1. CENTRAL AND WEST AFRICA

 Wagner group logging in CAR
For several months, beginning last year, reports suggest the Russian Wagner group is involved in logging and export of timber from the CAR. News is circulating in the sector that a significant volume (around 465,000 cu.m) of mainly Sapelli was exported via Douala to importers in France and Denmark. This has not been verified. It appears trading is being undertaken by a company in the CAR called Bois Red.

See: https://www.earthsight.org.uk/news/timber-linked-to-wagner-group

and
https://alleyesonwagner.org/2022/07/26/come-follow-the-redwood-trees-tracking-wagners-forestry-business-in-car/

Export prices remain stable in most markets
Operators report that markets, while active, are generally quiet. Operators in Gabon and Congo are facing unsettled weather. Despite the expected arrival of the dry season heavy rain and thunderstorms persist daily. This abnormal weather pattern is causing delays in forest operations and transport.

In terms of transportation, the railways in Congo, Gabon, and Cameroon are said to be operating normally with no recent reports of derailments. However, the timber industry is facing challenges due to substantial delays in log transportation and this, along with high transport road fees, is adding to the financial strain on companies.

Export prices have remained stable in most markets over the past months and operators wish for an opportunity to raise prices to offset rising production costs. However, there has been downward pressure on prices from buyers in the Middle East and some Europe countries. Demand for padouk in Belgium is flat with little opportunity for shippers looking for better prices.

Exportersin Gabon have again raised the issue of delays in securing CITES certificates which can now extend to as long as a week whereas it was 3-4 days recently.

The port of Antwerp is reportedly grappling with congestion related to conventional timber shipments as importers are delaying trucking. These delays are often attributed to the absence of EUTR documents and the necessary CITES certificate.

Shipping timber break-bulk to Europe has become increasingly challenging according to shippers as only two shipping lines, Grimaldi and Bocs, serve Europe offer this service. Producers say if these lines are unable to fill ships with cargo twice a month at northern ports, such as Douala and Bata, they opt to cancel calls to Gabon.

Training on legality and traceability
ATIBT, through its previous activities in the Republic of Congo and the "Appui au Secteur Privé" (ASP-Congo) project, is involved in the implementation of the APV FLEGT process.

A training plan for legality and traceability support was prepared and two training workshops were organised in Ouesso (northern Congo) and in Pointe-Noire (southern Congo).

The aim was to build the capacity of private-sector forestry companies in timber legality and traceability with a view to enhancing their involvement in the implementation of the FLEGT VPA process in the Republic of Congo. Twelve forestry companies benefited from this training

See: https://www.atibt.org/en/news/13337/deployment-of-vpa-congos-legality-verification-system-lvs

Through the eyes of industry
The latest GTI report lists the challenges identified by the private sector inRepublic of Congo and Gabon.

See https://www.itto-ggsc.org/list_52/439.html

2. GHANA

 IMF approves US$3 bil. facility to stabilise the economy
The International Monetary Fund (IMF) has approved Ghana’s request seeking a US$3 billion Balance of Payment Support of which US$600 million has already been transmitted to the government.

The IMF issued a press statement saying “As you know Ghana has been facing a severe economic and financial crisis with a debt burden assessed as unsustainable. More specifically, a combination of pre-existing vulnerability and external shocks as the COVID-19 pandemic, Russia’s war in Ukraine have resulted in acute financing pressures, depreciating cedi, declining international reserves, slowing economic activities and high inflation.

In response to these difficult circumstances, the Ghanaian authorities have taken decisive steps. Just to give you a few examples, the 2023 budget and the associated revenue reforms were very important first steps towards putting public finances back on the sustainable track.

To restore that sustainability, the Government has launched a comprehensive debt restructuring; and the Bank of Ghana has also taken decisive steps to control inflation and these efforts are already paying off. These are all essential ingredients to address the current challenges and to boost Ghana’s prospects going forward”.

Local analysts expressed concern, saying businesses should be ready for higher taxes as conditions attached to the IMF support are demanding. Speaking at the 7th Ghana CEOs Summit and Expo in Accra, the Country Managing Partner of Deloitte Ghana, Daniel Owusu, urged government to review the current tax regime to lessen the burden on the private sector as they are struggling to survive. Other speakers also called on government to consider to creating a conducive environment for businesses by reviewing burdensome taxes.

The Public Utilities Regulatory Commission (PURC) introduced an 18% increase in tariffs for electricity and natural gas in the second quarter of 2023. A PURC press release attributed the utility increase to the depreciation of the local currency, high inflation and the cost of natural gas as the major factors behind the increase. The PURC has also announced tariff increases for water.

See: https://www.imf.org/en/News/Articles/2023/05/24/tr051823-transcript-of-ghana-press-briefing

and
https://thebftonline.com/2023/05/25/review-oppressive-taxes-govt-urged/

Teak accounts for most sawnwood exports to Asia
In the first two months of 2023 Ghana’s air-dried sawnwood accounted for 54% (24,589 cu.m) of the total wood exports of 45,312 cu.m, to be the leading export product. These exports earned Euro9.90 million which was 21% more than in the same period in 2022. In contrast, exports of kiln-dried sawnwood declined 13% (Euro3.52 million in January-February of 2023 compared to Euro3.72 million for January-February of 2022).

 
Air-dried sawnwood, together with mouldings and plywood were the only three out of thirteen products that registered significant year-on-year growth of 14%, 25% and 175% respectively in 2023 when compared to 2022.

India and Vietnam were ranked the first and second in terms of Ghana’s exports of air-dried sawnwood. India absorbed 22,100 cu.m of the product valued at Eur8.35 million with Vietnam 1,072 cu.m which earned Eur0.83 million to become a major market for Ghana’s air-dried sawnwood.

Between January and April 2023 Asian markets absorbed most of the teak exported from Ghana (27,890 cu.m) compared to the previous year (26,554cu.m). This was followed by the Middle East where there was a with 1.4% increase in 2023, however, demand in Europe, regional markets and the US weakened compared to the same period in 2022.

TIDD data shows that the Asian market accounted for close to 62% of all wood product exports in 2023 as against 60% recorded in 2022.

Five species namely teak (90%), papao (3%), deny (2%), dahoma (1%) and kako/ekki (1%) accounted for the bulk (97%) of the air-dried sawnwood exports in the first two months of 2023.

3. MALAYSIA

 GDP grows 5.6% in first quarter
The Malaysian economy grew 5.6% in the first quarter of 2023 driven by further expansion of household spending, continued private investment, improving labour market conditions and higher tourism. During the first quarter private consumption increased by almost 6%, private investment (by 5%) and public investment by (6%), however, public consumption declined.

See: https://business.inquirer.net/400579/malaysias-economy-grows-5-6-in-q1-above-forecast

New Chairman for MTC
The Malaysian Timber Council (MTC) has just provided a press release on the appointment of its new chairman, Tuan Haji Zainal Abidin Haji Abdullah.

The release says “Having started his career as a Forest Officer in 1992 at the Sarawak Forest Department, Tuan Haji Zainal was seconded to the Sarawak Forestry Corporation Sdn Bhd (SFC) as its Area Manager in 2003. He held several positions at SFC including Security & Asset Protection Manager, Revenue Manager and Regional Manager before becoming its Deputy General Manager in June 2018”.

See: http://mtc.com.my/images/media/1441/Press_Release_on_MTC-s_New_Chairman_18.4.2023.pdf

A virtual gallery for Malaysian wood products
The Malaysian Timber Council (MTC) will create ‘Timber Reality’ a virtual showroom with galleries for Malaysian-made timber and furniture products to attract buyers around the world. Timber Reality will connect consumers worldwide, create awareness of Malaysian wood products and build confidence in Malaysian manufacturers.

Apart from encouraging the timber industry to embrace digitalisation ‘Timber Reality’ will be a promotional tool for a new marketing frontier for Malaysian wood products.

See: https://www.mfc.my/post/mtc-timber-reality-virtual-programme

Log tracking system upgraded
The Sarawak Forest Department (FD) has improved the Sarawak Log Tracking and Forest Revenue System (REVLOG) by adding a new module known as the ‘Forest Licensee Portal’ that allows timber licensees to submit applications online related.

This, says the FD, benefits to the Department and licensees through enhancing productivity, operational efficiency and data sharing. REVLOG is an online application system to manage forest and monitor logging activities from issuance of licenses until post-logging activities.

The technology is also used to monitor the movement of logs along the log supply chain and for the collection of forest tax revenue.

See: https://dayakdaily.com/forest-depts-online-system-enhanced-to-allow-applications-related-to-log-supply-chain-activities/

Engineered wood products
The Sarawak Timber Industry Development Corporation (STIDC) organised a workshop to discuss development of initiatives to drive utilisation of engineered wood products (EWP) in Sarawak. A focus group discussed regulatory requirements of the Sarawak Buildings Ordinance, 1994, availability of raw material, R&D capacity and available expertise.

See: https://www.theborneopost.com/2023/05/17/stidc-swak-committed-to-promote-engineered-wood-for-environmental-sustainability/

Through the eyes of industry
The latest GTI report lists the challenges identified by the private sector in Malaysia.

See: https://www.itto-ggsc.org/list_52/439.html

4.  INDONESIA

 Lightwood-Hub creates new opportunities
The Association of Indonesian Forest Concession Holders (APHI) welcomed the new ‘Lightwood-Hub’ to promote lightwood for building construction. The chairman of APHI, Indroyono Soesilo, stated that, currently, the world is entering the era of a Green Economy including the building of ‘Green Buildings’ which use a lot of wood products in the construction process.

To further encourage the use of light wood Indroyono stressed the need for synergy between three parties; forestry businesses as providers of wood raw materials, architects as designers of buildings with light wood materials and construction engineers who understand how to use wood.

Indroyono also called on APHI members to be more courageous in exploring opportunities to use lightwood.

See: https://forestinsights.id/2023/05/12/aphi-sambut-kehadiran-lightwoodhub-buka-potensi-pasar-kayu-rimba-campuran/

First Quarter 2023 furniture exports
Furniture exports earned US$501 million in the first quarter of 2023. The Director General of Agro Industries in the Ministry of Industry, Putu Juli Ardika, said the expansion of furniture exports was reflected in the Industrial Confidence Index (IKI) which reached a level of 51.38 in April 2023 signaling expansion.

The Ministry of Industry has implemented several policies to support the growth of the furniture industry including facilitating the ‘Raw Material Logistics Center’ in an effort to improve the supply of raw materials for the furniture industry, the establishment of the ‘Furniture and Wood Processing Polytechnic’ in Kendal to train workers for the furniture industry, the machine/equipment restructuring programme for the wood processing industry and empowerment of SMEs through SMEs centers.

See: https://akurat.co/furnitur

and
https://www.viva.co.id/siaran-pers/1599690-kemenperin-upayakan-industri-furnitur-terus-berekspansi?page=all

In related news, the Minister for Cooperatives and Small and Medium Enterprises, Teten Masduki, has urged furniture and craft manufacturers to seek new alternative markets in response to changes in traditional markets.

He noted that over the next few years the sector has to target alternative markets, not just America and Europe. Echoing this sentiment, Agro-Industry Director General, Putu Juli Ardika, said Indonesian furniture products are frequently exported to Europe and the United States, which are currently experiencing economic stagnation.

He reported that an export task force has been formed and it is currently investigating new markets for furniture one of which would be member countries of ASEAN, Middle Eastern countries and non ASEAN Asian countries.

See: http://bisnisbali.com/industri-furnitur-lokal-didorong-bidik-pasar-ekspor-alternatif/

Interzum 2023 exhibition
Indonesian wood products recorded potential transactions worth US$3.1 million at the May Interzum 2023 exhibition. Didi Sumedi, Director General of National Export Development in the Ministry of Trade said that Indonesian wood products are appreciated by European consumers because of the quality and style.

The Acting Director of Manufacturing Export Development, Ganef Judawati, added that the exhibition was a prestigious international event that attracted around 70,000 visitors and exhibitors and became a business opportunity for around 1,800 exhibitors from Europe, Asia and America.

In 2022, exports of Indonesian wood products to Germany were recorded at US$95 million, down 4% compared to the previous year. Meanwhile, exports of Indonesian wood products to the European Union in 2022 were recorded at US$389 million, down 3% in 2022 compared to 2021.

See: https://swa.co.id/swa/trends/economic-issues/produk-kayu-olahan-ri-mampu-bukukan-transaksi-rp-46-miliar-di-pasar-eropa

Strategies for sustainable forest management
The Indonesian government presented three strategies for sustainable forest management on the first day of the 18th session of the United Nations Forum on Forests (UNFF18) at the United Nations (UN) Headquarters.

The Director General of Sustainable Forest Management Ministry Environment and Forestry (KLHK), Agus Justianto, mentioned Indonesia's three contributions to realising the United Nations Strategic Plan for Sustainable Forest Management. Implementation of Indonesia's FOLU Net Sink 2030 agenda, implementation of multi-business forestry and the active involvement of communities in forest management through the Social Forestry programme.

On the multi-business forestry scheme utilisation is no longer focused only on wood but also on optimising the potential of non-timber forest products, ecotourism and environmental services.

See: https://www.antaranews.com/berita/3529572/indonesia-paparkan-strategi-pengelolaan-hutan-lestari-dalam-sidang-pbb

and
https://www.msn.com/id-id/berita/nasional/klhk-beberkan-3-kontribusi-indonesia-wujudkan-rencana-pbb-untuk-pengelolaan-hutan/ar-AA1aYtKu

President seeks forestry partnership with Brazil
On the sidelines of the G7 Summit President Joko Widodo sought a strengthened partnership between Indonesia and Brazil on forestry. Forestry related issues are a priority for both countries as Indonesia and Brazil are among the countries with the largest area of tropical forests.

The two leaders came to an agreement to convince developed countries to realise their commitments to provide funds for tackling issues related to climate change.

See: https://en.antaranews.com/news/282333/president-seeks-to-intensify-forestry-partnership-with-brazil

Indonesia and EU complete 14th IEU-CEPA negotiations
Indonesia and the European Union (EU) completed the 14th round of the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) negotiation in Brussels, from May 8–12, 2023. According to a statement published the two parties managed to achieve significant progress on the development of the agreement in the negotiation round.

The Director of Bilateral Negotiations at the Indonesian Ministry of Trade, Johni Martha, has been reprted as saying with this progress we are optimistic that we can achieve the determined targets in this negotiation process.

18 substantive primary issues were negotiated in the 14th round including trade in goods, rules of origin, trade in services, trade security, investment, government procurement, transparency and regulatory practice, dispute resolution, institutional provisions as well as intellectual property rights.

Other issues discussed were state-owned enterprises, economic cooperation and capacity building, investment court system, subsidies, anti-fraud policies, energy and raw materials, small and medium enterprises as well as trade technical barriers.

See: https://en.tempo.co/read/1725637/indonesia-eu-complete-14th-ieu-cepa-negotiations-round

Strengthening economic fundamentals
Indonesia continues to strengthen economic fundamentals in support of economic growth according to the Minister of Finance, Sri Mulyani Indrawati, In the post pandemic era Indonesia is focusing on how to strengthen economic fundamentals.

The Minister explained that, even during the pandemic, Indonesia continued highly ambitious reforms, including the tax harmonisation law, alignment of central and regional fiscal policies, financial sector reform and a job creation law. Financial sector reforms included the integration and adoption of financial technology (fintech), strengthening efforts for small and medium enterprises (SMEs) and consumer data protection.

See: https://en.antaranews.com/news/281208/indonesia-continues-to-reform-to-boost-economic-fundamentals-minister

Through the eyes of industry
The latest GTI report lists the challenges identified by the private sector in Indonesia.

https://www.itto-ggsc.org/list_52/439.html

5. MYANMAR

    -

6. INDIA

 High interest rates and weak international demand could dampen prospects for exports
India's economy is projected to expand by almost 6% in 2023 driven mostly by domestic demand according to the latest UN World Economic Situation and Prospects report. However, high interest rates and weakening international demand could dampen prospects for exports and investment.

See: https://www.livemint.com/economy/indias-economy-backed-by-domestic-demand-but-high-cost-of-funds-hinders-investments-un-report-11684340454975.html

Wood products price indices
The annual rate of inflation based on all India Wholesale Price Index (WPI) in April was 0.92% compared to 1.34% recorded in March 2023. The decline in the rate of inflation in April 2023 was mainly due to a fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical products, rubber and plastic products and paper.

Out of the 22 NIC two-digit groups for manufactured products, the price index for 14 groups increased while for 8 groups there was a decline. Some of the groups that recorded a drop in prices were chemicals; basic metals; food products; fabricated metal products (except machinery and equipment) leather and related products; paper and paper products.

See: https://eaindustry.nic.in/pdf_files/cmonthly.pdf

EU and India Trade and Technology Council (TTC)
A press release from the EC has announced the first meeting of the new trade council which is seen key deepen the strategic partnership on trade and technology. The TTC is a coordination platform to address key trade, technology and security challenges.

The ministerial meeting reviewed the work of three workings groups:
 Strategic technologies, digital governance and digital connectivity
 Green and clean energy technologies
 Trade, investment and resilient value chains

The EU and India enjoy a robust trading relationship. The EU is India's 2nd largest trading partner accounting for Eur120 billion worth of trade in goods in 2022 or 10.8% of total Indian trade. India is the EU's 10th largest trading partner accounting for 2% of EU total trade in goods. Trade in services between the EU and India reached Eur40 billion in 2021.

See: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2728

2,000 rupee notes to be removed from circulation
The Reserve Bank of India has announced it will take out of circulation its highest denomination currency note, the ,2000-rupee note. The 2,000 rupee notes were introduced immediately after the demonetisation exercise. This move will affect small businesses in many sectors and could be a major challenge for these businesses.

See: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12506&Mode=0

Heatwave in parts of north and central India
Only towards the end of May did the heat wave in parts of northwest India ease. With temperatures rising to 45 Celsius the Meteorological Department (IMD) issued heatwave warnings over Delhi-NCR and adjoining areas. However, the IMD indicated that the worst of the hot weather had passed by 24 May with the arrival of light rain and cloudy weather.

See: https://indianexpress.com/article/india/india-heatwave-weather-update-may-22-8621988/

JICA loan for forestry
On behalf of Japan, JICA signed a loan agreement with the Government of India to provide loans of up to a total of Yen 426,814 million for four projects, one of which is for Forest and Biodiversity Conservation for Climate Change Response in West Bengal.

The object of this forestry project is to mitigate and adapt to climate change, conserve, and restore ecosystems by ecosystem-based climate change measures, biodiversity conservation and restoration, livelihood improvement activities and institutional strengthening thereby contributing to sustainable socio-economic development in West Bengal. The Executing Agency will be the Department of Forests, Government of West Bengal.

See: https://www.jica.go.jp/english/news/press/2022/20230329_33.html

7. VIETNAM

 Highlights of Wood & Wood Product (W&WP) Trade
According to the General Department of Customs in April 2023 W&WP exports were valued at US$1.09 billion, down 4.3% compared to March 2023 and down 32% year-on-year.

In particular WP exports stood at US$777 million, up 0.5% compared to March 2023 but down 33% compared to April 2022.

In the first 4 months of 2023 W&WP exports amounted to US$3.9 billion, down 31% over the same period in 2022. The WP exports alone accounted for US$2.6 billion, down 38% over the same period in 2022.

W&WP exports to the Japanese market in April 2023 were valued at US$126.9 million, down 17% compared to April 2022. In the first 4 months of 2023 W&WP exports to Japan reached US$556.3 million, up 1.8% over the same period in 2022.

In April 2023 Vietnam’s exports of kitchen furniture were valued at US$82 million, down 40% compared to April 2022. In the first 4 months of 2023 exports of kitchen furniture reached US$295 million, down 34% year-on-year.

W&WP imports into Vietnam in April 2023 stood at US$169.1 million, down 13% compared to March 2023 and down 39% compared to April 2022.

Vietnam's W&WP exports to South Korea in April 2023 were valued at US$66 million, down 39% compared to April 2022. Over the first 4 months of 2023 W&WP exports to South Korea totalled US$273.5 million, year-on-year down 23%.

Vietnam’s wood pellet exports in April 2023 earned US$60 million, down 27% compared to April 2022. In the first 4 months of 2023 wood pellet exports generated US$260 million, year-on-year rise of 10%.

Wood raw material imported into Vietnam from Southeast Asia in April 2023 stood at 71,000 cu.m, worth US$21.0 million, down 17% in volume and down 14% in value compared to March 2023.

The total amount imported from this source into Vietnam in the first 4 months of 2023 stood at 248,580 cu.m valued at US$73.5million, down 18% in volume and 30% in value compared to the same period in 2022.

Vietnam’s W&WP exports to Japan
The main products exported to Japan in the first 3 months of 2023 were wood chips (US$428.5 million, year-on-year up 8.8%), followed by wood pellets (US$98.8 million, up 42% over the same period in 2022).

Vietnam is emerging as a top supplier of wood chips and pellets to Japan. The pace of growth in wood pellet exports from Vietnam to Japan, is declining. In contrast, Japan’s imports of wood pellets from the US have been rising. Japan consumes around 30-35% of the woodchips produced in Vietnam.

After chips and pellets is wooden furniture. In the first 3 months of 2023 wooden furniture shipped to Japan from Vietnam was valued at US$98.8 million, down 26% year-on-year.

Wooden chair frames were the top export item at US$25.8 million, down 15%, followed by living and dining room furniture, US$25 million, down 39%, bedroom furniture US$22.8 million, down 11%.

Vietnam’s imports of tali decreasing
With a supply of 89,000 cu.m (worth US$36.1 million) Cameroon accounted for a 73% share of total imports of tali in the first 3 months of 2023.

According the General Department of Customs, Vietnam's imports of tali from all sources in April 2023 totalled 32,400 cu.m worth US$13.6 million, down 12% in volume and 13% in value compared to March 2023. Compared to April 2022 imports decreased by 24% in volume and 23% in value.

In the first 4 months of 2023, tali wood imports reached 158,500 cu.m worth US$65.3 million a year-on-year drop of 8% in volume and 7% in value.

The average price of tali imported into Vietnam in the first 3 months of 2023 reached US$409/cu.m, a slight increase over the same period in 2022. In particular, the price for tali imported from Congo increased by 10% over the same period in 2022 to US$481/cu.m.

Vietnam’s imports of wood raw material from Southeast Asia dropping sharply
In the first quarter of 2023 imports of wood raw material from Southeast Asia to Vietnam amounted to 95,080 cu.m, worth US$18.55 million, down 14% in volume and down 28% in value over the same period in 2022.

Supply by country
In the first quarter of 2023 Vietnam imported mainly particleboard, fibreboard and sawnwood from Thailand. Imports of particleboard and fibreboard decreased significantly over the same period in 2022 with particleboard imports falling 21% in volume and 44% in value. Fiberboard imports were down by 41% in volume and 50% in value. Sawnwood imports soared by 200% in volume and 100% in value in the same period.

In the first quarter of 2023 imports of wood raw material from Laos to Vietnam amounted to 49,800 cu.m worth US$24,475 million, down 12% in volume and 24% in value over the same period in 2022.

Logs and sawnwood were the two main wood categories imported from Laos in the first quarter of 2023. While sawnwood imports from Laos decreased by 15% in volume and 25% in value compared to the same period in 2022, log imports increased by 24% in volume and 13% in value.

The volume of wood raw material imported from Malaysia and Indonesia to Vietnam in the first quarter of 2023 increased sharply compared to the same period in 2022, up 89% and 67%, respectively.

The wood products imported from the Malaysia were sawnwood, logs and particleboard while from Indonesia the increased imports relied on flooring, particleboard and sawnwood.

Vietnamese timber exporters facing a sharp decline in orders
Vietnamese wood and wooden furniture enterprises have been facing many difficulties as export orders have dropped 50-60% since the beginning of this year, pushing firms to cut off at least half of their production capacities. Data from the General Department of Customs showed that the export turnover of wood and wooden products reached US$3.9 billion in the first four months, down 30.6% year-on-year. The export of wooden goods saw a yearly decline of 38% to $2.6 billion.

At the same time, the import value of wood and wooden products also decreased significantly to US$634 million, down 33.6% over the same period last year.

During the four months, Vietnamese exports of these goods to major markets all decreased sharply such as the US (US$2.02 billion, 38%); Japan US($556 million, 1.5%); South Korea (US$274 million, 22%) and China (US$481 million, 13%).

Analysts and businesses have said that the decrease in wood and wooden goods exports was foreseeable. They attribute the decline to inflation surges in some countries, which were also major importers of Vietnam's wood and wooden goods, resulting in sluggish demand for these products. For example, the US imported US$1.24 billion worth of timber and wooden products from Vietnam in the first three months, a year-on-year drop of 42%.

In the context of inflation and the banking crisis, US banks have tightened credit, making importers unable to finance import goods in large quantities. The demand for US wooden furniture imports has plummeted, analysts said.

According to wood exporters, their export orders from the US market have decreased between 50% and 55% depending on the type of wood products. Meanwhile, orders from the EU - another key export market, also dropped 60%.

The Chairman of the Woodworking Association Nguyễn Liêm said “amid the current difficult context the provincial wood enterprises had slashed their production capacities by 60%.

The current global economic situation is very unpredictable," said Liêm "All market signals are not bright and it is hard for wood enterprises to draw up their business plans.”

Liêm also predicted that when the market situation improved and the inventory decreased, foreign customers would continue to order but not sooner than early 2024.

Around the beginning of 2024, the market would be less difficult, and businesses would have export orders again. Still, only small ones, he said, forecasting that the market would likely recover at the end of 2024. However, the recovery growth would depend on the world's economic and political situation.

Despite a sharp slump in orders, trade experts said the US remained a key export outlet for Vietnam’s wood industry. Therefore, businesses needed to maintain the US market by updating information and converting production according to the market's consumption trends.

In addition, management agencies needed to support businesses to bring Vietnamese wooden goods into large distribution systems such as Walmart, Costco and Amazon.

This was an effective way for the firms to develop their brands, avoiding relying too much on intermediaries, trade experts said.

In the current context, the Ministry of Industry and Trade and the Ministry of Foreign Affairs should continue to help businesses find out information about the market situation of products, consumer demand and tastes, Liêm suggested.

They should also support the enterprises in updating the national mechanisms and policies of importing countries on quality, design, legality and sustainability of imported wood products and providing them with information on requirements as well as changes in the trade policy of key markets such as the US, the EU and Northeast Asia, he said. The chairman added that early warnings from the ministries to help the firms minimize commercial disputes should also be included.

The chairman of the Vietnam Timber and Forest Products Association Đỗ Xuân Lập proposed to the Ministry of Foreign Affairs and the Vietnamese embassies in foreign countries to better promote international furniture fairs in Việt Nam.

It was recommended that embassies should also provide information and support Vietnamese businesses to participate in international furniture fairs, Lập said. He also petitioned the embassies to assist wood enterprises in opening companies, representative offices and stores in potential export markets.

See:
https://vietnamnews.vn/economy/1541027/timber-exporters-face-a-sharp-decline-in-orders.html

EU regulations to combat deforestation and possible impact on Vietnam
The implementation of new EU regulations aimed at combating deforestation could have a significant impact on Vietnam’s forestry and agricultural exports to Europe. However, the implications can be viewed from both positive and negative perspectives.

See: https://www.vietnam-briefing.com/news/eu-deforestation-regulations-vietnam.html/

8. BRAZIL

 Accounting for carbon in wood products
A study by the Brazilian Agricultural Research Corporation (Embrapa Florestas) has started to measure carbon accumulation in sawnwood, wood-based panels, paper as well as wood product residues. The first survey was carried out in 2020 using 2016 data as a reference. For the final estimate of the carbon stock of wood products fuelwood and charcoal are not included as, according to the Intergovernmental Panel on Climate Change (IPCC) methodology, these categories generate immediate carbon emissions.

According to the IPCC methodology estimates of carbon in wood products can be made through 3 different approaches (stock-change, atmospheric flow and production) and it is up to each country to decide which is the most appropriate to prepare its emissions inventory. The approach used by Brazil for estimating the contribution of timber forest products is that of atmospheric flow which favors large timber producing and exporting countries.

See: https://www.poder360.com.br/meio-ambiente/brasil-passa-a-contabilizar-carbono-de-produtos-florestais/

In other news, Embrapa has made available a range of technologies for the development, innovation and sustainability of strategic production chains for the local and regional economy in the state of Acre, one of the main tropical timber producing states in the Amazon Region.

The adoption of digital technologies has made forest management more productive and sustainable. The Digital Logging Model (Modeflora) made available 15 years ago, is used in 100% of the management plans in the state of Acre and by forestry companies in other states (Amapá, Roraima, Rondônia, Amazonas and Pará) in the Amazon region.

The technology provides highly precise information on the managed area, facilitates the planning, execution and monitoring of field operations and reduces production costs by a third.

Impact studies show that in 2021 alone the management of 40,000 hectares of forests using Modeflora generated savings of approximately R$11 million.

Modeflora, which integrates the Global Positioning System (GPS), Geographic Information System (GIS) and Remote Sensing (RS) tools, among other technologies, has enhanced scientific innovations such as the Lidar (Light Detection and Ranging) laser profiling system, which allows 3D mapping of the forest and state-of-the-art drones. These studies involve the training of artificial intelligence algorithms to carry out 100% automated forest inventories and identify forest species of economic value.

See: https://www.embrapa.br/busca-de-noticias/-/noticia/80662895/uso-de-tecnologias-agropecuarias-e-manejo-florestal-de-precisao-promovem-o-desenvolvimento-sustentavel-no-acre

Export update
In April 2023 Brazilian exports of wood-based products (except pulp and paper) declined 29% in value compared to April 2022, from US$470.2 million to US$336.1 million.

Pine sawnwood exports declined 23% in value between April 2022 (US$77.3 million) and April 2023 (US$59.5 million). In volume, exports declined 6% over the same period, from 281,200 cu.m to 264,000 cu.m.

Tropical sawnwood exports declined 29% in volume, from 40,900 cu.m in April 2022 to 29,000 cu.m in April 2023. In value, exports declined 17% to US$ 8.7 million from US$15.5 million over the same period.

Pine plywood exports faced a 41% decrease in value in April 2023 compared to April 2022, from US$100.3 million to US$59.4 million. In volume, exports declined 23% over the same period, from 234,200 cu.m to 179,900 cu.m.

As for tropical plywood, exports declined in volume by 64% and in value by 64%, from 8,400 cu.m and US$4.7 million in April 2022 to 3,000 cu.m and US$1.7 million in April 2023.

As for wooden furniture, the exported value declined from US$52.8 million in April 2022 to US$47.2 million in April 2023, an 11% fall in the total exports of the product during the period.

Growth in the furniture sector in Southern Brazil
The furniture sector in the state of Rio Grande do Sul, one of the main furniture clusters in Southern Brazil, went through a difficult period between 2019 and first half of 2020, followed by atypical growth until the end of 2021 but began to stabilise in 2022.

According to the State Department of Finance, the turnover of 2,409 furniture manufacturers in Rio Grande do Sul was above R$2.7 billion in the first three months of 2023, a nominal increase of 7.4% compared to the same period of the previous year. The Federal Government's Comex Stat portal indicates that, from January to March 2023, furniture exports from Rio Grande do Sul totalled almost US$52 million, a 21% retraction compared to the same period in 2022.

The five main importers were the United States, Uruguay, Peru, Chile and the United Kingdom.

According to the Association of Furniture Industries of the State of Rio Grande do Sul, the inconsistent international sales were related to short-term economic factors in the purchasing countries. The Association believes this scenario could improve during this year, especially with the international fairs, Fimma (International Fair of Suppliers of the Wood and Furniture Production Chain) and Movelsul (Furniture Fair of Latin America) to be held in August bringing together importers from the main target markets.

See: https://emobile.com.br/site/industria/setor-moveleiro-gaucho-no-1o-trimestre-de-2023/

‘WoodFlow’ technology streamlines wood export
‘WoodFlow’, a Brazilian wood export startup has launched two new features on its sales platform; the first is an application that allows quality inspection of exported products and the second is a digital panel with statistical data on volumes, prices, shipments and other information.

The company anticipates WoodFlow's new features will bring more quality and confidence in the process of wood exports from Brazil. The first new function is an application that will make it possible to inspect the quality of the exported product.

For example, if a company in Brazil is exporting pine sawnwood to the United States it will make it possible to take photos of the lots that will be shipped, certifying the quality, such as checking the measurements, density, humidity and other data, depending on each product.

The second new feature is a virtual panel with statistical data of the shipments made through the platform, for example, data such as shipment volume, average price paid, shipping locations and other information about the negotiations.

By recognising that technology can improve and speed up the export process, WoodFlow has introduced a new way of doing business that ensures traceability of documents and processes as it concentrates all the data in one location.

See: https://www.portaldoagronegocio.com.br/florestal/mercado-florestal/noticias/tecnologia-woodflow-agiliza-negocios-de-exportacao-de-madeira

9. PERU

 Export earnings declined in early 2023
Acccording to the Management of Services and Extractive Industries Division of the Exporters Association (ADEX) exports of primary wood products in the first two months of this year totalled US$16.8 million, down on the US$22.4 million exported in the same period in 2022.

Exports to France were significant in early 2023 and accounted for 21% of all wood product exports. China was the second largest buyer, accounting for 18% of exports but exports to China were down 37% compared to the same period in 2022. Other markets of note were Mexico and the Dominican Republic with a participation of 14% and 12% respectively.

Exports of semi-manufactured wood products earned US$7.8 million during the first two months of the year, a decrease of 42% compared to the same period in 2022, the main market was France. The second most important market for semi-manufactured products was Belgium with a 16% share of exports along with China in third place with a 15% share.

During the first two months of the year the sawnwood subsector exported US$6.3 million, growing 1.3% over the previous year. The three main destinations were the Dominican Republic, China and Mexico.

In the furniture and parts subsector exports amounted to US$0.49 million, up around 6% year on year. The main destination for these products was the US with a 77% share, up 9% year on year followed by Trinidad and Tobago (10% share) and Ecuador (5% share).

Minam opposes changes to Forestry Law
The Ministry of the Environment (Minam) expressed its opposition to the request raised in Congress to consider signing into law legislation that some modifies articles of the Forestry and Wildlife Law (Law 29763). From the perspective of Minam this could accelerate deforestation in the Peruvian Amazon.

Minam urged the Congress to reject the proposed reconsideration so that the regulatory proposal is maintained as it is, adding that Minam considers "developing activities such as agriculture on forest land is neither economically competitive nor sustainable over time”.

See: https://agraria.pe/noticias/minam-se-opone-a-insistencia-del-congreso-en-aprobar-cambios-31917

Casacor Peru 2023, SERFOR presents Amazon hardwoods
The largest architecture, interior design and landscaping exhibition in the Americas, Casacor Peru 2023, which runs from May 23 to July 2, showcase a National Forestry and Wildlife Service (SERFOR) ‘sustainable wooden terrace project built on an area of 120 sq.m.

The project demonstrates the wide diversity of Amazonian timber species from legal, sustainable and certified sources. Timbers such as ishpingo, mashonaste, ana caspi and shihuahuaco are included in the engineered products.

The wooden terrace is divided into two zones. On the first is an exhibit of a selection of 40 species of wood provided by SERFOR. On the second is a lounge area where tiered seating allows visitors to relax, admire the project and become familiar with the forestry sector.

The exhibition seeks to promote the use of wood for interior architecture and construction. The importance of making responsible purchases of wood products from legal and well-managed sources is emphasised.