Worldwide Business Trends

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Canada– The Canadian Hardwood Plywood and Veneer Association (CHPVA) welcomes the Canada Border Services Agency’s (CBSA) preliminary dumping and subsidy determination on decorative and other non-structural plywood imports into Canada from China.

The CBSA investigation was initiated in response to a complaint filed by the CHPVA and three of its member producers of decorative and other non-structural plywood, namely Columbia Forest Products, Husky Plywood (a division of Commonwealth Plywood), and Rockshield Engineered Wood Products.

The CBSA determined combined margins of dumping and subsidy of up to 203 percent for the vast majority of Chinese exporters. There were, however, some individual exporters that received significantly lower margins. These provisional duties apply to decorative and other non-structural plywood imported into Canada as of October 23, 2020.

While the CHPVA is disappointed in the low margins for certain individual Chinese exporters, the CBSA is continuing its investigation and reported it is optimistic that the CBSA will find significant dumping and subsidy margins for these exporters after completing the full investigation.

Duties may also apply retroactively if the Tribunal determines there was a massive importation of decorative and other non-structural plywood from China. Depending on the circumstances, duties could apply to certain decorative and other non-structural plywood imported into Canada as of July 25, 2020.

The CBSA will make a final dumping and subsidy determination by January 21, 2021 and the Canadian International Trade Tribunal will make a final injury determination by February 19, 2021.

Indonesia– Despite the ongoing global pandemic, wood product exports here for the first three quarters of 2020 jumped to US$8.3 billion, just below the US$8.5 billion earned in the same period in 2019, the International Tropical Timber Organization (ITTO) recently reported.

The value of Indonesia’s wood product exports in the first eight months of 2020 amounted to around US$7.2 billion. This was almost 7 percent down compared to the same period last year when exports earned over US$7.7 billion.

FORESTHINTS.NEWS quoted the Ministry Secretary General, Bambang Hendroyono, as saying, “The improvement in export performance means that we remain in alignment with our efforts to avoid layoffs, as much as possible, in the forestry business sector. This is among our minister’s top priorities.”

Germany– Every year in Germany, specialists in the hardwood sector meet in the fall for talks involving forestry companies and wood processing representatives. The recent 2020 talks highlighted that the pandemic has further complicated a situation marked by forests and sawmills struggling to keep up. Technical unemployment, full warehouses with damaged wood, uncertainties in the regional and export markets, make things hard for the companies in the industry, according to published reports.

Beech trees, already weakened by last year’s large-scale drought, are again particularly affected. This applies to Beeches in dry and damp locations. As it is difficult to assess the future volume of damaged timber, and the reaction of the markets, caution is required. What counts above all is to quickly transform damaged wood, noted the report, early pruning of the overall log and rapid skidding in order to limit the loss of quality as much as possible.

Also regarding Beech, a reduction in cuts is expected as a result of the disasters. The supply is facing a demand which is currently reduced compared to last year.

There is still demand for Oak from the woodworking industry, although the sale of poorer qualities can prove to be difficult. Reasonable prices were paid for good qualities in the previous year. The spread of the Oak beetle continues to cause concern, causing damage to the wood and thus contributing to the devaluation of Oak. In order to prevent this as much as possible, attention should be paid to rapid removal from the forest and spatially separate piling of infested and fresh wood so that not yet infested wood remains free of damage, according to a report from the meeting in Germany.

Ash wood remains in its own market, mainly supported by exports and is, therefore, influenced by global political decisions. It is becoming apparent, however, that the supply peak has been exceeded and it is unclear how demand will develop over the season.

Europe– Recently, the European Commission took a step forward in its work against global deforestation. The new multi-stakeholder platform, launched recently to help protect and restore the world’s forests, brings together an unprecedented range of stakeholders and expertise: consumer and producer countries, civil society organizations, and industry associations. In addition to being a forum for exchanges, the platform is to serve as a policy-making tool – informing the Commission’s ongoing work on a legislative proposal to minimize the risk that products linked to deforestation be sold in the European market, planned for the second quarter of 2021.

 The platform provides a forum to foster exchanges among stakeholders in order to build alliances and push for and share commitments to significantly reduce deforestation. Participants include representatives of EU Member States, top NGOs in the field of forest protection, industry organizations, international organizations, and non-European countries, including the largest consumer markets outside the EU and some of the countries experiencing significant destruction of their forests.

The impact assessment will assess a wide range of measures, such as approaches similar to the EU system against illegal, different verification systems and due diligence, among others.

Nova Scotia –The Nova Scotia Timber Loan Board has made some regulatory changes to make it easier for forestry companies to access financing. According to a government press release, the Timber Loan Board has improved lending terms, eligibility and instituted a revised fee structure. These changes are based on recent amendments to the regulations governing the Farm and Fisheries and Aquaculture Loan Boards.

Loans are administered by the Nova Scotia Department of Agriculture’s Crown Lending Agency. The province’s Forestry Transition Team has endorsed this plan.

“We have worked hard to modernize the province’s lending boards for our key economic sectors and we’re pleased to extend the same to the forestry sector,” said Keith Colwell, Nova Scotia’s Minister of Agriculture and Fisheries and Aquaculture, in a statement. “Now, the Timber Loan Board can provide services to help develop and innovate our forestry sector when it is needed most.”

Vietnam– The Office of the U.S. Trade Representative (USTR) announced initiating an investigation addressing two significant issues with respect to Vietnam.

USTR will investigate Vietnam’s acts, policies, and practices related to the import and use of timber that is illegally harvested or traded, and will investigate Vietnam’s acts, policies, and practices that may contribute to the undervaluation of its currency and the resultant harm caused to U.S. commerce.

USTR will conduct the investigation under Section 301 of the 1974 Trade Act. As part of its investigation on currency undervaluation, USTR will consult with the Department of the Treasury as to issues of currency valuation and exchange rate policy.

USTR planned to issue two separate Federal Register notices that would provide details of the investigation and information on how members of the public can provide their views through written submissions.

Russia –Russian President Vladimir Putin recently instructed the government to stop the uncontrolled export of unprocessed wood following a meeting on the development and decriminalization of the timber industry, Russian media reported.

Putin went on to ask the government “to prepare a legislative and regulatory framework for solving the following tasks: it is necessary, finally, to put a rigid barrier against uncontrolled export of unprocessed wood.”

Putin went on to say, instead of timber processing, Russia is exporting raw materials, “smuggling them out. There are obvious imbalances in the development of the Russian forestry complex. The leading processing enterprises of the industry are located far from the main centers of product consumption, primarily in the Asia-Pacific region, where a favorable pricing environment is observed, a growing demand, including for ecological fuel, for fuel pellets.”

If approved, there will be a complete ban of shipments of round wood of softwood species out of Russia effective January 1st, 2022.

“I request imposing complete ban on shipment of unprocessed or roughly processed conifer and valuable hardwood out of Russia starting January 1, 2022,” he said and tasked the government with “preparing the legislative base to solve the task of preventing uncontrolled outflow of unprocessed timber.”

Rome, Italy –Recently, the global forestry advisory body to the Food and Agriculture Organization of the United Nations (FAO) released details on how sustainable forest management and forest products are well-positioned to drive a healthy, green, and inclusive recovery as it continues to face serious challenges related to COVID-19 around the world.

In its statement released in Rome, the Advisory Committee of Sustainable Forest-based Industries (ACSFI) referenced the essential role that forestry and forest products have played during the pandemic – and how they can help drive much-needed economic recovery.

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By Miller Wood Trade Publications

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

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