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28.07.2023
ITTO has published its tropical timber market report for the first half of July 2023.
One of the main topics is the European associations' demand for restrictions on oak log exports. The sharp increase in the volume of European oak log exports to China in 2022 has prompted several European forest products associations to show the European Commission that this trade has "reached an unsustainable level and risks jeopardizing the viability of the (EU) industry". The action is being taken by the European Organization of the Sawmill Industry (EOS). EOS member countries are Austria, Belgium, Denmark, Finland, France, Germany, Latvia, Norway, Romania, Sweden and Switzerland.
On the other hand, according to the EOS annual report published in June, tensions persist on the supply of hardwood logs in Europe: the availability of hardwood logs is currently under considerable pressure in Europe due to the combined effects of lower forest productivity due to climatic disturbances, increased log exports to China and a wide range of new political and regulatory measures. This means that European hardwood prices have remained relatively firm, particularly for oak, even though consumption is falling as a result of the economic slowdown. The annual report includes data on sawnwood production and consumption for the 11 EOS member countries, as well as for the UK and Italy, which are the main consumers. EOS estimates that total sawnwood production in the 13 countries was 92.3 million cubic meters in 2022, down 4% on the previous year.
Other topics include:
The measurement of the impact of the Gabonese timber industry on the economy. At the end of June, Gabon's Minister of Water, Forests, Sea and Environment was presented with a report on the contribution of the timber industry to the Gabonese economy, produced by Ernst & Young and Mays Mouissi Consulting with the aim of measuring the impact of the forestry sector on economic, fiscal and social development. A summary of the main findings was reported by Alix-Ida Mussavu in the Revue du Gabon where he states that between 2014 and 2022, forestry sector sales increased from 28 billion CFA francs to 93 billion CFA francs. Forest industry sales (in particular the veneer sector) increased by 455 billion CFA francs (+290%) to reach 611 billion CFA francs in 2022.
The Ghana Chamber of Commerce's call for tax breaks as part of the mid-year budget review. The Ghana National Chamber of Commerce and Industry (GNCCI) has urged the government to consider introducing a number of tax breaks as part of the mid-year budget review. According to GNCCI President Clément Ose-Amoako, this has become necessary to offer respite to businesses and stimulate economic recovery.The Chamber believes that the austerity measures introduced in the 2023 budget to meet the conditions of the International Monetary Fund (IMF) bailout program have severely affected local businesses, but as macroeconomic conditions show signs of improvement, the government could remove some of the taxes that are "tormenting". The Association of Ghana Industries (AGI) and other businesses have also called on the government to review the current high taxes that are hampering business growth. Some economists have also called for a major review of tax targets and a recalibration of taxes in the mid-year budget, as Ghana's tax system is causing great concern, as it is seen as a hindrance to competitiveness.
A study by La Hong Leong Investment Bank (HLIB) Research suggests bleak market prospects for Malaysian furniture exports due to housing problems in the USA, the sector's main export destination. According to the research firm, the US housing market began to cool after the Federal Reserve began raising interest rates in 2022, as mortgage payments began to rise. HLIB reported that housing starts were at a standstill and existing homeowners were reluctant to sell, as many had low-interest mortgages that they risked losing if they sold. The Malaysian Timber Council reported that wooden furniture exports fell by almost 40% in the first four months of 2023. Singapore, Malaysia's second-largest export market for wooden furniture, increased its imports in early 2023, offsetting some of the decline in US imports.
Microfinance lender withdraws from Myanmar: Pact Global Microfinance Fund (PGMF), Myanmar's largest microfinance lender, is winding down its operations in the country, explaining that government requirements prevent it from continuing its efforts to serve low-income households, including those without access to the formal banking system. PGMF is the microfinance unit of PACT, an international non-governmental organization. PGMF announced its closure after forgiving more than US$156 million in outstanding loans to 890,000 borrowers and setting aside money to repay investors. For over 25 years, the fund has been providing microloans, mainly to women in rural areas.
Two recent reports on furniture market trends in India. The IMARC report suggests that the construction industry and the development of smart city projects represent a factor influencing the furniture market. In addition, the integration of advanced technologies such as artificial intelligence, machine learning, the Internet of Things, 3D printing, virtual reality and augmented reality into furniture manufacturing could transform production. Rising living standards and the associated demand for quality furniture will be another major factor, as will the expansion of the e-commerce sector.
ADEX-Peru's proposal to create a forest seed bank. Enrique Toledo, Vice-Chairman of the Timber Committee of the Association of Exporters (ADEX), has proposed that the National Institute of Agrarian Innovation (INIA) manage a forest seed bank for the reforestation of degraded Amazonian lands. Mr.Toledo suggested that the development of a seed bank should be complemented by genetic research to ensure proper ecological restoration. Over the past 60 years, some 10 million hectares of forest have been lost to migratory farming, cattle ranching, illegal coca cultivation and illegal mining. Over time, much of the land has been abandoned due to loss of fertility, resulting in ecological damage. According to ADEX, private companies have reforested 40,000 hectares of the Peruvian jungle. The reforestation of one million hectares (land deforested and degraded by migratory cultivation) could generate revenues of around 1.5 billion US dollars through the manufacture of wood products, according to ADEX. In addition, such an effort would create around 400,000 direct and indirect jobs in the forestry, logging, timber industry and service sectors.
Increased US imports of hardwood plywood from Russia and China. Imports rose by 36% in May, for the third consecutive month. The 218,862 cubic meters of plywood imported last month represent the highest volume since the beginning of the year, but are only two-thirds of the volume imported the previous May. Imports from Russia rebounded, increasing more than eightfold in May, while imports from China rose by 70%. Despite this upward trend, total year-to-date imports are 58% below 2022 levels, with volume from almost all trading partners (with the exception of Ecuador) down by more than half.
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