Business Trends Abroad

Dec/Jan Issue

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Indonesia– The Secretary General of the Ministry of Environment and Forestry, Bambang Hendroyono, has indicated that from the beginning of July 2020 the performance of the forestry sector has been improving. The timber sector plays an important role in the economy as it is a major employer in upstream and downstream sectors in Indonesia.

Bambang said the government’s initiatives and support for the sector helped alleviate the worst effects of the COVID control measures on output and support employment. The government has reported that growth in the agriculture, forestry and fisheries sectors recorded by Statistics Indonesia grew around 13 percent in second quarter of this year.

The increased performance of the forestry sector included production logs from natural and plantation forests in the first and second quarters of 2021 amounting to 25.6 cubic meters, an increase of about 6 percent compared to the first and second quarters of 2020.

Processed wood production in the first and second quarters of 2021 totalled 23,285,433 cubic meters, an increase of almost 2.5 percent compared to the same period in 2020.

The production of Non-Timber Forest Products in the first and second quarters was 192,269 tonnes, an increase of 48 percent compared to the first and second quarters of 2020. The export value in the first and second quarters was around US$7.5 billion, an increase of 40 percent compared to the same period in 2020.

United Kingdom– Seven months into 2021 (the most recent data available) and volumes of timber and panels imported by the United Kingdom (UK) were nearly 2 million m³ higher than the first seven months of 2020, according to statistics released by the Timber Trade Federation (TTF).

This growth has largely been driven by softwood imports, up by 43.6 percent compared to the same period in 2020. Most product categories have seen an increase, with hardwood imports also up by 26 percent.

The statistics also indicate that supply and demand imbalances are continuing to influence timber prices, with softwood, hardwood and plywood all increasing in value over the last few months.

Evidence is beginning to suggest that the construction market is being severely constrained by the supply of skilled labor and materials.

Recent Construction Products Association (CPA) statistics show reduced construction output as the UK headed into autumn, largely due to the effects of heavy goods vehicle (HGV) shortages, fuel shortages and port congestion.

While this can hardly be seen as positive, reduced demand will soften the significant price rises TTF has seen in the structural timber sector over the past three quarters.

These constraints on construction output are set to continue as they head into 2022, and this will likely mean demand for timber beginning to return to more normal levels.

With post-lockdown spending habits changing, and as government financial support is largely withdrawn, some shifts in the private housing and repair, maintenance and improvement (RM&I) markets have been forecasted.

Central/West Africa– A serious issue is developing in West Africa, with sawnwood exports from sawmills in the Congo and Gabon being severely curtailed due to a lack of empty shipping containers. It is less of an issue in Cameroon, which imports considerable quantities of goods, thereby freeing up containers for exports.

Most sawnwood leaving the three countries is going to China and the Philippines. The good news is that buyers, who are short of timber, are not cancelling orders.

Nevertheless, the container shortage could last a couple more months, according to shipping lines, with containers held up in China and the U.S.

Prices are holding steady except in the Netherlands, where Azobe prices are rising due to competition among exporters and buyers. An Italian company is reportedly becoming involved in the Dutch market, with the effect of pushing prices up.

Vietnam– The U.S. has decided to not take trade action on Vietnamese timber following a 12-month investigation into alleged illegal harvesting and trade.

The two countries have come to an agreement that provides a satisfactory resolution of the matter, subject to investigation and that no trade action is warranted at this time, according to a statement released by the United States Trade Representative.

“I commend Vietnam for its commitment to address our concerns regarding the importation and use of timber that is illegally harvested or traded,” said USTR ambassador Katherine Tai.

With this agreement, Vietnam will provide a model – both for the Indo-Pacific region and globally – for comprehensive enforcement against illegal timber, she added.

The agreement contains multiple commitments by Vietnam on issues related to illegal timber, including commitments to improve its Timber Legality Assurance System and to keep confiscated timber out of the commercial supply chain.

Vietnam will also need to verify the legality of domestically harvested timber regardless of export destination and work with high-risk source countries to improve customs enforcement at the border.

“Illegal timber in the supply chain damages the global environment and the natural resources on which we all depend, and is unfair to U.S. workers and businesses who avoid such timber,” Tai said.

The USTR investigation into Vietnam’s timber exports was initiated in October 2020.

The U.S. is the biggest market for Vietnamese wood products, representing an estimated $7.4 billion last year, about half of the country’s total.

Thuringia, Germany– This fall, ThüringenForst recorded an accumulation of damaged wood due to bark beetle damage amounting to 3,061,400 m³ (comparison period 2020: 2,847,100 m³). This means that the three million solid cubic meters of damaged wood limit has been exceeded earlier this year than in 2020. 

Regional focal points of the infestation are still southern Thuringia, with the main forest offices of Sonneberg and Schönbrunn, as well as eastern Thuringia, with the main forest offices of Schleiz, Neuhaus and Saalfeld-Rudolstadt.

China– By the end of August of this year (the most current collected data available) China had released 273 Standards on wood products including 140 national Standards and 133 industrial Standards on timber for construction products and sawnwood for structural use.

The Standard system is basically the same as that of the international and developed countries. China has adopted 23 ISO international Standards and foreign advanced Standards which cover 22 percent of the total national timber Standards.

The Standards such as the Names of Main Timbers in China (GB/T 16734), Names of Main Imported Timbers in China (GB/T 18513) and Chinese Redwood (GB/T 18107) have been widely used and effectively promote the healthy development of the timber trade.

In order to meet market requirements a number of Standards such as ‘Rotary Veneer Log’, ‘Slice Veneer Log’ and ‘Sawnwood for Instrument’ have been revised and have played a role in the realization of an efficient and regulated market.

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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