Central/West Africa: Firming demand to eventually translate to higher log prices

Source:
ITTO's Tropical Timber Market Report
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Log export prices remained stable and unchanged up to mid April. Although demand for logs is reportedly good and log availability is gradually tightening there are no indications, as yet, of any significant upward trend in prices. Buyers for the Chinese market are active but the volumes demanded are not yet back to levels normally seen during the spring months. Indian importers are also active in the log market but only for a very limited range of species.

Overall, demand for padouk and okoume has firmed and analysts suggest that prices are likely to move higher as available supplies are barely sufficient to satisfy the market. Demand in Middle Eastern countries is firm and producers anticipate this will be sustained. The Middle East markets, along with those of China and India, are now the focus for most West and Central African producers.

EUTR paperwork burying exporters
Iroko sawnwood is in high demand and export prices have moved higher over the past weeks. Prices of some individual species have been moving higher, for example doussie sawnwood export prices increased significantly and doussie GMS prices are up around euro 50 – 70 per cubic metre reflecting firm demand and limited supply. Demand from importers in Europe is still very subdued and producers continue with their policy of balancing output with anticipated demand.

Producers are supplying timber shipments to Europe accompanied by a raft of paperwork on the legality of their concession agreements, operations and on the supply chain from the forest coupe where the logs were harvested through to the loading onto the vessel. The consensus is that European importers may have to live with much higher prices for W. African hardwoods because of their stringent quality requirements and because producers will be seeking to recover the costs incurred in complying with the EUTR.

Progress in African VPAs reported by the EU
The EU FLEGT Facility distributes a newsletter providing bimonthly updates on implementation of the EU Action Plan for Forest Law Enforcement Governance and Trade. The Newsletter is produced by the European Forest Institute's EU FLEGT Facility in cooperation with the EU FAO FLEGT Programme and the European Union.

The Newsletter can be obtained by subscribing at http://news.efi.int/newsletter/subscribe.

The following has been extracted from the EU FLEGT Facility Newsletter on progress towards VPAs in participating W. African countries. Further details can be found at: http://www.euflegt.efi.int/portal/home/vpa_countries/in_africa/

VPA between Republic of the Congo and EU comes into force
The VPA between the Republic of the Congo and the EU entered into force on 1 March 2013 following the completion of ratification on 19 February 2013. Since the bilateral agreement was signed in May 2010, the Republic of the Congo has implemented procedures to enable full implementation of the VPA. The Republic of the Congo is one of five countries in Central Africa negotiating or implementing a VPA.

Côte d’Ivoire and EU to begin VPA negotiations
The EU and Côte d’Ivoire will enter formal negotiations of a VPA. Côte d’Ivoire is one of the main tropical timber-exporting countries supplying timber to the EU market.

Priorities set for VPA implementation in Cameroon
The implementation of the VPA in Cameroon is underway, with Cameroon and EU stakeholders considering the top priorities for 2013. As Cameroon develops its timber legality assurance system the focus will be on delivering the ‘certificate of legality’ and advancing the traceability and verification processes. An evaluation of whether private sector certificates in Cameroon meet the requirements of the VPA is ongoing. The first 2013 meeting of the Joint Implementation Committee, to be held in late April, will evaluate the progress of VPA implementation and agree on priorities for the year.

VPA negotiations in DRC focus on legality definition
Negotiations continue for a VPA between the Democratic Republic of the Congo (DRC) and the EU. Monthly video-conference meetings are arranged to discuss the wording of the various annexes.
Improving civil society engagement in the VPA dialogue remains a key focus of environmental and social NGOs in the DRC and the EU. In February, local and European NGOs met to discuss the process and to coordinate activities. NGO coordination work at local, national and international levels continues.

Lessons learned from Liberia’s timber-tracking system
The achievements and lessons learned from the development of LiberFor, Liberia’s chain of custody system, have been compiled in a report by PROFOR (the Program on Forests). The report includes videos and slide shows and covers key issues in forest governance in Liberia.

Log Export Prices

West Africa logs, FOB € per m³
Asian market
LM
B
BC/C
Acajou/ Khaya/N'Gollon
215
215
155
Ayous/Obéché/Wawa
215
210
150
Azobe & Ekki
205
205
130
Belli
220
220
-
Bibolo/Dibétou
145
130
 
Iroko
270
220
215
Okoume (60% CI, 40% CE, 20% CS) (China only)
245
225
200
Moabi
280
280
190
Movingui
185
155
150
Niove
165
165
-
Okan
300
300
-
Padouk
340
320
235
Sapele
270
255
175
Sipo/Utile
320
290
175
Tali
275
275
-


Sawnwood Export Prices

West Africa sawnwood, FOB
€ per m³
Ayous FAS GMS
330
Bilinga FAS GMS 515
Okoumé FAS GMS
470
FAS. fixed sizes
290
Std/Btr GMS
350
Sipo FAS GMS
545
FAS fixed sizes -
FAS scantlings
490
Padouk FAS GMS
850
FAS scantlings
840
Strips
340
Sapele FAS Spanish sizes
480
FAS scantlings
505
Iroko FAS GMS
580
Scantlings
600
Strips
440
Khaya FAS GMS
430
FAS fixed
465
Maobi FAS GMS
550
Scantlings
550
Movingui FAS GMS
400
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