Impact of Covid 19 on the wood market

27.03.2020
COVID-19

For information on the progress of the spread and the disease situation: https://www.worldometers.info/coronavirus/

We bring you here, and will continue to do so in the coming weeks, the information provided by our members and partners regarding the tropical timber market and the activities of companies in Europe, Africa and Asia.

France:

Industrial activities have been at a standstill since 17 March, the beginning of the containment: industrial joinery, carpentry, furniture and panel factories have stopped producing almost 90% of their production. The building and public works sector is also at a standstill, with only maintenance and repair activities continuing. A guide to preventive measures is currently being drawn up with the ministries to ensure that construction sites can be resumed, with regard to the health of employees and the criminal and contractual liability of companies.

Each sector is working on a business continuity plan, without being able to set a date at this time.

Ivory Coast :

Measures in place

  • Closure of land, air and sea borders except for medical evacuation and food cargo – announced 20 March 2020.
  • Closure of schools and suspension of sports and cultural events – announcement made on 16 March 2020.
  • Prohibition of gatherings of more than 50 people for 15 days renewable from March 18, 2020 (Demonstration, workshops etc )
  • Starting at 9 p.m. all over the country.
  • Closure of non-essential shops, restaurants, maquis etc. and regulation of all means of transport to meet quotas.

Congo Basin

Gabon:

The country took action as early as March 13, the latest measures following the March 20, 2020 announcement are (non-exhaustive) : 

  • Closures of all land, air and sea borders + bans on domestic flights except for medical evacuation and cargo.
  • Ban on gatherings of more than 10 people and closure of schools, places of worship, leisure sites, restaurants (except home deliveries) and various businesses (markets, motels, ready-to-wear, jewellery shops, hairdressing salons etc.).
  • The limitation of the operation of public services to activities essential to the life of the Nation (system of work by turn over, regulation of the flow of agents and users) – Circular of 20 March 2020.
  • Limitation of non-essential travel.

The three unions of the forest-wood sector met with Minister Lee White concerning the situation of the sector following the Corona Virus epidemic in the world and the first cases in Gabon. The unions asked for accompanying measures for companies (especially fiscal) – consider deferring the Surface Tax? 

The government does not intend to suspend production activities and intends to provide the necessary support to maintain activities in compliance with anti-VIDOC measures – to be followed.

In Gabon, the timber market was experiencing difficulties in China and other Asian countries, particularly in relation to competition from logs from Cameroon, to which the unprecedented situation of COVID-19 has been added: the activities of several companies have been sharply reduced.

Additional information: The port of Gabon is taking all the necessary steps to ensure the continuity of operations. Measures have been taken for the transport of personnel for night shifts in particular and operations continue 24 hours a day. The port will be operational on weekends for deliverys/receipts if Carriers apply to open at customs.

DRC

Following the announcement of March 18, 2020, here are some measures:

  • Closure of bars, cafés, restaurants and schools
  • Prohibition of all gatherings, meetings, celebrations of more than 20 people outside the family home.

As in most of the countries of the Congo Basin at present, it is noted :

  • a reduction in activities with sawmills operating at half speed and a major slowdown in activities in the forest: many workers are technically unemployed.
  • a drop in exports as a corollary of the level of operation of companies during this period. All state services are operating with minimum service, for a few hours. For example, the Cites/DRC Management Body operates 2 days out of 6 working days.
  • a cancellation of the orders placed with the main customers

Congo

Provision made by the Government :

  • – March 21, 2020 announcement – immediate border closure
  • – Closure of places of worship, pre-school, primary, general secondary, technical and vocational schools and higher education establishments, both public and private. – Announcement of 18 March 2020
  • – Postponement of international events planned in Congo to a later date

Business activities are idling: many sawmills are at a standstill and therefore employees are technically unemployed. At the logging level, shifts have been reduced in order to comply with government measures. Rolling continues, but at a slower pace. Exports are considerably down.

Cameroon

  • Land, air and sea border closures until further notice – announcement of 17 March 2020
  • Suspension of visa issuance in Cameroonian embassies – announcement of 17 March
  • Prohibition of gatherings of more than 50 people
  • Closure of schools and universities – March 17 announcement
  • Beverage Store Closures – March 17 Announcement
  • Restaurants and other places of leisure are closed from 6pm.
  • Urban and intercity travel to be carried out in cases of extreme necessity

On March 17, the Cameroonian government published its response strategy to the CORONAVIRUS pandemic by implementing a series of measures to protect the population and limit the spread of COVID-19. The continuity of economic activity is desired by the authorities.

The companies in the timber sector are therefore organising themselves to protect their staff with instructions and rules of prevention.

On the export market, the log market remains in demand in Asia (China and Vietnam), the market for processed products (worldwide) has slowed down sharply, depending on the destination, some customers are asking for contracts to be postponed.

The ports of Douala and Kribi are setting up health checks for ships, and loading rates are therefore being slowed down, leading to lower turnover. 

As everywhere else, the situation related to the Covid-19 epidemic remains uncertain at this stage.

China

Despite the lack of visibility for the coming months the situation has stabilized. Business resumed on 7 March in China. However still a great slowdown in the market, some companies have temporarily closed due to lack of new orders. Chinese companies in Africa are trying to continue operations, including at night with special measures. However, in Gabon and the DRC internal transport is blocked for people, which poses maintenance problems in particular.