Indonesia – Indonesia’s export of wood products continues to rise even though demand in China has weakened. However, a global recession would seriously impact export growth. Data from the Ministry of Environment and Forestry of The Republic of Indonesia (KLHK) analyzed by the Association of Indonesian Forest Concession Holders (APHI) shows Indonesia’s wood product exports have recently earned US$11.07 billion, a year on year rise of 13 percent.
Most growth came from an increase in exports of paper products (US$3.15 billion), wood panels (US$2.63 billion), pulp (US$2.52 billion) and furniture (US$2.15 billion). Indonesia’s timber export trade depends on four main markets, Japan, the European Union and United Kingdom, the U.S. and the Republic of Korea. A market that has recently been developed is India.
The growth in exports to India is promising and for the year there was a 35 percent expansion. As of recently exports to China were recorded at US$2.36 billion, a 21 percent decline from the same period in 2021.
Indonesia’s wood product exports to Japan in the first three quarters of 2022 increased 15 percent year on year to US$1.14 billion. Exports to the European Union and United Kingdom rose 54 percent year on year to US$1.3 billion and exports to the Republic of Korea increased slightly to US$585 million.
Throughout the year export growth in the U.S. market increased steadily but there has recently been a downturn as wood product exports dipped 19 percent to US$1.77 billion. The decline in exports to the U.S. was because of a drop in furniture exports which fell 40 percent from US$1.41 billion in January-September 2021 to US$849.3 million in January-September 2022.
Brazil – Recently Brazilian exports of wood products (except pulp and paper) declined 11 percent in value compared to September 2021, from US$382.0 million to US$341.6 million.
Pine sawn wood exports dropped 15 percent in value compared to September 2021 (US$82.2 million) and September 2022 (US$69.7 million).
In volume, exports also dropped but by 17 percent over the same period, from 293,100 cubic meters to 242,300 cubic meters.
Tropical sawn wood exports declined 14 percent in volume, from 35,900 cubic meters in September 2021 to 30,800 cubic meters in September 2022. In value, exports grew 21 percent from US$12.2 million to US$14.8 million over the same period. Pine plywood exports witnessed a 48 percent decrease in value in September 2022 compared to September 2021 from US$79.4 million to US$41.7 million. In volume, exports also decreased but only by 28 percent over the same period, from 159,100 cubic meters to 114,100 cubic meters.
As for tropical plywood, exports dropped in volume by a massive 63 percent and in value by 56 percent, from 9,000 cubic meters and US$5.2 million in September 2021 to 2,300 cubic meters and US$3.3 million in September 2022.
As for wooden furniture, the exported value fell from US$71.8 million in September 2021 to US$53.8 million in September 2022, a 25 percent decline.
United Kingdom – Unlike tropical hardwood plywood, UK imports of tropical sawn wood have been buoyant this year. Total UK imports of tropical sawn wood were 74,500 cubic meters in the first eight months of 2022, 34 percent more than the same period last year. In addition to making gains overall, there have been some significant changes in the countries supplying tropical sawn wood to the UK this year.
UK imports of tropical sawn wood from Cameroon were 26,200 cubic meters in the first eight months of this year, 3 percent more than the relatively high level in the same period last year. UK imports of tropical sawn wood from the Republic of Congo have recovered lost ground this year, with imports of 4,900 cubic meters in the first eight months, a 575 percent gain compared to the same period last year, although still down on the pre-pandemic level. UK imports from Côte d’Ivoire were 3,100 cubic meters in the first eight months of this year, a nine percent increase compared to the same period last year.
UK imports from Malaysia, which had fallen to little more than a trickle in recent years, were 13,000 cubic meters in the first eight months of this year, 95 percent more than in the same period last year. UK imports of tropical sawn wood from Brazil were 3,200 cubic meters in the first eight months of this year, 14 percent more than the same period last year but still down on the pre-pandemic level. Indirect UK imports of tropical sawn wood via the EU have also recovered ground this year despite the Brexit disruption, increasing 99 percent to 17,000 cubic meters in the first eight months of 2022.
UK imports of tropical hardwood mouldings/decking were relatively high in the first eight months of 2022, at 8,322 tons, 46 percent more than the same period last year.
This commodity group has benefited in the UK market from shortages of non-tropical products, particularly since the start of the war in Ukraine and sanctions on Russian decking products that directly compete with tropical decking.
Imports of 3,200 tons from Indonesia were 69 percent more than the same period last year. Imports of 2,000 tons from Malaysia were 32 percent up on the same period in 2021. Imports from Brazil increased 24 percent to 1,600 tons during the eight-month period.
Switzerland – Despite the increasing proportion of hardwood in Swiss forests, the local sawmills are finding it increasingly difficult to obtain logs that can be sawn, since the roundwood is increasingly being used directly to generate heat – whether as wood chips or logs. From the point of view of the Holzindustrie Schweiz Organization, this development is questionable.
Ultimately, wood should ideally be used first as a material and then as an energy source according to the Cascade principle. Although one is not fundamentally opposed to the use of wood energy, this should not be allowed to gain the upper hand at the expense of material use. This tendency is reinforced by the subsidization of wood heating, but of course also by the current energy crisis. Accordingly, one warns that the legal framework should be adjusted.
Africa – Mills in Cameroon were expected to be back in full operation this month, but the wet weather continues, and producers say it will be some time before they can resume full production.
With there being a slowdown in demand in China, log stocks have accumulated in the port and there are reports that degraded logs, no longer suitable for export, are being purchased by local mills.
All producers who were heavily committed to the Chinese market are feeling the effects of the weakening demand and this is likely to spill over to price volatility.
There are reports that in recent weeks buyers for the Chinese market have been asking to renegotiate contracts. What will be interesting is the impact of the ban on log prices especially for Ayous, Sapelli, Sipo, Iroko, Talli, Tiama and Doussie.
With the decision by Central African Economic and Monetary Community (CEMAC) countries to stop log exports, it is expected that there will be a surplus of logs available until the pace of harvesting matches demand from mills. Concern has been expressed that the export ban will result in job losses, but some say millers will welcome additional workers.