and conservation of FLONAs through publicprivate
partnerships.
The FLONAs are located in the municipalities of Chapeco,
Guatambu and Tres Barras in the state of Santa Catarina
and in the municipalities of Fernandes Pinheiro and
Teixeira Soares in the state of Parana. The new forest
concession model allows the commercial use of planted
forests and their recovery through silviculture with native
timber species or forest restoration with the original
vegetation of the Atlantic Forest.
Furniture exports a record in 2021
Brazilian furniture exports grew 51% in 2021 reaching
US$1 billion compared to the US$679 million in 2020.
Furniture exports from Rio Grande do Sul, one of the
largest furniture manufacturing clusters in Brazil,
increased by 64% year on year totalling almost US$293
million according to Furniture Industry Association of Rio
Grande do Sul (Movergs). This was the best export
performance since 1997.
The ten largest buyers of furniture produced in Rio Grande
do Sul state were the United States, Chile, Peru, Uruguay,
the United Kingdom, Paraguay, Colombia, Bolivia,
Panama and Puerto Rico, representing 81% of total
exports with one third of the total export going to Chile
and the USA.
One of the opportunities for furniture exporting companies
wanting to assess new markets are international fairs. The
joint FIMMA (International Fair of Suppliers of the Wood
and Furniture Production Chain) and Brazil Movelsul
(furniture fair in Latin America) is scheduled for mid-
March 2022 in Bento Gonçalves.
FIMMA is focused on exhibitors of machinery, production
inputs, services and accessories and Brazil Movelsul
brings together furniture, design and decoration
companies.
Acre - record trade balance
The state of Acre, one of the main producer states of
tropical timber in the Amazon, started 2022 with a positive
trade balance. According to the Ministry of Economy in
January Acre exported US$4.2 million and imported
US$77,000. This amount represents a new record for its
foreign trade for the month of January. Timber and wood
products accounted for 54% of exports along with brazil
nuts (27%).
9. PERU
Expand timber sector for job
creation
The wood processing industry has the potential to generate
around 400,00 formal and decentralised jobs which would
benefit regional development, tax collection and fiscal
control according to the president of the Association of
Exporters (ADEX), Erik Fischer Llanos in a meeting with
the executive director of the National Forest and Wildlife
Service (SERFOR), Levin Rojas Meléndez. Fischer said
wood processing requires a lot of labour and even low
skilled workers can be trained.
Regarding foreign trade, he noted that shipments of wood
products generate at least 302 jobs for every million new
sol exported. Only traditional agriculture (635) and
clothing stores (329) surpass it in that ranking.
The forestry sector, he added, promotes the formalisation
of the entire production chain as the companies have all
their workers on the payroll with social benefits. In
addition workers bank their payments. Expanding the
forestry and wood processing sectors offers a great
opportunity for the country.
To capture the opportunities Fischer considered it essential
that the new processes for forest concessions be
implemented and concession should be granted only to
companies with adequate technical, managerial and
financial resources. Fischer noted that under the previous
conession arrangement around 7.5 million hectares was
allocated but only around 2 million were operational.
He added, the presence of the private timber industries in
the forest ensures forest sustainability sticking to
management plans, by not allowing a change in land use
and guards against illegal felling and mining.
Forest zoning must value forests
A regulation on forest zoning will provide for establishing
basic guidelines that allow granting rights for the use of
these resources and will ensure their responsible use
according to Manager of Services and Extractive
Industries in the Association of Exporters (ADEX), Lucía
Rodríguez. However, she added, currently there are
elements in the regulation that, far from valuing the
enormous potential of the Amazon, threaten its
sustainability.
This is the case of the categorisation of Category 1 Forests
(permanent production forests from which raw material for
the wood industry is extracted). The Methodological
Guide for Forest Zoning, prepared by Serfor indicates that,
to be considered category 1, the average potential timber
volume must be greater than or equal to 90 cu.m per
hectare which is unrealistic and would affect the
productivity of formal companies in the sector.
Faced with this situation organisations such as the
National Forestry Confederation of Peru (Conafor), the
Association of the Forestry Sector of Loreto (Aseforel)
and the Association of Forestry and Wildlife Regents of
Loreto (Areffal) issued a statement rejecting the first stage
of the Forest Zoning in the Loreto region.
Rodríguez added “Technical criteria were not used to
differentiate the types of forests in the area but everything
was standardised and most of the areas have been declared
as fragile or reserve areas. This violates the ancestral
rights of indigenous peoples, who have the right to prior
consultation, in addition to not allowing any type of use of
forest products”.
UK to promote agroforestry in native communities
A project "Mitigation of climate change with inclusive
sustainable agroforestry businesses that contributes to the
development of "Good Living" of the Indigenous Peoples
in the Peruvian Amazon" is financed by the UK PACT and
implemented by the Peruvian NGO Association for
Research and Integral Development (AIDER).
Activities began in January this year and will last for
twelve months with the objective of strengthening the
capacities of small agroforestry producers in nine native
communities of the Shipibo-Conibo and Cacataibo ethnic
groups, in Ucayali and the Ese'Eja in Madre de Dios.
The Chamber of Commerce of the Indigenous Peoples of
Peru (CCPIP) and the company Bosques Amazónicos
SAC (BAM) are associated with this project. CCPIP will
design commercial proposals for native communities that
promote ‘Good Living’ so agricultural and forestry
products can contribute to the sustainable development of
native communities. BAM will prepare investment plans
for native communities that incorporate carbon
sequestration in their agroforestry plots.
