ITTO has published its tropical timber market report for the first half of October 2023.
One of the main topics is Indonesia and its strategy to balance industrial timber production and ecosystem restoration. The Director General of Sustainable Forest Management at the Ministry of Environment and Forestry, Agus Justianto, presented a strategy for integrating sustainable wood supply and forest restoration at an FAO event in Australia. Indonesia is promoting sustainable management of production forests and land rehabilitation using a business approach that integrates ecosystem restoration. Indonesia's wood-processing industry is seeking to improve its efficiency in the face of raw material scarcity. A broader approach, integrating environmental and social aspects, is recommended for success in this sector. A sustainable raw materials supply chain is encouraged.
Other topics include:
European consumption of wooden furniture, which is falling to its lowest level since 2015. Over the past three and a half years, the European wooden furniture sector has undergone major upheavals. The Covid-19 pandemic, followed by the war in Ukraine in 2022, caused unprecedented variations. Demand fell briefly in the second quarter of 2020, then rose sharply in 2021 despite material shortages and logistical problems. However, from the second half of 2022, a further significant decline continued into 2023. These fluctuations impacted supply and demand structures, trade flows, consumer preferences, working conditions, distribution channels, design and trends. Production and consumption of wooden furniture in the EU27+United Kingdom fluctuated considerably: -9% in 2020, +27% in 2021, -11% and -12% in 2022, forecasting a further drop of 6% and 10% in 2023, bringing the sector back to its 2015 level, with a forecast value of around 38 billion euros.
New regulations for logging in the Amazon. The Mato Grosso State Secretariat for the Environment (SEMA-MT) has announced new regulations (normative instruction no. 6/2023) aimed at improving forest management. The main changes include procedures for monitoring felled trees and their location after sawing, and the use of environmental monitoring in approved management projects. These measures strengthen inspection along the chain of custody, thanks to the new wood traceability system (SISFLORA 2.0) in force since April. The regulations also introduce the requirement for a consignment note containing detailed information on transported products, enabling 100% traceability of forest products in the state of Mato Grosso. This initiative promotes legal timber trade, opening up opportunities in strict markets, including export markets.
Gabon's Special Economic Zone mills account for 60% of exports. In 2022, operators in Gabon's Special Economic Zone (GSEZ) processed 1,153,599 m3 of logs, exporting 622,026 m3 of wood products, representing around 60% of the country's wood exports. Exports of wood products have become Gabon's second largest export product after oil, but in the second quarter of 2023, wood production fell by 29% due to logistical problems, affecting mill supplies.
US imports of sawn tropical hardwoods increase for the third consecutive month. In August 2023, US imports of sawn tropical hardwoods rose by 3% on the previous month, reaching a monthly volume of 19,329 cubic meters, the highest of the year. Despite a 30% drop in imports from Brazil, imports were up 7% on August 2022, thanks to a 65% increase in imports from Cameroon, 41% from Congo/Brazzaville, 31% from Indonesia and 21% from Malaysia. Imports of African mahogany tripled in August, while other woods also recorded significant increases. However, imports remain down 31% year-on-year through August, except for Keruing, which is up 19% year-on-year. In addition, Canadian imports of tropical sawn timber rose by 6% in August, with notable increases from Ghana (38%) and Cameroon (25%), although total imports into Canada remain down 12% year-to-date to August.
Dramatic drop in China's birch log imports. In the first eight months of 2023, Chinese imports of birch logs fell sharply, reaching 971,231 cubic meters worth US$130.73 million (€124 million), down 33% in volume and 36% in value compared to the same period in 2022. The average CIF price of Chinese birch log imports fell by 5% to US$135 (€127.87) per cubic meter. The main suppliers were Russia and Latvia, with 95% of imports coming from Russia. Higher taxes on birch log exports to Russia put pressure on Chinese companies, contributing to the drop in imports.
Continued decline in Japanese household spending. In August, Japanese household spending fell by 2.5% year-on-year, marking the sixth consecutive month of decline. Price rises prompted cuts in spending on food, education and non-essential household goods. Spending on food fell by 2.5%, while spending on education dropped by 14%. Real wages also fell by 2.5% in August, impacting private consumption, a key component of Japan's GDP. However, travel spending rose by 3% with the lifting of COVID-19 restrictions.
Malaysia launches its carbon exchange. The Malaysian Carbon Exchange (BCX) has introduced a continuous trading and off-market transaction system for carbon credits, promoting carbon reduction initiatives and sustainable development. Ten companies successfully traded 16,500 carbon credits on the BCX platform in the first two days. Continuous trading involves standard market contracts, while off-market transactions are negotiated bilaterally after approval by Bursa Malaysia.