itto mis report

8/6/2019 Itto Mis Report

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2 ITTO TTM Report 16:14 16 31 July 2011

Report from Central/West Africa

Latest contracts reflect higher pricesIn response to firm demand there were some upward pricemovements during the second half of July. These changesreflect price levels agreed in contracts placed earlier in themonth which are now coming through the system. Thereare changes for both logs and sawnwood and the marketremains quite stable, even at the higher prevailing prices.

However, some exporters have been told by buyers thatthe upper price limit has been reached and there is somefeeling on the part of producers that price weakness couldbegin to appear towards year end.

Long delivery times of concern to UK importersDelivery times from West and Central African sawnwoodproducers are currently between two and three monthsand, while this appears to be accepted by many buyers,there are UK importers who feel this is too long a period.

Some buyers did voice concern that when Gabon bannedlog exports there was insufficient sawmilling capacity tomeet the rise in demand for sawnwood. This seems to havebeen correct and it is this lack of milling capacity that hascontributed to the current long lead times for sawnwood.

Producers confident of buyers return after vacationsMany producers are confident that current prices willremain firm through into the European winter months.They are aware that stocks in Europe are still on the lowside and that buyers may well be forced to return to themarket especially when activity in the construction sectorresumes once the European vacation season is over.

China and India are still very active buyers especially of logs; however the much tighter restriction on log exportsfrom most of the major African producer countries hasseriously reduced availability in the past two years.

Production of boules expands to reduce delivery timesThe restrictions on log exports are seen as the mostprobable triggers for the current increase in production andsales of boules and clean sawn timber. These items canbe cut with smaller semi-portable machinery and notnecessarily in permanent conventional sawmills.

These alternatives to fully sawn and graded sawnwood arehelping to shorten delivery times and are available atprices which are attractive to buyers. For producercountries there is an increase in employment, a reductionof residues and a new source of export revenue.

Log Export PricesWest African logs, FOB per m 3 Asian marketAcajou/ Khaya/N'GollonAyous/Obeche/WawaAzobe & EkkiBelliBibolo/DibtouBubinga

IrokoOkoume (60% CI, 40% CE, 20% CS)(China only) MoabiMovinguiNioveOkanPadoukSapeleSipo/UtileTali

LM205200 205215 145790

285250

280185 155 320380245275285

B205200 205215 130625

280-

280150155 320345235250285

BC/C165145122-

480

215-

190140--235175 190-

Sawnwood Export Prices West African sawnwood, FOBAyous FAS GMS

Bilinga FAS GMSOkoum FAS GMSMerchantableStd/Btr GMS

Sipo FAS GMSFAS fixed sizesFAS scantlings

Padouk FAS GMSFAS scantlingsStrips

Sapele FAS Spanish sizesFAS scantlings

Iroko FAS GMSScantlingsStrips

Khaya FAS GMSFAS fixed

Moabi FAS GMSScantlings

Movingui FAS GMS

per m 3 300

495 440290330500

-415

815 795

340370430

655 655 405 415 430530

535420

Report from Ghana

Emerging trade partners push African manufacturedexports upAfrican exports of manufactured goods have doubled overthe last ten years with the rise in demand for goods byemerging trade partners, says a new report.

According to the African Economic Report the share of

trade conducted by the continent with emerging partnershas grown from approximately 23 per cent to 39 per centin the last decade.

The report shows that China replaced the US in 2009 asthe main Africa's trading partner. Africa's top fiveemerging trade partners include China (38 per cent), India(14 per cent), Korea (7.2 per cent), Brazil (7.1 per cent)and Turkey (6.5 per cent).

However, the European Union and the US remain the mostimportant sources of Foreign Direct Investment forAfrican countries, says the report.


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Domestic Log PricesUS$ per m 3 Ghana logs

WawaOdum Grade ACeibaChenchenKhaya/Mahogany (Veneer Qual.)Sapele Grade A

Makore (Veneer Qual.) Grade A

Up to 80cm140-150165-170115-124

90-100107-120145-155

128-135

80cm+157-170175-185128-143105-120125-145160-185

140-166

Domestic Sawnwood Prices

Wawa 25x300x4.2mEmeri 25x300x4.2mCeiba 25x300x4.2mDahoma 50x150x4.2mRedwood 25x300x4.2mOfram 25x225x4.2m

US$ per m 3 296310233

310 414332

Export Sawnwood PricesGhana Sawnwood, FOB per m 3 FAS 25-100mm x 150mm up x 2.4m upAfrormosiaAsanfinaCeibaDahomaEdinam (mixed redwood)EmeriAfrican mahogany (Ivorensis)MakoreNiangonOdumSapeleWawa 1C & Select

Air-dried855500215320 400350 568530515625545 260

Kiln-dried-

560269385450430685 585590690615 285

Export Veneer PricesRotary Veneer, FOB per m 3

BombaxOfram,

Ogea & OtieChenchenCeibaMahogany

CORE (1-1.9mm)315320

315315330415

FACE (


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Report from Malaysia

Malaysia accounts for the worlds largest certifiedtropical forest says MTCCThe Malaysian Timber Certification Council (MTCC) saysthat there are 5 million ha. of certified tropical forest inMalaysia, making this the worlds largest on record.

Only 10% of the worlds commercial forests, that is 375million ha. have been certified to date. About 53.8% of thecertified forests are in North America, 34.4% in EUcountries and a mere 2.1% in the Asia-Pacific region.

Malaysia is also one of the leading exporters of certifiedtimber products with monthly exports of up to 7,000 cu.mof certified timber products, mainly in the form of laminated finger-jointed products, plywood, sawnwoodand timber mouldings.

Up to March 2011 a total of 463,730 cu.m of certifiedtimber products have been exported to 22 countries.

Procurement policies drive demand for certified woodThe MTCC says that certified timber products earn apremium of between 2% to 4% in the Netherlands, one of Malaysias main markets for timber products.

The Netherlands and nine other countries, Belgium,Denmark, Finland, France, Germany, Japan, New Zealand,Switzerland and the UK have enforced public procurementpolicies that encourage the acceptance of certified timberproducts for publicly funded projects.

Likewise, large DIY store chains such as Home Depot inthe US and B&Q in the UK have mandated theprocurement of certified timber products in their corporateprocurement policies.

In addition, a growing number of green buildings schemeson both sides of the Atlantic are placing a greateremphasis on timber products certified under PEFC(Programme for the Endorsement of Forest Certification)or Forest Stewardship Council (FSC).

There were nine certified forest management units (FMUs)holding valid PEFC schemes certificate for forestmanagement in Malaysia as of July 1, 2011.

PEFC began endorsing the Malaysian Timber CertificationScheme (MTCS) in 2009 and will continue to do so overthe next five years.

Appeal against anti-dumping duties on plywoodThe Sarawak Timber Industry Development Corporation(STIDC) will assist Malaysian plywood producers inappealing against the anti-dumping duties being applied bythe South Korean government on Malaysian plywood.Eight of the nine plywood producers affected by the anti-dumping duties are from Sarawak.

The STIDC will monitor the pricing of plywood untilFebruary 2012, after which the appeal would be lodged.

The purpose of the price monitoring is to show that anysuggestion of dumping has not existed for 12 months.

STIDC has advised plywood producers affected by theanti-dumping duties that they could file for a reviewthrough the Ministry of International Trade and Industry(MITI) after a one year period.

Log Export Prices (Sarawak)Sarawak log, FOBMeranti SQ up

SmallSuper small

Keruing SQ upSmallSuper small

Kapur SQ upSelangan Batu SQ up

US$ per m 3

260-287 252-281 251-274 243-255 234-266 223-247 235-261 236-269

Domestic log PricesPen. Malaysia logs, domestic(SQ ex-log yard)DR Meranti

BalauMerbauRubberwoodKeruing

US$ per m 3

275-293

325-355 367-398 105-139 245-269

Peninsular Malaysian meranti logs are top grade and are used for scantlings for the EU.Their prices are higher than Sarawaks.

Export Sawnwood PricesMalaysia Sawnwood, FOB

DR MerantiWhite Meranti A & upSeraya Scantlings (75x125 KD)Sepetir BoardsSesendok 25,50mmKembang Semangkok

US$ per m 3

413-449 309-339 451-463 275-304 363-381 337-364

Domestic Sawnwood PricesMalaysian Sawnwood, domesticBalau (25&50mm,100mm+)MerbauKempas 50mmx(75,100 & 125mm)Rubberwood

25x75x660mm up50-75mm Sq.>75mm Sq.

US$ per m 3

345-365V480-532 288-328

240-290 278-310 300-330

Export Plywood PricesMalaysia ply MR BB/CC, FOB2.7mm3mm9mm & up

US$ per m 3

444-505 425-455 376-446

Domestic Plywood PricesMeranti ply BB/CC, domestic

3mm12-18mm

US$ per m 3

367-457 350-379

Other Panel Export and Domestic PricesMalaysia, Other Panels, FOB

Particleboard Export 12mm & upDomestic 12mm & up

MDF

Export 15-19mmDomestic 12-18mm

US$ per m 3

259-282 250-264

311-342 302-321


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Export Added Value Product PricesMalaysia, Mouldings, FOBSelagan Batu DeckingRed Meranti Mouldings

11x68/92mm x 7ft upGrade AGrade B

US$ per m 3

573-583

587-600 542-552

Export Furniture and Parts Prices

Malaysia, Rubberwood, FOBSemi-finished dining table

solid laminated top 2.5'x4', extension leafAs above, Oak VeneerWindsor ChairColonial ChairQueen Anne Chair (soft seat)

without armwith arm

Chair Seat 27x430x500mm

Rubberwood Tabletop22x760x1220mm sanded & edge profiled

Top GradeStandard

US$ per piece

78-94 85-99 77-79 75-80

77-86 75-84 63-68

US$ per m 3

630-660 613-629

Report from Indonesia

EU Markets will close to non-certified productsThe Indonesian timber industry could find its woodproducts being excluded from the European Unionmarkets and severely restricted in the US as well as inJapan if manufacturers do not move quickly to securetimber certification.

The Indonesian government has signed a VPA with theEU and this is likely to be ratified in September this year

after which enforcement of the Wood LegalityVerification System is set to begin in March 2013.

Markets in Japan at risk tooApart from the lack of certification, reports suggest that atpresent only 2 plywood manufacturers out of the 40 inCentral Java meet the Japan Agriculture Standard (JAS)for timber and timber products to be used for buildingmaterials.

Timber products manufacturers have been advised toacquire the appropriate timber products certification assoon as possible to avoid any loss of market share in the

EU, USA and Japan.Investments for environmentally sustainable greenprosperity .The US State Department has indicated that Indonesiacould secure millions in financial aid over the next fewyears for the development of a sustainable and greeneconomy.

Indonesia stands to gain $600 million over the next fiveyears under the Millennium Challenge Corporationcompact for investments in environmentally sustainablegreen prosperity.

Currently, the two countries are working to complete asecond agreement on forest conservation beforeSeptember 2011. The US State Department will contribute$20 million towards the fulfilment of that agreement.

Specialty furniture market in US remains firmThe demand for Indonesian timber products is growingwith timber merchants and manufacturers receiving moreorders and enquiries from China, India, Japan and SouthKorea.

With the coming of the Muslim fasting month, manyMiddle-Eastern importers are also keen to have contractsconcluded before the fasting month begins, triggering oneof the sharpest rise in prices for Indonesian timberproducts in 2011.

Indonesian furniture manufacturers added that whiledemand in the US market is still weak, orders for specialtyfurniture and hand-made furniture are growing.

Although the US financial crisis may have hit mostconsumers in the middle income band, the upper-middleclass band of consumers still have money for remodelingduring the summer vacation season.

Domestic Log PricesIndonesia logs, domestic pricesPlywood logs

Face LogsCore logs

Sawlogs (Meranti)Falcata logsRubberwoodPine

Mahoni (plantation mahogany)

US$ per m 3

220-263 207-236 215-275 185-216

93-97 194-237

497-529

Domestic Ex-mill Sawnwood PricesIndonesia, construction material, domesticKampar (Ex-mill)

AD 3x12-15x400cmKDAD 3x20x400cmKD

Keruing (Ex-mill)AD 3x12-15x400cmAD 2x20x400cmAD 3x30x400cm

US$ per m 3

207-226 221-256 241-264 242-271

256-270 246-264 229-248

Export Plywood PricesIndonesia ply MR BB/CC, export FOB2.7mm3mm6mm

US$ per m 3430-486 388-429 367-409

Domestic Plywood PricesMR Plywood (Jakarta), domestic

9mm12mm15mm

US$ per m 3

287-298 278-289 268-283


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Export and Domestic Other Panel PricesIndonesia, Other Panels, FOB

Particleboard Export 9-18mmDomestic 9mm

12-15mm18mm

MDF Export 12-18mmDomestic 12-18mm

US$ per m 3

243-252 223-235 217-229 213-224 274-289 258-270

Export Added Value Product PricesIndonesia, Mouldings, FOBLaminated BoardsFalcata wood

US$ per m 3

325-338 Red Meranti Mouldings 11x68/92mm x 7ft up

Grade AGrade B

519-550 476-499

Report from Myanmar

India is the main destination for ocean shipments ofhardwoods from MyanmarDuring the first quarter of the current fiscal year more than

80 per cent of all shipments of both teak and otherhardwoods from ocean ports in Myanmar went to India.

Less than 20 per cent was shipped by sea to China,Thailand, Vietnam, and Bangladesh. Records of the crossborder timber trade with China are not available. India isby far the most important market for both teak andhardwoods from Myanmar.

About 70% of non-teak hardwood shipments last yearwent to India, followed by Bangladesh, China andVietnam and about 80 % of teak went to India, theremaining 20% was shipped to Thailand, China andVietnam.

Appreciation of the Kyat wipes out gains from exporttax reductionThe governments decision to reduce the export tax by 3per cent beginning this month (July 2011) has beenwelcomed by the private sector. However, exporters feelthat the reduction should be much more than 3 per cent.Opinions differ concerning how much the reductionshould be.

The local timber industry says the export tax on processedadded value wood products should be minimal. Some

argue that if the government wants to tax timber exportsthen the levy should be on log exports. They argue thatthis would reduce sales of logs and help the developmentof the value added sector in the country.

Despite the reduction of 3 percent the exporters claim theyhave gained little since the Myanmar Kyat has appreciatedabout 20 percent against the US dollar within one year.

The state owned newspaper, the Mirror Daily, has reportedthat during a meeting with the executive committee of theMyanmar Bankers Association the Union FinanceMinister reportedly said that arrangements are underway

to determine exchange rates for the Myanmar kyat that arestable as well as beneficial for the country.

Until concrete and viable results emerge, the businesscircle is said to be facing difficulties adjusting to the newexchange rate.

Myanmar Teak Log Auction Prices (natural forest logs)Teak Logs, FOB Avg per Hoppus Ton

(traded volume)

Veneer Quality 2nd Quality

3rd Quality

4th Quality

Sawing Quality Grade 1 (SG-1)

Grade 2 (SG-2)

Grade 4 (SG-4)

Grade 5 (SG-5) Assorted

Grade 6 (SG-6) Domestic

Grade 7 (ER-1)

Junenil

nil

4,412(10 tons)

3,128(37 tons)

2,943(23 tons)

2,188(231 tons)

1,376(159 tons)

1,299(47 tons)

970(115 tons)

Julynil

nil

4,546(11 tons)

3,143(35 tons)

2,994(41 tons)

2,092(213 tons)

1,473(153 tons)

1,284(116 tons)

968(35 tons)

Hoppus ton=1.8m 3; All grades, except SG-3/5/6, are length 8 x girth 5 &up.SG-3/4/6 are girth 4 &up. SG-3 grade is higher than SG-4 but with lowergirth and price. Prices differ due to quality or girth at the time of thetransaction.

Buyer participationHong Kong 134 tonsSingapore 89 tonsThailand 263 tonsIndia 117 tons

Hardwood log pricesHardwood log prices FOB per hoppus ton

Pyinkado export qualityGurjan export quality

Euro per m 3

555439

Prices are in Euro per hoppus ton FOB (Hoppus ton equivalent to1.83 cu.m)

Report from India

Inflation fears prompt another interest rate hikeAnalysts report that inflation in India is expected to remainhigh until year end. Annualised inflation grew to over 9per cent in June largely due to the rising costs of manufactured products and gasoline.

In its latest meeting the Reserve Bank of India raised itskey interest rate by half a percent, the 11th rise in less thana year and a half. In a statement the Reserve Bank saidthat inflation remains the countrys main economicconcern.

Interest rates have been raised 10 times since March 2010.High inflation is increasing the cost of servicing loans as


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well putting pressure on companies with regards to rawmaterial costs and wages.

Export performance sustainedFigures released by Ministry of Commerce indicate a riseof 46% in exports during the month of June 2011 toUS$29 billion. At the same time imports rose by 42percent compared to the figures a year ago to reach US$36billion. This is despite experts doubting the sustainabilityof such high growth due to uncertainty in global markets.

Imports of hardwood logs (excluding teak) fromtropical regions via Kandla Port

cubic metresAcacia spp. 3395Arau 77588Beli 296Eucalyptus 1246Greenheart 102

Gurjan 114849Keruing 147400Kapur 247504Mahogany 162Meranti 950363Mersawa 9685Padouk 109Resak 272524Selangan Batu 135468Sapelli 1210Wenge 174Ot her.sp ecies 1349

Total 1963424

Imports of hardwood logs from temperate regions viaKandla Port

cubic metresAsh 2506Beech 27612Cedar 1263Cherry 82Chestnut 72Hickory 808

Poplar 4483Maple 2524Oak (whit e ) 2036Red Oak 128Sycamore 484Walnut 1286Willow 83

43367

Log auctions suspended with onset of monsoonIn the last phase of log sales in Western Indian timberdepots, approximately 12,200 cubic meters of Teak and

other hardwoods were sold.

The monsoon has now arrived in this region and the nextseries of auctions will start from October when themonsoon should be over. Central Indian depots will haveone more round of sales of Teak logs before auctions arealso suspended.

Teak and hardwood log prices continue upward trendDemand was buoyant at the W. Indian depots and theprices achieved above previous levels.

Shipbuilding quality Teak lots have fetched Rs.2200~2400plus per cubic foot, good quality sawing grade was tradedat Rs.2000 per cubic foot, medium quality saw logsfetched Rs.1700~1800 per cubic foot and average qualitylogs changed hands at around Rs.1500 per cubic foot.

Demand for Haldu ( Adina cordifolia ) Laurel ( Terminaliatomentosa ) and other hardwood logs has also been firmand prices were in the region of Rs.500~600 per cubic footfor good quality logs, Rs.400 for medium quality andaround Rs.300 per cubic foot for average quality logs.

During the monsoon season in India the industry becomesmore dependant on imported logs.

Low cost homes from TataMedia reports say that the Tata group will beginconstruction of a new style low cost house which can beerected over seven days and will cost only Euro 500.

Prototypes are currently being tested and the homes couldbe available next year. It is well known that in rural areasmillions of homes are needed. The company also has plans

for a larger and slightly expensive home.Imported Plantation Teak Prices (CnF)

Tanzania Teak sawnCte d'Ivoire logsPNG logsEl-Salvador logsGuatemala logsNigeria squaresGhana logsGuyana logsBenin logsBenin sawnBrazil squaresBurkina Faso logs

Columbia logsTogo logsEcuador squaresCosta Rica logsPanama logsSudan logsVenezuela logs

US$ per m 3

450-800

550-850500-700475-550400-500375-475350-650 350-450500-650475-600500-600 350-450

400-600350-500450-700350-600350-450

500-800 460-500

Variations exist based on lengths and average girths of logs in a parcel.Prices also vary with measurement allowances given for bark and sap indifferent countries of origin.

Demand from Europe, USA and Middle East for teak andother hardwoods remains steady.


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Domestic Ex-mill Sawnwood Prices for Myanmar TeakSawnwood (Ex-mill)Myanmar Teak (AD)

Export Grade F.E.Q.Plantation Teak A gradePlantation Teak B gradePlantation Teak C grade

Rs. per ft 3

4000-95003000-3800 2500-28001800-2000

Domestic Ex-mill Sawnwood Prices for imported timbers

Sawnwood, (Ex-mill) (AD)MerbauBalauKapurRed MerantiBilingaRadiata Pine (AD)

Rs. per ft3

145015501000925750

425-475Sawnwood, (Ex-warehouse) (KD)BeechSycamoreWhite OakAmerican WalnutHemlock clear gradeHemlock AB gradeWestern Red CedarDouglas fir

Rs. Per ft 3 12001200150021501000850

13501000

Domestic demand for plywood is firm.

Domestic Ex-warehouse Prices for Imported PlywoodPlywood, (Ex-warehouse) (MR Quality)4 mm6 mm12 mm15 mm18 mm

Rs. per sq.ft36.2551.0066.5079.6095.00

Domestic Ex-warehouse Prices for Locally ManufacturedPlywood

Locally ManufacturedPlywood Commercial

Grade

Rs. per sq.ft

4mm6mm8mm12mm19mm

5mm Flexible ply

RubberwoodRs.13.00Rs.19.00

Rs.24.50 Rs.29.00 RS.40.00

Rs.24.00

HardwoodRs.22.50Rs.32.60Rs.36.40Rs.39.00Rs.52.50

Report from Brazil

Brazilian Real continues to appreciate

Prices for wood products in the domestic market in localcurrency remain relatively stable and are unchanged overthe past month but when prices are converted to USdollars there was an average increase of around 3% due tothe appreciation of the Brazilian currency against the U.S.dollar.

Interest rates rise in face of inflationThe official inflation rate measured by the BrazilianNational Consumer Price Index (IPCA) decelerated to just0.15% in June. In May, the IPCA rose 0.47%. Over thepast 12 months, however, the accumulated rate amountedto 6.7%, well above the upper limit of 6.5% for 2011set by

the Central Bank.

The Monetary Policy Committee (Copom) raised theprime interest rate (Selic) by 0.25 percentage point to atotal of 12.50% per year. The next Monetary PolicyCommittee meeting is scheduled for late August.

Timber is Legal programme celebrates two years ofoperationThe programme Madeira Legal (Timber is Legal)which was launched in 2009 is an initiative that bringstogether the Union of Construction Industry of GreatStructures of State of So Paulo (SindusCon-SP), WWF-Brazil, the Sao Paulo State Government and the Sao PauloCity Hall, as well as 19 public bodies and privatecompanies.

The city of Sao Paulo was the first municipality to join theFriends of the Amazon City Program as early as 2005.Since then, all public construction in the city uses onlyverified legal timber. The city also pioneered therequirement for verification of the legal origin of timberused in furniture provided to City hall.

The support of the construction sector in Sao Paulo hasbeen essential in encouraging the use of verified legal orcertified timber as it is estimated that of the timber used instate construction some 15% is from the Amazon.

Timber identification and monitoring databaseThe Mato Grosso Institute of Agricultural Economics(IMEA), together with research teams from the ForestBase Data Platform project, coordinated by the Center of Timber Producer and Exporter Industries of Mato Grosso(Cipem), have started forest and timber surveys to collectdata for a new database that will strengthen the capacityfor overseeing the timber sector in the state.

About 500 companies out of a total of 1,680 in the regionas well as regulatory institutions such as the Secretariat of the Environment (SEMA), the Secretariat of Finance(SEFAZ), and the Brazilian Institute of Environment andRenewable Natural Resources (IBAMA) will be surveyed.

The methodology to be used in Mato Grosso will bepresented for future application in the state of Amazonasand in other states in the North of the country.

Pine sawnwood the only bright spot in Brazils Juneexport earningsIn June 2011, the value of wood product exports (exceptpulp and paper) fell 1.4% compared to values in June2010, from US$ 206.2 million to US$ 203.3 million.

However, pine sawnwood exports increased 19.5% invalue in June 2011 compared to levels in June 2010,

jumping from US$ 12.8 million to US$ 15.3 million. Interms of volume, exports increased 17.3%, from 55,500cu.m to 65,100 cu.m over the period.


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Double digit declines in earnings from plywood,sawnwood and furnitureExports of tropical sawnwood fell both in volume and invalue, from 38,500 cu.m in June 2010 to 33,900 cu.m inJune 2011 and from US$ 17.9 million to US$ 16.7 million,during the same period. This equates to a 7% decline invalue and a 12% decline in volume.

Pine plywood exports fell 29% in value in June 2011compared to June 2010, from US$ 36.5 million to US$26.0 million. In volume, the decline was a massive 33%during the same period, from 97,600 cu.m to 65,100 cu.m.

Exports of tropical plywood also fell from 8,700 cu.m inJune 2010 to 6,800 cu.m in June 2011 and this represents a22% decline. In terms of value a 16% drop was observed,from US$ 4.9 million to US$ 4.1 million.

Wooden furniture export dropped from US$ 46.4 millionin June 2010 to US$ 38.5 million in June 2011,representing a 17% decline.

Increasing domestic and export demand for legaltimberThe United States and European countries require roof of the legal origin of wood products imported. In 2009, NorthAmerican and Europe accounted for about 70% of theBrazilian wood product exports. Moreover, domesticconsumers who consume about 80%of the timber from theAmazon now show signs of increasing awareness aboutthe consumption of legal timber.

These developments have acted as a stimulus for theproduction of verified legal tropical timber in the country.Companies with forest concessions in publicly ownedforest must produce timber in a sustainable manner.Estimates by the Brazilian Forest Service show that 10million hectares of public forests in National Forests couldmeet 20% of the worldwide demand for tropical timber.

Fall in furniture exports from Santa CatarinaAccording to the Santa Catarina Industry Federation(FIESC), furniture exports in the state fell 19.7% in thefirst half of 2011, compared to the same period of lastyear.

According to the Construction and Furniture IndustryUnion of Rio Negrinho (Sindicom), the unfavourableexchange rate has significantly reduced the exportcompetitiveness of companies in foreign markets.

Despite gains in productivity and cost savings the sectorlacks competitiveness as result of the continuousappreciation of the Brazilian Real.

Moreover, according to the Union furniture designs arecommonly provided to Brazilian manufacturers by buyersin each export market and this trend has limited the designcapacity of the Brazilian manufacturer.

Consequently, Brazilian furniture makers have difficultiesin reorienting products to different export markets or evento the domestic market.

To overcome this analysts point out that domesticcompanies need to invest in research and development of new designs and new products.

Domestic Log PricesBrazilian logs, mill yard, domesticIpJatoba

GuariubaMescla (white virola)

US$ per m 3 172 124

82 89

Export Sawnwood Prices Sawnwood , Belem/Paranagua Ports, FOB

Jatoba Green (dressed)Cambara KDAsian Market (green) Guariuba

Angelim pedraMandioqueira

Pine (AD)

US$ per m 3

900 524 284687

252 213

Domestic Sawnwood Prices Brazil sawnwood, domestic (Green)Northern Mills (ex-mill) Ip

JatobaSouthern Mills (ex-mill) Eucalyptus (AD) Pine (KD) 1st grade

US$ per m 3 862

647 222 274

Export Veneer PricesVeneer, Export (Belem/Paranagua Ports) FOBWhite Virola Face 2.5mmPine Veneer (C/D)

US$ per m 3 303 210

Domestic Veneer PricesRotary cut Veneer, domestic US$ per m 3

(ex-mill Northern Mill)White Virola

Face300

Core248

Export Plywood Prices Plywood, FOBWhite Virola (US Market)

5.2mm OV2 (MR)15mm BB/CC (MR)

White Virola (Caribbean market)4mm BB/CC (MR)12mm BB/CC (MR)

US$ per m 3

454 388

533426

Pine Plywood EU market, FOB9mm C/CC (WBP)15mm C/CC (WBP)18mm C/CC (WBP)

US$ per m 3 293 273 260

Domestic Plywood Prices Plywood, domestic (ex-mill Southern mill)Grade MR (B/BB) White Virola 4mm

White Virola 15mm

US$ per m 3 1027750

Domestic prices include taxes and may be subject to discounts.

Export Prices For Other Panel Products Belem/Paranagua Ports, FOBBlockboard Pine 18mm 5 ply (B/C)

Domestic Prices, Ex-mill Southern RegionBlockboard White Virola faced 15mm Particleboard 15mm

US$ per m 3 316

653 431

Export Prices For Added Value Products FOB Belem/Paranagua PortsEdge Glued Pine Panel

Korean market (1st Grade)US Market

Decking Boards CambaraIp

US$ per m 3

638 502

639 1,737


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detailing the best practices that were identified forconditions in Guyana.

The GFC says that with the completion of the secondreview process the draft will be sent for Peer reviewboth locally and internationally. After this process work will move to national consultations on training and

implementation.Export Log Prices

SQ - $ Avg unit value per m 3 Std Fair Small

Logs, FOB Georgetown

Greenheart*PurpleheartMora

-200-290

160

-170-280115-150

-150-270110-140

*Small SQ is used for piling in the USA and EU. Price depends on length.In the case of no price indication, there is no reported export during theperiod under review.

Export Plywood PricesPlywood, FOB Georgetown PortBaromalli BB/CC 5.5mm

12mmUtility 5.5mm12mm

$ Avg unit val. per m 3

No export

490-600

In the case of no price indication, there is no reported export during theperiod under review.

Export Sawnwood PricesSawnwood, FOB Georgetown $ Avg unit val. per m 3

EU and US marketsGreenheart Prime

StandardSelectSound

Merchantable

Purpleheart Prime

StandardSelectSoundMerchantable

Mora PrimeSelectSoundMerchantable

Undressed--

575-1,018 742-954 500-806

-

-650 600

500

-500

- 400

Dressed-

650-890

-

742-1,060

In the case of no price indication, there is no reported export during theperiod under review.

Report from Japan

Seihoku plywood production recoveringSeihoku's Ishinomaki plywood plants sustainedconsiderable damage during the March earthquake andtsunami but clearing of debris and repairs to the machineryis progressing well say the Japan Lumber Reports (JLR).

Seihoku plans to dispatch the first structural softwoodplywood this month end and the other Seihoku plant willbegin production in late August. By late October, bothplants will be producing one million sheets a monthreports the JLR.

The rotary lathe in the third plant was not badly damagedso veneer production is underway. Drying is carried out inthe third plant and gluing, pressing and finish are done atthe number one plant.

The company reportedly plans to produce 150,000 sheetsthis month and the target is to make 400,000 sheets inAugust and 600,000 sheets in September.

Flood of import disrupts plywood marketIn Osaka inventories of imported 12 mm plywood havegrown dramatically due to the arrival of imports, ordersfor which were rushed to suppliers imediately after theMarch earthquake.

In the port of Senboku, south of Osaka, more than fiveships had to wait off-shore as they could not unload. Someof these vessels had been re-directed from the original portof destination as they could not unload as planned due to alack of warehouse capacity.

Traders are reporting that the plywood market continues tobe depressed and that wholesalers and retailers arecarrying considerable inventories.

The price of 12mm structural panels dropped by Yen 350per sheet from the peak of Yen 1,550 to about Yen 1,200delivered.

Concrete formboard panels (JAS/F4star) prices are Yen1,150 and coated concrete formboard prices are at Yen1,250 yen per sheet. Both are down by more than Yen 100per sheet from levels in June.

June orders for houses builders remain flatMajor house builders are reporting that June demand wasabout the same as June last year.

Sekisui House, the largest builder in Japan, reported thatorders for detached units in June were 15% down fromJune last year, the first decline in 22 months. However,orders for apartments were up by 22 %, but orders forunits built for sale dropped by 8%. Overall, the housingsector business, including renovation works, was 6% up.

Daiwa House reported a modest increase of customordered detached units, the first increase in four monthsbut at only plus 1% the figures are barely changed fromone year ago. Orders for units built for sale were up by1% while the overall sales of properties were up by 4%.

Sarawak log producers maintain firm stand on pricesWhen the rain season arrived in Sarawak logging wascurtailed and log prices increased. Further increases werecaused but a surge in demand after the March earthquakein Japan.

The news in June this year was that log buyers in bothIndia and China had begun to slow purchases of logs asprices were seen spiralling beyond their capacity to absorbthe increases. At the same time plywood mills in Sarawak also reduced purchases of logs after the surge in demandfrom plywood importers in Japan eased.

The JLR is saying that Japanese log buyers continue torequest a reduction in log prices but that the suppliers are


13/22


ignoring these requests. In particular, prices for regularquality logs remain at peak levels.

The latest indications for the JLR is that Sarawak merantiregular prices are US$330-350 per cu.m FOB, just US$5lower than late June. Small meranti prices are US$300-315 and Super small prices are US$290-305, US$10

down.In the Sarawak domestic market prices for mixed lighthardwoods began to weaken but the plywood mills startedto actively purchase these logs to support the pricesfearing there would be pressure to reduce plywood pricesif log cost were seen to drop.

Prices for Sabah mixed serayah are reportedly steady atabout US$350 per cu.m FOB with active local demand.

In Japan, importers are asking 10,000 yen per koku CIFfor meranti regular logs but plywood mills are strongly

resisting because of depressed plywood market.Rains in PNG hinder log deliveries to ChinaThe weather in PNG and the Solomon Island is reportedlyvery bad at present with heavy rain affecting harvesting.The main buyer of logs, especially calophyllum, fromthese two suppliers is China and importers there have beenplacing more orders after they decided prices for logs fromSarawak were too high.

New berths at Iwakuni portMuronoki wharf at the port of Iwakuni (Yamaguchiprefecture), west of Hiroshima, is one of the major logdischarge ports in western Japan. Until recently the porthad one berth of draft of 10 metres and two berths with adraft of 5.5 metres.

In order to attract larger vessels to the port work wasundertaken to extend the length of the wharf and to dredgethe port to provide a deeper draft.

One new berth has a 12 metre draft and a wharf of 240metres and two others have a 7.5 metre draft and a wharf length of 260 meters.

With 12 metres of draft, 30,000 ton class vessel can now

be handled. The cargo handling yard has also beenexpanded to 37,740 square metres.

Imported Log and Sawnwood PricesLogs for Ply Manufacture, CIFMeranti (Hill, Sarawak)

Medium MixedStandard MixedSmall Log (SM60%, SSM40%)

Taun, Calophyllum, others (PNG)Mixed light hardwood, G3/4 grade (PNG) Keruing MQ & up (Sarawak)Kapur MQ & up (Sarawak)

Yen per Koku(Koku=0.278 m 3)

9,3009,5009,4008,000

-12,50012,000

Logs for Sawmilling, CIF

Melapi (Sarawak) High SelectAgathis (Sarawak) High Select

Yen per m 3

210,000-

Lumber, FOBWhite Seraya (Sabah) 24x150mm, 4m, Grade 1Mixed Seraya, Sangi 24x48mm, 1.8-4m, S2S

Yen per m 3 150,00060,000

Wholesale Plywood Prices (Tokyo)

Report from China

New US Emission standards impact Chinese wood-based panel industryThe US Formaldehyde Standards for Composite WoodProducts Act was signed into law on 7 July 2010 and cameinto effect on 3 January 2011. Basically this adoptsstandards established by the California Air ResourcesBoard (CARB). This act limits formaldehyde emission to alevel far below that of China and many other countries.

Products covered by this act include hardwood plywood,MDF, particleboard and finished goods containing theseproducts; it excludes hardboard, structural plywood,structural panels, structural composite lumber, oriented

strandboard, prefabricated wood, glue laminated lumber,finger jointed lumber, wood packaging and compositewood products.

The act clearly defines emission limits of formaldehydewhich are apparently lower than Chinese levels.

China is a major exporter of wood-based panel. In 2010,output of wood-based panels amounted to 154 millioncubic metres (of which, output of plywood was 71.4million cubic metres, accounting for 46.5% andfiberboard, 43.5 million cubic metres, amounting to28.4%).

Of the total plywood output, 10.6% or 7.55 million cubicmetres were exported and 5.6% or 1.93 million cubicmetres of fiberboard were also exported.

The timber industry in China says this act will have asevere negative effect on Chinas plywood sector,especially on the medium and small-sized companies.

Manufacturers say that to meet the new emission standardsproduction costs will rise as they will need to invest intraining, equipment and technological improvements.

The Secretary General of Chinas Technical Committee of Wood-based Panel Standardization suggested that sincethe United States is the largest market for Chinese

Indonesian & Malaysian Plywood Size (mm)

2.4mm (thin plywood, F 4star, type 2 ) 920 X 1830 380-410 380-410

12mm for foundation (F 4star, special) 910 X 1820 1300 1250

12mm concrete-form ply (JAS) 900 X 1800 1220 1150

12mm coated concrete-form ply (JAS) 900 X 1800 1300 1250

11.5mm flooring board 945 X 1840 1400 1500

3.6mm baseboard for overlays (OVL) 1220 x 2440 900 980

5.2mm (med. Thickness, F 4star, type 2) 910 X 1820 640-720 640-720

June July

( per sheet)

3 .7mm (med. Thickness , F 4s ta r, type2) 910 X 1820 540-600 540-600


14/22


furniture and plywood (one third of Chinas furniture andone fourth of its plywood is exported to USA), Chinashould upgrade its plywood enterprises.

Enterprises should be encouraged to adopt newtechnologies and improve product quality so as tomaintain its share of the US panel and wood products

market..Analysts report that at the end of June more than 400Chinese enterprises had achieved California CARBcertification for products destined for the United States.

Policy changes to economise on wood useThe National Development and Reform Commission has

just released the latest Catalogue Guiding Adjustment of Industrial Structure detailing the scope of wood-savingproducts and processes which will attract governmentassistance.

The previous policy document included investments suchas development of products from small diameter logs andresidues, technical development of composite woodmaterials, production and integrated utilization of bamboo-based engineering materials and these have beenmaintained in the latest document.

Some new items have been added such as the technicaldevelopment of structural wood-based panel, productionand integrated utilization of composite wood material,production of plastic and wood composite materials,recycling wood residues and economizing on wood use.

The document identifies some industries which are to bediscouraged and these include the production of disposablewood products (including disposable chopsticks) andwood packaging from high value timber as well as woodand bamboo process which are not effectively integrated.

Timber supply from Myanmar to China stops due toarmed conflictAccording to timber traders, the road on the China-Myanmar border was closed in June due to armed conflictin the area.

Consequently, timber from Myanmar cannot betransported to China so traders are facing rapid depletionof stocks of timbers from Myanmar. Analysts say that thesecurity situation is bad and that it is likely that the roadon the China-Myanmar frontier will not be open untilOctober.

Logs imports through Fujian Putian PortAccording to Fujian Putian Entry-Exit Inspection andQuarantine Bureau, in the first half of 2011 logs importsthrough Putian Port were 118 900 cubic metres valued atUS$18.52 million, up 58 percent in volume and 64 percentin value from the same period in 2010. Imported logsthrough the port are mainly from Canada and Australia.

The log and timber import business between Canada andChina improved after an agreement on hygiene

requirements for Canadian BC Province logs to China wassigned since July 2010.Guangzhou City Imported Timber Wholesale MarketLogs

Lauan (50-60cm)Kapur (up to 79cm)Merbau 6m, (up to 79cm)

TeakWenge

SawnwoodTeak sawn grade A (Africa)US Maple 2" KDUS Cherry 2"US Walnut 2OkoumeSapele

Yuan per m32200-24003100-35003500-400011000-130005800-6500

96007500-1000010000-1300014000-160004500-50006000-6400

Shanghai Furen Imported Timber Wholesale MarketLogsTeak (Myanmar, all lengths)

SawnwoodBeech KD Grade AUS Cherry, 25mmUS Red Oak, 50mmSapele 50mm FAS (Congo)

KD ( FAS)KD (grade A)

Yuan per m37500-8500

5600-57009500-100006500-7000

6500-68005700-5800

Hangzhou ImportedTimber Wholesale MarketLogsAsh 4m, 30cm diam.Linden 4m, 26cm diam.

SawnwoodBeech EuropeBlack walnut North AmericaTeak MyanmarRed oak North America

Alder MyanmarSapele Africa

PlywoodRed beech 4x8x3 mmBlack walnut 4x8x3 mmTeak 4x8x3 mm

Yuan per m32900-41002000-3100

3000-750012000-175009000-180008500-15000

4500-76005000-6200

50-6550-9565-130

Shandong De Zhou Imported Timber Wholesale MarketLogsLarch 6m, 24-28cm diam.White Pine 6m, 24-28cm diam.Korean Pine 4m, 30cm diam.

6m, 30cm diam.Mongolian ScotsPine 6m, 30cm diam.

Yuan per m318001750--

1580

Hebei Shijiangzhuang Imported Timber WholesaleMarketLogsKorean Pine 4m, 38cm+ diamMongolian Scots Pine 4m, 30cm diam.

6m, 30cm+ diam.SawnwoodMongolian Scots Pine 4m, 5-6cm thick

4m,1 0cm thick

Yuan per m3180017001750

17001750

Wenzhou Imported Timber Wholesale MarketLogsWenge (Africa)Plantation Teak (Africa)MerbauSapele

Plywood

Yuan per m34500-51002100-25003500-50003200-3700

Yuan per piece


15/22


Red beech 4x8x3 mmBlack walnut 4x8x3 mmTeak 4x8x3 mm

40-8040-8545-110

Report from Europe

European domestic hardwood production rebounds

Data from the UNECE Timber Committee indicates thathardwood production across the European sub-regionrebounded during 2010 (the UNECE European sub-regionincludes all countries within the continent of Europe plusTurkey but excluding Russia).

Following an 18% decline in hardwood saw and veneerlog production in the region between 2007 and 2009 to29.7 million cu.m, production rebounded by 12% to 33.2million cu.m in 2010.

Significant increases in hardwood log production wererecorded in Romania, Germany, Turkey, and Latvia during

2010. 26.2 million cu.m (78%) of total Europeanhardwood log production during 2010 was in EUcountries.

Turkey was the largest producer of sawn hardwood inEuropeEuropean production of sawn hardwood followed the samegeneral trend. A 26% fall in production between 2007 and2009 was followed by a robust 9% rebound during 2010(Chart 2). Significant gains in production were in Turkey(8.8%), Germany (6.6%) and Croatia (5.6%).

S awn hardwood production in E urope

2006 2010

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2006 2007 2008 2009 2010

1 0 0 0 m 3

Other

Germany

France

R omania

Turkey

Source: UNECE Timber CommitteeNote: The UNECE Europe region includes all countries in the continent of Europe plus Turkey but excluding Russia.

Turkey was the largest producer of sawn hardwood inEurope in 2010. However most sawn hardwood in Turkeyis produced from low-grade domestic timber, as well assmall-dimension plantation logs and is destined for thepallet and packaging industry with only a small proportionearmarked for export.

Germany, France and Romania remain by far the dominantproducers of higher grades of European sawn hardwood.

The rising log harvest in 2010, combined with anunderlying lack of consumption, has meant that there havebeen no major hardwood log shortages in Europe in recenttimes. Supplies of beech logs have generally beenadequate.

Short-term concerns have occasionally arisen over

supplies of oak logs, particularly with rising demand inexport markets, notably from China, and following severewinter weather in both 2009 and 2010 which brieflycurtailed harvesting levels.

However oak log supply problems had eased greatly bythe end of the first quarter of 2011 as weather conditionsimproved and log exporters were less active at French andGerman auction sales.

European domestic production more dominantWithin the EU-25 group of countries, apparentconsumption of sawn hardwood increased by 9.4% during2010, from 8.7 to 9.6 million cu.m.

While a significant gain, consumption levels were stillwell down on levels of over 13 million cu.m whichprevailed prior to the economic crises. The overall figurealso hides important changes in sources of supply anddemand.

EU-25 sawn hardwood balance 2006-2010(1000 cu.m)

2006 2007 2008 2009 2010

Domes t i c P roduc t ion 9,291 9,253 8,136 6,765 7,559

Imports 4,778 4,870 3,904 2,510 2,688

o f which Tro pical 2,473 2,375 1,873 1,138 1,201

o f whichTem perate 2,305 2,495 2,031 1,372 1,486

Exports 745 760 634 536 685

Apparent consumption 13,324 13,363 11,406 8,739 9,562 Note: EU-25 includes all members of the EU except Romania and Bulgaria whichacceded to the EU in January 2008Source: Production data derived from UNECE Timber Committee, import andexport data from Forest Industries Intelligence Ltd and BTS Ltd

Domestic industry weathered the crisis better thanexternal suppliers .While all wood suppliers into the EU market sufferedseverely during the recession, the signs are that thedomestic industry weathered the storm better than mostexternal suppliers. During the period 2006 to 2010, theshare of domestic hardwood sawn lumber in overallsupply to the EU-25 group of countries increased from66% to 74%.

The share of non-EU temperate hardwood suppliersdeclined from 16% to 15%. However the major loser inthis process has been tropical hardwood which saw shareof European sawn hardwood supply fall from 18% to 12%in the four year period.


16/22


Percent share of sawn hardwood supply to the E U 25 2006 to 2010

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010

Production Temperate imports Tropical imports

Source: Forest Industries Intelligence Ltd and BTS Ltd

While all major tropical supply countries experiencedsome slippage in European market share for sawnhardwood, the trend was particularly pronounced for

Brazil (share of EU supply falling from 4.1% to 2.9%)Ivory Coast (share falling from 2% to 1%), and Ghana(share falling from 0.8% to 0.4%).

Major shift in EU sawn hardwood supplyA number of factors have played a role in this major shiftin European sawn hardwood supply including:

increased diversion of global hardwood supplyaway from Europe to China and emergingmarkets;

a move to smaller stock-holdings and just-in-timeordering during the credit crunch which hastended to favour more readily available productswith shorter lead times;

the willingness of European domestic suppliers todeliver to the precise specifications of Europeanmanufacturers;

the willingness of the European state forest sectorto continue to harvest hardwood logs during therecession despite relatively low log prices;

the continuing strong fashion for European oak inthe region;

the development of an expanding range of treatment techniques allowing use of Europeanhardwoods for a much wider range of looks andapplications;

and environmental concerns which have benefited

FSC and PEFC certified hardwoods, the majority

of which derive from Europe.

Low hardwood demand from cabinet, furniture andparquet industriesOn the demand side, European consumption of sawnhardwood recovered quite strongly in France, Germany,and Sweden during 2010 and early 2011. Howeverconsumption has remained at historically low levels inmany European markets, notably Spain, Portugal, andItaly due to continuing low demand in the cabinet,furniture and parquet industries.

The strong euro has meant that Europes importantfurniture sector is coming under particularly intensepressure from competitors in Asia.

Exports of EU hardwoods recoveringExport markets for European sawn hardwood, particularlyoak and ash, in China and Vietnam have also beenrecovering. Between 2009 and 2010, EU-25 sawnhardwood exports to China increased from 115,000 cu.mto 205,000 cu.m, while exports to Vietnam increased from21,000 cu.m to 40,000 cu.m.

In contrast, European sawn hardwood exports to theMiddle East and North Africa have been declining. Recentpolitical upheaval in this region has resulted in decliningdemand, particularly for beech in Egypt, Jordan, Syria,and Tunisia.

Despite pockets of poor demand, according to the UNECETimber Committee, reports from the European hardwoodsawmilling sector have been generally positive in 2011and there are expectations that overall sales this year maybe 15% to 20% higher than in 2010.

Tropical log imports still close to recession levelsThe EU-25 imported 93,400 cu.m of tropical hardwoodlogs during the first quarter of 2011, a 6% increase on theprevious quarter, but 1% down on the same quarter in2010.

Following the dramatic decline in imports from over200,000 cu.m in the first quarter of 2008 to a low of 88,000 cu.m in the third quarter of 2009, quarterly importshave stabilised at this lower level.

In addition to the recession, a major factor driving therecent decline in log imports was Gabons imposition of alog export ban from May 2010 onwards. Rising logimports from Cameroon, Democratic Republic of Congo,Republic of Congo, Equatorial Guinea and Liberia haveonly partially offset the decline in availability from Gabon.


17/22


E U 25 imports of hardwood logs from L e s s Developed C ountries 2008 2011 Q1

0.0

50.0

100.0

150.0

200.0

250.0

Q T R 1 0 8

Q T R 2 0 8

Q T R 3 0 8

Q T R 4 0 8

Q T R 1 0 9

Q T R 2 0 9

Q T R 3 0 9

Q T R 4 0 9

Q T R 1 1 0

Q T R 2 1 0

Q T R 3 1 0

Q T R 4 1 0

Q T R 1 1 1

1 0 0 0 m 3

O T H E R

EQ . GUINEA

LIBERIA

C AR

C O N G O R E P.

C O N G O DR .

CAMEROON

G A B O N


Rise in EU sawn hardwood imports driven bytemperate speciesThe EU-25 imported 702,000 cu.m of sawn hardwoodduring the first quarter of 2011, a 5% increase on theprevious quarter and a 6% increase on the same quarter in2010.

However tropical sawn hardwood imports of 293,000 cu.mduring the first quarter of 2011 were 1% down on theprevious quarter and only 2% up on the same quarter in2010.

This compares to temperate hardwood sawn imports of 409,000 cu.m during the first quarter of 2011, up 10% onthe previous quarter and up 9% on the same quarter in2011. Most recent gains in EU-25 imports of temperatehardwoods have been made by Croatia and Ukraine.

Recent news is not all bad for tropical hardwoods.Brazilian sawn hardwood has been regaining some of theground lost in the European market, particularly in Franceand Belgium.

In the first quarter of 2011, EU-25 imports of sawnhardwood from Brazil were 56,000 cu.m, up 22% on theprevious quarter. Meanwhile European imports fromCameroon started 2011 much more strongly than theprevious year, with larger volumes arriving in Belgium,Netherlands, UK, Ireland and Italy.

Total EU-25 imports of sawn hardwood from Cameroonreached 92,000 cu.m in the first 3 months of 2011, up 14%on the same period in 2010.

These gains helped offset relatively weak first quarterimports of sawn hardwood from Malaysia (58,000 cu.m)and Ivory Coast (24,000 cu.m).

E U 25 imports of sawn hardwood 2008 Qtr1 2011

0

200

400

600

800

1000

1200

Q T R

1 0 8

Q T R

2 0 8

Q T R

3 0 8

Q T R

4 0 8

Q T R

1 0 9

Q T R

2 0 9

Q T R

3 0 9

Q T R

4 0 9

Q T R

1 1 0

Q T R

2 1 0

Q T R

3 1 0

Q T R

4 1 0

Q T R

1 1 1

1 0 0 0 m 3

O T H E R T E M P E R AT E

U K R A I N E

C R O AT I A

U.S .A.

O T H E R T R O P I C A L

I V O RY C O A S T

B R A Z I L

MALAYS IA

C A M E R O O N


EU hardwood veneer imports weaken againThe EU-25 imported 118,000 cu.m of hardwood veneerduring the first quarter of 2011, an 8% decline on theprevious quarter and a 4% decline on the same quarter in2010 (Chart 6).

Tropical hardwood veneer imports of 69,000 cu.m duringthe first quarter of 2011 were 10% down on the previousquarter and 4% down on the same quarter in 2010. Thiscompares to temperate hardwood veneer imports of 60,000cu.m during the first quarter of 2011, down 2% on theprevious quarter and 3% on the same quarter in 2011.

The continuing weakness of the European veneer trade isparticularly troubling considering the wide range of end-use sectors for hardwood veneers, the resources committedto boosting the share of real wood by large veneermanufacturers, and the decline in Europes tropicalhardwood log imports.

European plywood manufacturers might reasonably havebeen expected to have offset the decline in availability of okoume logs by importing more rotary veneer fromGabon.

However European imports of this commodity haveremained low as manufacturers have been struggling in theface of tight margins and rising competition from a rangeof lower-priced panels. European imports of thicker rotaryveneer for flooring are also depressed as Europeanflooring output is low due to weak construction growthand competition from artificial surfaces.

The weak construction sector has also hit mainstreammarkets for sliced veneer, including doors, panels andfurniture. The latter sector is struggling in the face of stiff competition from Chinese manufacturers.

At the same time, real wood veneer has continued to loseout to artificial surfaces. As demand for sliced veneer hasbeen increasingly marginalised in mainstream markets,demand is now focusing more on higher value nichemarkets -including high end interior fittings, yachts, andthe car industry - which generate more value but absorblower volumes.


18/22


Netherlands Imported Sawnwood PricesFOB (Rotterdam)Sapele KDIroko KDSipo KDDRM Bukit KDDRM Seraya KDDRM Meranti KD Seraya MTCC cert.Merbau KD

Sapupira (non FSC) KDSapupira (FSC) KD

Anti-slip decking AD C&F RotterdamSelangan batu

US$ per m 3 943

1220 1144

968975 996

1257

989

1624

1681

UK Imported Log PricesFOB plus commissionN'Gollon (khaya) 70cm+ LM-CAyous (wawa) 80cm+ LM-CSapele 80cm+ LM-CIroko 80cm+ LM-CAfrican Walnut 80cm+ LM-C

per m 3 350-380250-270350-380 410-480340-370

UK Imported Sawnwood Prices FOB plus CommissionFramire FAS 25mmSipo FAS 25mmSapele FAS 25mmIroko FAS 25mmWawa FAS25mm

CIF plus CommissionTulipwood FAS 25mmMeranti Tembaga Sel/Btr (KD 2boards)Balau/Bangkirai DeckingWhite Oak

GB Pounds per m 3 470-495680-710560-575 720-745 275-295

250-270590-600 1050-1100 480-500

UK Imported Plywood and MDF Prices Plywood Panels 8x4, CIFBrazilian WBP BB/CC 6mmMalaysian WBP BB/CC 6mmMALAYSIA MTCS/PEFC trop hardface, pine core* 18mmChina (hardwood face, eucalyptuscore) 18mmChina (tropical hardwood face, poplarcore) 18mm

US$ per m 3 600-620660-685520-580

395-410

375-395

* MTCS/PEFC certified plywood is now becoming more widely available than equivalentFSC certified product from Malaysia

Report from North America

Year-to-date tropical sawnwood imports are up 13%US imports of sawn tropical hardwood continue to declinefrom the higher levels seen at the end of last year. Thelatest data is for May and these show that imports were15,197 cu.m., down 5% from April, but on a year-to-datebasis imports are still up 13% from 2010 levels.

Imports of balsa were 4,808 cu.m. (-10% year-to-date), ipe1,756 cu.m. (+37% year-to-date), keruing 1,044 cu.m.(+157% year-to-date), acajou dAfrique 1,159 cu.m. (-10% year-to-date), mahogany 601 cu.m. (-15% year-to-date), and virola 387 cu.m. (+105% year-to-date).

Imports from Ecuador, the largest source of importedtropical sawnwood, rose by 20% to 4,843 cu.m. in May.Balsa accounts for almost all of Ecuadors sawnwoodexports to the US. Imports from Brazil were 2,563 cu.m.,with ipe accounting for 1,610 cu.m.

Imports from Malaysia declined from the previous monthto 1,560 cu.m. because keruing imports fell 44% to 999cu.m.

US Tropical Sawn Hardwood ImportsMonthly Import Volumes by Country of Origin

0

5,000

10,000

15,000

20,000

25,000

M a y - 1

0

J u n - 1

0

J u

l - 1 0

A u g - 1

0

S e p - 1

0

O c t - 1

0

N o v - 1

0

D e c - 1

0

J a n - 1

1

F e b - 1

1

M a r - 1

1

A p r -

1 1

M a y - 1

1

V o

l u m e

i n c u . m .

All Other

Peru

Ghana

Cameroon

Malaysia

Brazil

Ecuador

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Sawnwood imports from Cameroon jumped by 55% fromApril to 1,697 cu.m. in May due to higher sapelli imports.

Monthly import volumes of key imported species bycountry of origin are shown in the chart below.

Drop in US hardwood plywood importsUS hardwood plywood imports dropped by 22% in Mayafter a brief surge in April. The US imported 194,525cu.m. of hardwood plywood in May 2011, up 13%compared to year-to-date May 2010.

China, Indonesia and Malaysia all exported less to the USin May, while Ecuador increased exports to 4,533 cu.m. (-2% year-to-date). Imports from China were 132,686 cu.m.(+47% year-to-date), from Indonesia 13,356 cu.m. (-25%

year-to-date), and from Malaysia 3,798 cu.m. (-59% year-to-date).

US Hardwood Plywood ImportsMonthly Import Volumes by Country of Origin

0

50

100

150

200

250

300

M a y -

1 0

J u n - 1

0

J u l - 1 0

A u g - 1

0

S e p - 1

0

O c t - 1

0

N o v -

1 0

D e c - 1

0

J a n - 1

1

F e b - 1

1

M a r -

1 1

A p r -

1 1

M a y -

1 1

V o

l u m e

i n c u . m .

All Other

Ecuador

Russia

Malaysia

Canada

Indonesia

China


`

Hardwood moulding imports from China rise againUS hardwood moulding imports declined by 9% toUS$17.0 million in May, ending the period of growth thatstarted in February. However, moulding imports are stillup 22% on a year-to-date basis.

Indonesia saw the largest increase in May, while Brazilremained the largest supplier to the US market at US$5.5million (+59% year-to-date). China is catching up toBrazil, with imports from China reaching US$5.1 millionin May (+3% year-to-date).


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US Hardwood Moulding ImportsMonthly Import Values by Country of Origin

0

5

10

15

20

25

M a y - 1

0

J u n - 1

0

J u

l - 1 0

A u g - 1

0

S e p - 1

0

O c t - 1

0

N o v -

1 0

D e c - 1

0

J a n - 1

1

F e

b - 1

1

M a r - 1

1

A p r -

1 1

M a y - 1

1

V a l u e

i n M i l l i o n

U S $

All Other

Peru

Italy

Indonesia

Malaysia

Canada

Brazil

China


The smaller moulding suppliers Mexico, Paraguay,Taiwan P.o.C and Bolivia have increased their share in theUS market since late 2010. Hardwood moulding importsfrom Malaysia were US$1.1 million (+54% year-to-date).

Malaysia largest supplier of hardwood flooring in May

Flooring imports continued to recover in May despite thepoor condition of the US housing market. The USimported US$1.9 million worth of hardwood flooring inMay, up just 2% from April but up 74% compared to year-to-date 2010.

In May Malaysia surpassed China as the US largestsource of hardwood flooring imports. Malaysia shippedUS$432,000 in May (+121% year-to-date), while Chinaexported US$387,000 (+62%).Imports from Brazil were US$265,000 (+39% year-to-

date) and from Indonesia US$59,000 (+168% year-to-date).

US GDP growth worse than previously projectedThe US Department of Commerce released revisions of past economic figures that revealed the US economyperformed even more poorly than previously thought.

Economic growth in the first quarter of 2011 had initiallybeen estimated at 1.9%, but it was revised down to just0.4%. Spending cuts of state and local governmentscontributed negatively to growth, more than offsetting thefederal stimulus.

GDP growth figures from 2007 to 2010 were also revised

and revealed that the recession was worse than economistshad thought. The US economy shrank by 3.5% in 2009instead of the previously stated 2.6%.

The worse than expected economic performance over thepast four years helps explain the persistently highunemployment figures. Federal policies to boost theeconomy have underestimated the extent of the recession.

Current plans to slash federal spending to reach a deal toraise the US governments debt limit may further slow thecountrys poor recovery from the recession.

Imported flooring set to expand market share in US

US demand for hard surface flooring is expected toincrease by 5.6% annually to 2015 according to the latestFreedonia market study on flooring (Hard SurfaceFlooring to 2015, published July 2011). US consumerscontinue to favour hard surface floors over carpets.

Laminate flooring in residential buildings will see the

strongest growth, followed by wood and tile flooring.Vinyl flooring currently accounts for the majority of thehard surface floors sold in the US, but market growth isforecast to be below that of laminates and wood.

Freedonia expects imports to capture a growing share of the US market, led by vinyl and tile flooring made inChina and Brazil, but also because of growing demand fortropical wood, bamboo and cork flooring.

Salvaged tropical logs held up by Canadian FoodInspection AgencyA shipment of logs salvaged from a river in Belize cannotbe released because the Canadian Food Inspection Agencyrequires fumigation with methyl bromide according toPostmedia News.

The owner of the logs, Canadian company WaterForest, isunable to carry out the treatment because Canada prohibitsthe manufacture and import of methyl bromide.

Methyl bromide is ozone-depleting and was supposed tobe phased out by 2005 in developed countries WaterForestfumigated the logs with another pesticide which would bean acceptable treatment for shipments to the US.

It is unclear whether the logs will be destroyed or shippedback to Belize or to the US if the fumigation with methylbromide is not carried out in Canada. The 4,300 cu.m.shipment includes species that are now protected byConvention on International Trade in Endangered Species.

US Imported Timber prices

Ipe (Brazil) Decking Premium Grade AD,1x6, FOB BelemIpe (Brazil) Decking Premium Grade AD,5/4x6, FOB BelemJatoba (Brazil) No.1 Common & Better AD,FOB BelemJatoba (Brazil) No.1 Common & Better KD,FOB BelemKhaya (Cte d'Ivoire) FAS KD, FOB AbidjanKhaya (Ghana) FAS KD, FOB TakoradiSapele (Cameroon) FAS AD, FOB DoualaSapele (Cameroon) 4/4 to 8/4 FAS KD,FOB Douala

May-11US$ per

cu.m2800

2900

-

-

775875740910

June-11US$ per

cu.m2800

2970

-

-

-875740910

Disclaimer: Though efforts have been made to keep prices near to accurate, these are published as a guide only.ITTO does not take responsibility for the accuracy of this information


20/22


Internet NewsBelow are web links to news items published by the press.These items do not necessarily reflect the views and policies of ITTO.

World production of furniture is worth about US$ 385billion. Key features of the last decade furniture scenariowere a vast increase of imports penetration in all majormarkets, large amounts of furniture imports particularly inthe US, Germany, France and the UK, and the very fastgrowth of exports from China. According to CSILestimates world trade of furniture would be likely to growin 2011 and in 2012, getting close to the pre-recessionlevel in 2011 and exceeding it in 2012.http://www.csilmilano.com/Market_Research.html

China has taken over from the US as the largest consumerof wood from British Columbia in Canada, according toForestry Research Associates (FRA). During May, the USbought 835,000 cubic meters of British Columbia timber,which was the largest amount, in terms of volume.However, in terms of value, China bought $122 millionworth of timber from the region, despite the volume onlytotalling 746,000 cubic meters.http://www.sbwire.com/press-releases/sbwire-101247.htm

China's government officials this month have focused onthe construction of affordable housing, underscoring theurgency to address the dire living needs of city dwellersamid rocketing property prices and high rental fees.China's affordable housing program includes government-subsidized low-rent housing for the most financiallychallenged residents, public rental houses for those

middle-income earners who cannot purchase a house incities, and upgrades of urban slums.http://news.xinhuanet.com/english2010/china/2011-07/22/c_131001004.htm

India will set up an environment regulator to bring in a"complete change" in the process of granting landclearances for industries. PM Manmohan Singh said theregulator would also ensure the compliance of "greennorms" by industry. India's environment ministry has beenoften embroiled in controversy over how to balancedevelopment with the preservation of the environment.This has led to the delay of a number of projects across the

country.http://www.bbc.co.uk/news/world-south-asia-14271439

Italy will sponsor a program worth US$4.3 million todevelop Vietnams garment, leather shoes and woodindustries, the United Nations Industrial DevelopmentOrganization (UNIDO) said recently. Businesses in thethree fields will be supported with investments in designtechnologies, product promotion, marketing campaignsand cost management systems.http://www.thanhniennews.com/2010/Pages/20110723153112.aspx

US new-home construction popped to a five-month high inJune, surprising economists and fueling hope that the long-struggling U.S. housing market could at last begin to addstrength to the economic recovery. Work started on629,000 houses in June, an increase of 15 percent fromMay and nearly 17 percent from the corresponding periodlast year, according to data released by the Commerce

Department. Economists had predicted 575,000 housingstarts for the month. All regions of the country Northeast, Midwest, South and West saw increases inhome-building activity, according to the data, and bothsingle-family and multi-family homes posted monthlyincreases in each region.http://www.washingtonpost.com/business/economy/housing-starts-surge-in-june/2011/07/19/gIQAvediOI_story.html

Timbers ability to fight global warming through its role inconstruction and design has been dealt a blow in theAustralian federal government's proposed carbon tax,according to a coalition of more than 80 forest scientists

and timber company representatives. The coalition, in aletter to the Climate Commission, referred to ''flaws,omissions and lost opportunities'' in looking at the bestway to use forests to reduce greenhouse gas emissions.http://www.smh.com.au/business/property/warning-of-pain-in-lumber-region-20110719-1hmys.html

Strong Chinese demand for logs has pushed the value of New Zealand's forestry exports to $4.4 billion for the yearending March 31 - up $800 million on the previous year.China imported 1.7 million cu m of New Zealand logs inthe March quarter, up 44.5 per cent on the same time theprevious year. Doube said India was also emerging as a

major destination, with its demand now approaching thatof Korea - New Zealand's second-largest log exportmarket.http://www.nzherald.co.nz/markets/news/article.cfm?c_id=62&objectid=10738063


21/22


Main US Dollar Exchange Rates

As of 29 th July 2011

Brazil Real 1.56

CFA countries CFA Franc 460China Yuan 6.444

EU Euro 0.6946India Rupee 44.035

Indonesia Rupiah 8502

Japan Yen 76.77Malaysia Ringgit 2.943

Peru New Sol 2.7395

UK Pound 0.6089South Korea Won 1053.55

Exchange rates index (Dec 2003=100)

70

75

80

85

90

95

100

105

110

115

120

125

130

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7

Euro Yen UK Pound

Jan 2007 to July 2011

50

60

70

80

90

100

110

120

130

140

150

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7

Brazilian real Indonesian rupiah

Jan 2007 to July 2011

Abbreviations and Equivalences

LM Loyale Merchant, a grade of log parcelQS Qualite Superieure

CI, CE, CS Supplimentaire

FOB Free-on-BoardCIF; CNF freight

KD; AD Kiln Dry; Air Dry

Boule boards from one log are bundled

BB/CC, etc. indicate face veneer, on the right backing

BF; MBF Board Foot; 1000 Board Feet

TEU Tw enty-foot equivalent unitHoppus ton 1.8 m 3

Koku 0.278 m 3 or 120 BF

SQ; SSQ Saw mill Quality; Select Sawmill Quality

FAS Saw nw ood Grade First and SecondGMS General Market Specif ic ations

GSP Guiding Selling PriceMR; WBP Moisture Resistant; Water and Boil Proof

OSB Oriented strand board

MDF Medium Density Fibreboard

PHND Pin hole no def ect gradeA rrow s Price has moved up or dow nClean saw n square edged boule

Ocean Freight Index

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul

Jan 2008 - Jul 2011

I n d e x

The BSI (Baltic Supramax Index), published by the Baltic Exchange, is theweighted average on 5 major time-charter routes. It is based on a 52,454 mtbulk carrier carrying commodities such as timber.


22/22


Tropical Log Price Trends

Tropical Log FOB Price Trends

90

100

110

120

130

140

150

160

170

180

190

200

210

220

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul2010 2011

P r i c e

I n d e x

( J a n

1 9 9 7 =

1 0 0 )

African Mahogany Obeche AyousSapele IrokoMeranti SQ & Up Keruing SQ & Up

Tropical Sawnwood Price Trends

Tropical Sawnwood FOB Price Trends

90.0

110.0

130.0

150.0

170.0

190.0

210.0

230.0

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

2010 2011

P r i c e

I n d e x

( J a n

1 9 9 7 =

1 0 0 )

Me ranti Ja toba/Courbaril Sapele

Iroko Wawa Emeri

Ceiba

Tropical Plywood Price Trends

Tropical Plywood FOB Price Trends

80.0

90.0

100.0

110.0

120.0

130.0

140.0

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

2010 2011

P r i c e

I n d e x

( J a n

1 9 9 7 =

1 0 0 )

Indonesian 2.7mm Indonesian 6mm

Bra zilian Virola 5.2mm Brazilian Pine 9mm

Malaysian 2.7mm Malaysian 9mm

More price trends in Appendix 4, ITTOs Annual Reviewhttp://www.itto.or.jp/live/PageDisplayHandler?pageId=199

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