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Tropical Timber Market ReportVolume 16 Number 2, 16th 31st January 2011

The ITTO Tropical Timber Market (TTM) Report, an output of the ITTO Market Information Service (MIS), ispublished in English every two weeks with the aim of improving transparency in the international tropical timber

market. Its contents do not necessarily reflect the views or policies of ITTO. News may be reprinted withoutcharge provided that the ITTO TTMReportis credited. A copy of the publication should be sent to [email protected].

Contents

Central/West Africa 2

Ghana 2

Malaysia 3

Indonesia 5

Myanmar 5India 6

Brazil 7

Peru 9

Bolivia 10

Japan 10

China 12

Europe 13

North America 16

Internet News 18

Currencies and Abbreviations 19

Ocean Freight Index 19

Tropical Timber Price Trends 20

Top Story

Sarawak raises royalty on timberIn November 2008, the State Government of Sarawakannounced its intention to introduce a single flatroyalty rate for all logs at RM65 per cu.m to beeffective from 1 January 2009. Following an appeal bythe Sarawak Timber Association, the Governmentagreed to a step-by-step increase of the royalty rate:RM50 per cu.m in 2009, RM55 per cu.m in 2010 andRM65 per cu.m in 2011 and onwards.

However, due to the poor market situation in 2009 and2010, the single flat royalty rate of RM50 per cu.mwas also applied in 2010. The royalty rate has beenincreased to RM65 per cu.m for all logs effective from1 January 2011.

Headlines

Sustained China and India demand 2keeps log market stable in Central/West Africa

Value of timber product exports 2increased despite lower export volumein Ghana

Malaysia needs more foreign workforce 4to meet export target

Germany is the largest market in Europe 5for Indonesian rattan products

Mixed market outlook in Myanmar 5

Increasing demand for industrial wood 6in India

New export strategy for furniture 8manufacturers of Santa Catarina in 2011

Japan wood demand for 2011 11

China announces stipulation on re- 12export permits for sawnwood processedfrom imported logs

Tropical hardwood faces mounting 14competition from heat treated wood


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2 ITTO TTM Report 16:2 16 - 31 January 2011

Report from Central/West Africa

Sustained China and India demand keeps log marketstableThe West and Central African producers expect activetimber trade in the first quarter of 2011, despite continuingslow demand from the European markets. The optimismamong the producers is due to sustained demand of logsfrom China and India.

The on-going stability in timber trade is attributed to thedecision by Cameroon to re-impose log export quota whilethe Gabon log export ban still holds. Producers efforts tomatch supply with demand also contribute to pricestability.

Demand for and prices of some prime species have beenfluctuating with okume log prices moving up currentlywhile those for sapele and sipo logs are expected to trenddownwards. Bubinga log prices jumped as demand forlarge diameters picked up for the Indian and Chinesemarkets. Export demand for iroko logs is also good,pushing prices up. Iroko sawnwood prices are also in anupward trend.

Gabon log export ban remains in placeFollowing the appointment of a new Forest Minister inGabon, the government has instructed log producers toremove old logs from the port and export storage areas.Any logs that have remained in the areas more than 6months from the felling date will be confiscated by thegovernment. This reinforces the view that the log exportban will remain in place, says an analyst.

Consequently, log producers without sufficient processingcapacity of their own are contracting other mills to sawand process high density prime species. According toreports, at least a proportion of these logs have been sawedinto boules.

Positive prospects for sawnwood exportsProspects for sawnwood exports from the West andCentral Africa are positive. Sawmills are reportedlyhaving orders in hand for deliveries up to the end of thefirst quarter and enquires for forward deliveries beyondthe first quarter have been received.

Demand for iroko continued to strengthen, with pricesshowing moderate increase. Okume sawnwood prices alsogained slightly as demand rebounded from the slowerperiod experienced in the fourth quarter of 2010 duringwhich sales fell below expectations and some millsstopped cutting okume in favour of premium, higherdensity species.

Overall, prime species attract higher prices which haveheld firm except for sapele and sipo. European buyers arestill reluctant to commit any major forward shipments andcontinue to buy only small volumes. However, this just-in-time strategy will make it difficult for the European buyersas most mills in the region have full order books and willnot be able to respond to prompt shipments. There arereports of new investment in existing mills in order to

expand sawnwood production, buoyed by confidence ofproducers of continuing good demand throughout thecoming months.

West Africa Log Prices

West Africa logs, FOB per m3

Asian marketAcajou/ Khaya/N'Gollon

Ayous/Obeche/WawaAzobe & EkkiBelliBibolo/DibtouBubingaIrokoOkoume (60% CI, 40% CE, 20% CS)(China only)MoabiMovinguiNioveOkanPadoukSapeleSipo/UtileTali

LM205

190

205210145720265240

280180145320380245275270

B205

190

205210130600260-

280150145320345235250270

BC/C153

145122-

440195-

190140--235170190-

West Africa Sawnwood Prices

West Africa sawnwood, FOBAbura KDAyous FAS GMSBilinga FAS GMSOkoum FAS GMS

FAS. fixed sizesStd/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 m3

560300430

380360300420

-480600620

320390

435590600380415400505440

360

Report from Ghana

Value of timber product exports increased despitelower export volumeAccording to the report released by the Timber Industry

Development Division of Ghana, timber product exportsin December 2010 amounted to 30,200 cu.m worth Euro10 million compared to 37,600 cu.m and Euro 9.8 millionin December 2009. Timber product exports thus fell 20%in volume, but gained 2% in value.

The total value of timber products exported from Januaryto December 2010 was Euro 138 million compared toEuro 128 million in 2009.

However, the export value of primary products includingpoles and billets in 2010 was Euro 6.8 million compared toEuro 12.6 million earned in 2009.

Exports of tertiary timber products were valued at Euro10.2 million in 2010 increasing from Euro 8.1 million


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registered in 2009, while exports of secondary timberproducts fetched Euro 121 million in 2010 compared toEuro 107 million in 2009.

According to the report, exports to other African countrieswere 191,000 cu.m in volume and Euro 53.5 million invalue in 2010. The ECOWAS countries including Nigeria,

Senegal, Niger, Gambia, Mali, Benin, Burkina Faso andTogo accounted for Euro 49.1 million of the total exportsto African countries. Plywood and air-dried sawnwoodincluding ofram and ceiba continue to be in favour ofbuyers in Nigeria and Niger.

Timber product exports to Europe in 2010 amounted to85,000 cu.m worth Euro 40 million, with the maindestinations being Italy, France, Germany, the UK,Belgium, Spain, Ireland and the Netherlands.

Emerging markets for Ghanaian timber products seem tobe in Asia and Far East including India, Malaysia, Taiwan

P.o.C, China, Singapore and Thailand. The value of timberproduct exports to these countries was Euro 23.8 millionin 2010. India continues to be the major importer ofGhanaian teak poles, billets and sawnwood.

The value of timber product exports to the Middle Eastcountries including Saudi Arabia, Lebanon, United ArabEmirate and Israel together was Euro 10.5 million in 2010.

Ghana Log Prices

US$ per m3Ghana logs, domestic

WawaOdum Grade A

CeibaChenchenKhaya/Mahogany (Veneer Qual.)Sapele Grade AMakore (Veneer Qual.) Grade A

Up to 80cm133-145160-170

107-11490-100100-115135-150125-135

80cm+152-165175-185

120-140105-120120-145160-175140-166

Ghana Export Sawnwood Prices

Ghana Sawnwood, FOB per m3

FAS 25-100mm x 150mm up x 2.4m upAbura/SubahaAfrormosiaAsanfinaCeibaDahomaEdinam (mixed redwood)EmeriAfrican mahogany (Ivorensis)

MakoreNiangonOdumSapeleWawa 1C & Select

Air-dried410855500215309400350568

520518625545260

Kiln-dried480

-560262385450

430650

585590

690600285

Ghana sawnwood, domesticWawa 25x300x4.2mEmeri 25x300x4.2mCeiba 25x300x4.2mDahoma 50x150x4.2mRedwood 50x75x4.2mOfram 25x225x4.2m

US$ per m3

268307230292315

313

Ghana Veneer Prices

Rotary Veneer, FOB per m3

Bombax

Ofram, Ogea & Otie

Chenchen

Ceiba

Mahogany

CORE (1-1.9mm)

315

318

315

320

415

FACE (


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to RM65 per cu.m for all logs effective from 1 January2011.

More foreign workforce needed to meet export targetThe value of timber and timber product exports fromJanuary to November 2010 totalled RM18.8 billion, up6.5% over the same period in 2009. Timber productexports are projected to reach RM20.5 billion in 2010. In2011, exports are forecast to further increase to RM21billion - RM22 billion.

The National Timber Industry Policy (NATIP) sets anexport target of RM53 billion by 2020 for timber andtimber products. The target requires an annual exportgrowth of 6.4% with 60% of exports to be derived fromvalue-added products. The current share of value-addedproducts to timber product exports is 40%.

According to the Ministry of Plantation Industries andCommodities, the Malaysian timber industry needs 50,000more workers in order to meet the export target. In

addition, the furniture sector is experiencing a shortfall of23,000 workers.

The current shortage of workers is attributed to severalrestrictions imposed by the federal government to promotethe employment of local population as the globaleconomic slowdown continues. However, the Malaysiantimber industry is dependent on foreign labour. Thebooming furniture sectors in Vietnam and China competewith the Malaysian timber industry for foreign workforce.

According to a recent study conducted by the MalaysianTimber Industry Board (MTIB), Forest Research Instituteof Malaysia (FRIM) and Malaysian Timber Council(MTC), the production of value-added timber productsgenerated RM24 billion to the Malaysian economy in2009.

Concern over increasing costsThe Sarawak Timber Association (STA) expressedconcern over the recent increases in fuel prices, freightcharges and cargo insurance costs. In addition, the STAhopes that the federal government would be able toprovide more incentives for forest plantation projects aswell as for the use of lesser-known-species.

The industry is taking a break for the Chinese Lunar NewYear, with many of the workers returning to theirrespective hometowns for the celebration.

Log PricesSarawak log, FOBMeranti SQ up

SmallSuper small

Keruing SQ upSmallSuper small

Kapur SQ upSelangan Batu SQ up

US$ per m3

248-273234-264234-255233-245221-249206-232224-250217-251

Pen. Malaysia logs, domestic(SQ ex-log yard)DR MerantiBalauMerbauRubberwoodKeruing

US$ per m3

257-276312-341341-37390-124233-249

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

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

US$ per m3

402-438294-324441-454263-285353-371315-338

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

25x75x660mm up50-75mm Sq.

>75mm Sq.

US$ per m3

333-353465-517270-310

226-276265-297

287-316

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

US$ per m3

424-486404-434352-424

Meranti ply BB/CC, domestic3mm12-18mm

US$ per m3

347-438330-359

Other Panel PricesMalaysia, Other Panels, FOB

ParticleboardExport 12mm & up

Domestic 12mm & up

MDFExport 15-19mmDomestic 12-18mm

US$ per m3

241-264

229-246

295-326285-303

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

11x68/92mm x 7ft upGrade AGrade B

US$ per m3

554-565

569-582523-533

Furniture and Parts Prices

Malaysia, Rubberwood, FOB

Semi-finished dining tablesolid laminated top 2.5'x4', extension leaf

As above, Oak VeneerWindsor ChairColonial ChairQueen Anne Chair (soft seat)

without armwith arm

Chair Seat 27x430x500mm

US$ per piece

71-8778-9270-7268-73

69-7668-7756-61

Rubberwood Tabletop22x760x1220mm sanded & edge profiled

Top GradeStandard

US$ per m3

607-637588-607


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CNF Plantation Teak

Tanzania Teak sawnCte d'Ivoire logsPNG logsEl-Salvador logsGuatemala logsNigeria squaresGhana logs

Guyana logsBenin logsBenin sawnBrazil squaresBurkina Faso logsColumbia logsTogo logsEcuador logsCosta Rica logsPanama logsSudan logsVenezuela logs

US$ per m3

450-775

500-650500-550415-550

400-500360-450350-550

350-450450-650475-600475-600350-450365-600350-500350-400350-500315-400500-600

460-500Variations 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.

India Sawnwood Prices (domestic) Myanmar Teak (imports)

Sawnwood (Ex-mill)Myanmar Teak (AD)Export Grade F.E.Q.Plantation Teak A gradePlantation Teak B gradePlantation Teak C grade

Rs. per ft3

5200-75003000-38002500-28001800-2000

India Sawnwood Prices (imports)Sawnwood, (Ex-mill) (AD)

MerbauBalauKapurRed MerantiBilingaRadiata Pine (AD)

Rs. per ft3

13001250900650650

340-350

Sawnwood, (Ex-warehouse) (KD)BeechSycamoreOak woodAmerican WalnutHemlock clear gradeHemlock AB gradeWestern Red Cedar

Rs. Per ft3

11001250140018501000850

1350

India Plywood Prices

Plywood, (Ex-warehouse) (MR Quality)4 mm6 mm12 mm15 mm18 mm

Rs. per sq.ft30.843.458.670.084.4

Locally ManufacturedPlywood CommercialGrade

Rs. per sq.ft

4mm6mm8mm12mm19mm

5mm Flexible ply

RubberwoodRs.11.00Rs.16.00Rs.20.00Rs.24.00RS.31.50

Rs.19.50

HardwoodRs.18.00Rs.26.30Rs.29.40Rs.31.60Rs.42.50

Rs.23.50

Report from Brazil

Timber product prices on an upward trendThe average price of timber products in Brazil in BRLincreased by 2.1% from the previous fortnight. Prices inUS dollars also gained 0.59% due to the slightappreciation of the Brazilian currency against the USdollar.

Mixed performance of wood product exports in lasttwo months of 2010In November 2010, the value of timber product exports(excluding pulp and paper) increased 7.6% to US$204million from US$189 million in November 2009. Exportsof timber products continued to improve in Decembershowing 2.5% increase compared to December 2009, fromUS$219 million to US$224 million.

In November, exports of tropical sawnwood rose in termsof both volume and value, from 48,400 cu.m worthUS$25.7 million recorded in November previous year to

53,200 cu.m worth US$28 million. However, exportsdeclined in December from 49,100 cu.m worth US$25.5million recorded in December previous year to 42,300cu.m worth US$23.1 million.

Exports of tropical plywood plunged 28% year-on-year inNovember, from 9,900 cu.m to 7,100 cu.m, but increased11% year-on-year in December, from 8,100 cu.m to 9,000cu.m. In value terms, a 28.6% decline was recorded year-on-year in November, from US$5.6 million to US$4.0million, followed by a rebound of 16.3% in December,from US$4.9 million to US$5.7 million.

Pine sawnwood exports surged 35% year-on-year inNovember, from 40,900 cu.m to 55,300 cu.m, but slid17.1% year-on-year in December, from 65,900 cu.m to54,600 cu.m. In value terms, a 62% jump was recordedyear-on-year in November, from US$7.8 million toUS$12.6 million, followed by a 3.8% decline in December,from US$13 million to US$12.5 million.

Pine plywood exports increased 0.8% year-on-year inNovember, from 85,000 cu.m to 85,700 cu.m andadvanced further in December by 13% year-on-year, from83,300 cu.m to 94,400 cu.m. In value terms, a 15%increase was recorded year-on-year in November, fromUS$26.4 million to US$30.3 million, and a further surgeof 23% in December, from US$27.1 million to US$33.4million.

In contrast, the value of wooden furniture exports slipped0.2% in November and 3.4% in December year-on-year toUS$46.6 million and US$51.4 million respectively.


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Authorities monitor inflationary trends in economyAccording to the Brazilian Institute of Geography andStatistics (IBGE), the Consumer Price Index (IPCA) rose0.83% in November and 0.63% in December year-on-year.The accumulated IPCA for the year 2010 was 5.91%, 1.6percentile points above the 2009 rate (4.31%)

In November 2010, the average exchange rate for BRL tothe US dollar was BRL1.71/US$ compared to BRL1.73/US$ during the same month of 2009. In December2010, the average exchange rate stood at BRL 1.69/US$,compared to BRL 1.75/US$ in December 2009. Thisshows that BRL has further strengthened against the USdollar over the period.

The Copom (Economic Policy Committee) has kept theprime interest rate (Selic) at 10.75% since July 2010.

Brazilian Forest Service aims at expanding nationalforests (FLONAS)It was reported earlier that the area available for forest

concessions in the Brazilian Amazon exceeded 1 millionhectares. Recently the Brazilian Forest Service (SFB)announced its intention to increase forest concession areasfor logging companies and forest areas for communitymanagement. Furthermore, SFB will speed up the forestconcession approval process.

According to SFB, there are 50 million hectares of forestswhich can potentially be turned into national managedforests (FLONAS). At least 35 million hectares of nationalmanaged forests would be required in order to meetcurrent timber demand.

In addition, part of the future timber supply will comefrom community forest management projects aimed atoffering sustainable economic alternatives to illegallogging. SFB believes that community forest managementprojects are among those likely to receive internationalfunds in the coming years.

New export strategy for furniture manufacturers in2011According to the Chamber of Furniture IndustryDevelopment of FIESC (Federation of Industries of thestate of Santa Catarina), the furniture manufacturers ofSanta Catarina will focus on selling more furniture in the

domestic market. The strategy change is due to theweakening of US dollar against the Brazilian Real. SantaCatarina is the major state in Brazil exporting furniture.

In 2009, furniture sales in the domestic market grew 5.2%compared to 2008. In October 2010, the accumulatedfurniture sales were up by 20% over the same period in2009.

The value of furniture exports from Santa Catarina wasUS$260 million in 2009, accounting for 31% of the totalBrazilian furniture exports. In the period from January toNovember 2010, furniture exports totalled US$248 millionin value. The main export destinations were the US,France, the UK, the Netherlands, Spain and Germany.

Brazil stands out in furniture productionAccording to the Italian Research Institute (CSIL), Brazilis the worlds 13th largest furniture supplier and itsindustry is growing. The institute predicts that theBrazilian furniture industry will grow by 3% 4% in 2011and 2012.

According to CSIL, besides the economic growth in Brazil,the expansion of the furniture industry is due to severalother factors, such as the significant expansion in civilconstruction, growing middle class, and the countryscompetitive position in the international market. In thenext two years, furniture consumption will be muchgreater in emerging economies than in developedeconomies.

A large share of furniture production and sales isconcentrated in the Southern and Southeast regions ofBrazil. The furniture cluster consists of about 15,000micro and small-sized companies. The annual panelproduction capacity is expected to grow from 6 millioncu.m to 10.3 million cu.m by 2012.

Brazilian furniture sales hit a record high in 2008. In 2009,sales went down due to the global economic crisis and stiffcompetition from Asian products. However, according toCSIL, furniture consumption increased in the Southernand Southeast regions of Brazil in 2010.

IBAMA introduces new timber export control

The Document of Forest Origin (DOF) used since 2006 tocontrol the trade in forest products in the Braziliandomestic market has been adapted to be used for theexport markets. The new module called DOF Exportcommenced operation on 10 January 2011 with the aim ofimproving transparency of the public administration andreducing bureaucracy.

DOF Export will be integrated to the state forest controlsystem. Under the previous system, an entrepreneur had toregister a timber courtyard in every export warehouse.With the new system, these warehouses are already pre-registered and thus duplication is avoided.

DOF can be also used as a REDD (Reducing Emissionsfrom Deforestation and Degradation) tool to evaluate the

legality of wood products originating from Brazil. Thenew system includes also a government databaseconsisting information about foreign buyer companies.With these features, a foreign buyer is guaranteed of thelegality of wood products, thereby improving andenhancing the competitiveness of Brazilian forest productsin the international markets.

IBAMA has received delegations from several tropicalforest countries, such as Indonesia, Ghana and Bolivia,which have shown their interest in adopting the Braziliantechnology to control the forest products flow.


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Brazil Log Prices (domestic)Brazilian logs, mill yard, domesticIpJatobaGuariubaMescla (white virola)

US$ per m3

1581147481

Brazil Export Sawnwood PricesSawnwood, Belem/Paranagua Ports, FOB

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

Angelim pedraMandioqueira

Pine (AD)

US$ per m3

867509276662244201

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

JatobaSouthern Mills(ex-mill) Eucalyptus (AD)

Pine (KD) 1st grade

US$ per m3

766588201

258

Brazil Veneer Prices

Veneer, Export (Belem/Paranagua Ports) FOBWhite Virola Face 2.5mm

Pine Veneer (C/D)

US$ per m3

298

209

Rotary cut Veneer, domestic US$ per m3

(ex-mill Northern Mill)White Virola

Face

273Core

225

Brazil 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 m3

452392

523420

Pine Plywood EU market, FOB

9mm C/CC (WBP)15mm C/CC (WBP)18mm C/CC (WBP)

US$ per m3

280260248

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

White Virola 15mm

US$ per m3962

699Domestic prices include taxes and may be subject to discounts.

Other Brazil Panel PricesBelem/Paranagua Ports, FOBBlockboard Pine 18mm 5 ply (B/C)

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

US$ per m3

312

588382

Brazil Added Value ProductsFOB Belem/Paranagua PortsEdge Glued Pine Panel

Korean market (1st Grade)US Market

Decking Boards CambaraIp

US$ per m3

625494622

1,646

Report from Peru

Appeal for Congress to pass Forestry and Wildlife Law

The Peruvian Exporters Association (Adex), the NationalSociety of Industries (SIN) and the National ForestChamber have appealed to the Congress to pass the

Forestry and Wildlife law in March. According to thesebodies, an adequate legal framework would help the sectorto boost exports and create jobs.

Call for integrated policies for the forestry sectorThe export performance of wood and timber products in2011 is expected to be lower than in 2010 if the nextgovernment does not commit to support the sector, saidEric Fischer, Chairman of the Wood Committee, PeruExporters Association.

According to Fischer, the regional governments arelacking in resources and integrated State policies tosupport and promote the forestry sector in Peru.

Significant losses from deforestationAn impact analysis of deforestation in Pichis-Palcaz ofthe Pasco region shows a loss of some US$750 - US$811million in revenue in the next 30 years period due todeforestation.

The analysis considered the losses in opportunities andrevenues from sustainable forest management, involving atotal area of 1,4 million hectares. According to estimates,some 269,000 hectares were deforested in 2007, with 57%of the deforested area turned into pastureland and theremaining 43% into shifting cultivation.

Peru Sawnwood PricesPeru Sawnwood, FOB Callao PortMahogany S&B KD 16%, 1-2 random

lengths (US market)Spanish Cedar KD select

North American marketMexican market

Pumaquiro 25-50mm AD Mexican market

US$ per m3

1655-1702

918-922897-921532-586

Peru Sawnwood, FOB Callao Port (cont.)Virola 1-2" thick, length 6'-13' KD

Grade 1, Mexican market

Grade 2, Mexican marketCumaru 4" thick, 6-11 length KD

Central American marketAsian market

Ishpingo (oak) 2" thick, 6'-8' lengthSpanish marketDominican Republic

Marupa (simarouba) 1, 6-11 length Asian market

US$ per m3

319-370

269-279

831-855798-866

509-549558-569359-382

Peru Sawnwood, FOB IquitosSpanish Cedar AD Select Mexican marketVirola 1-2" thick, length 6'-12' KD

Grade 1, Mexican marketGrade 2, Mexican marketGrade 3, Mexican market

Marupa (simarouba) 1, 6-13 length KD

Grade 1, Mexican market

US$ per m3

887-909

324-344264-275139-156

216-235

Peru sawnwood, domesticMahoganyVirolaSpanish CedarMarupa (simarouba)

US$ per m3

879-91151-69

259-31159-72

Peru Plywood Prices

Peru plywood, FOB (Mexican Market)Copaiba, 2 faces sanded, B/C, 15x4x8mmVirola, 2 faces sanded, B/C, 5.2x4x8mmCedar fissilis, 2 faces sanded 4x8x5.5mmLupuna, treated, 2 faces sanded, 5.2x4x8mmLupuna plywood B/C 15x4x8mm

B/C 9x4x8mmB/C 12x4x8mmB/C 8x4x15mmC/C 4x8x4mm

Lupuna plywood B/C 8x4x4mm Central Am.

US$ per m3

318-347396-402733-744363-385353-365345-350350-360396-408380-388368-388


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Peru Veneer Prices

Veneer FOBLupuna 3/Btr 2.5mmLupuna 2/Btr 4.2mmLupuna 3/Btr 1.5mm

US$ per m3

191-212203-217211-221

Lupuna Plywood BB/CC, domestic(Iquitos mills)

122 x 244 x 4mm

122 x 244 x 6mm122 x 244 x 8mm122 x 244 x 12mm

(Pucallpa mills)122 x 244 x 4mm122 x 244 x 6mm122 x 244 x 8mm122 x 244 x 12mm

US$ per m3

433

397409399

458439430429

Other Peru Panel Prices

Peru, Domestic Particleboard1.83m x 2.44m x 4mm1.83m x 2.44m x 6mm1.83m x 2.44m x 12mm

US$ per m3

282230204

Peru Added Value Product Prices

Peru, FOB strips for parquetCabreuva/estoraqueKD12% S4S, Asian marketCumaru KD, S4S Swedish market

Asian marketCumaru decking, AD, S4S E4S, US marketPumaquiro KD # 1, C&B, Mexican marketQuinilla KD, S4S 2x10x62cm, Asian market

2x13x75cm, Asian market

US$ per m3

1277-1376797-920933-998

949-1098423-511477-503708-768

Report from Bolivia

Forest product exports surged in 2010Forest product exports from Bolivia totalled US$237million in 2010, up 33% from US$178.8 million in 2009.

Furniture, doors, panels, decking (as well as peeledchestnut and canned palm hearts) accounted for 82%(US$195.4 million) of the total forest product exports,while the remaining 18% (US$42.4 million) consisted ofprimary processed wood products, such as sawnwood andpoles.

The US remains the major market for Bolivian forestproducts taking some US$55.5 million, which accountedfor 23.4% of the total forest product exports from Bolivia.Other major export destinations were the UK (US$36.6million), Venezuela (US$15.3 million), the Netherlands(US$14.5 million), and China (US$13.5 million).

Wood product export destinations in 2009/2010

Bolivia Sawnwood Prices

Sawnwood 1-3x3x5x7-19, FOB Arica PortMorado / Caviuna (Japan, US and FranceMarket)Roble / Oak (Indonesia Market) (AD)Quina Quina / Santos Mahogany (China)Cuta (French Market) (FSC)Cambar / Jaboty (Belgium Market) (AD)

US$ per m3

1510-2000

700846

700-780780

Bolivia Added Value Product Prices

Doors 13/4x36x96, FOB Arica PortYesquero / Jequitiba (US Market)Ocho / Hura, Possumwood, Assacu(US Market)Yesquero / Jequitiba (US Market)

Avg $ per piece120-305

231

55-100

Chairs FOB Arica PortIpe (US market)Roble/Oak (UK market)

Parquet Flooring 3/4x3-5x1-7,FOB Arica PortJatob (US and China Market) (KD)Ip (Germany Market) (AD)Cumar (US and Germany Market) (KD)

$ Avg Per piece47-17849-83

$ Avg un. val. Per m3

1260-138518881350

Report from Japan

Softening Yen pushes imported log prices higher

The market for tropical logs in Japan is firm, reports JapanLumber Reports (JLR). Prices of imported logs continue toclimb gradually as log suppliers remain bullish on pricesand the Yen eases marginally against the US dollar.

Plywood mills in Japan utilising imported tropicalhardwood logs are maintaining reduced production levelsat around 70% of full capacity. However, plywoodmanufacturers log inventories are low and some millswere trying to rebuild stocks ahead of the Chinese Lunar

New Year, but are facing difficulties in sourcing preferredspecies and grades.

In Japan, CIF prices gained Yen 200 from December toYen 7,400-7,500 per koku for Sarawak meranti regularlogs. Small meranti logs are now priced at Yen 6,600-6,700 per koku, but JLR anticipates that prices will shortlyreach Yen 7,000 per koku. Sabah kapur log prices stood atYen 9,500 per koku, unchanged from last November.

FOB log prices in January continued to be bullish. Withthe low log supply continuing coupled with steady demandfrom Chinese and Indian buyers, prices are not expected toretreat during the next six months, says JLR.

Plywood supply falls short of demandTropical plywood inventories are down in all major portsin Japan. With higher export prices and firm demand forplywood, port prices in Japan are inching up, reports JLR.Plywood manufacturers bullish stance on prices and theshortage of log supply have pushed plywood prices up. Inparticular, prices for thin panels and floor base are strongdue to the shortage of quality logs. Arrivals of plywoodwill remain low for sometime as production in millsdropped under the Chinese Lunar New Year.

Prices for imported 3x6 concrete formboard are now atYen 900-910 per sheet delivered and 12mm panel for


11/20


foundations fetches Yen 930-950 per sheet delivered, bothup Yen 10-20 per sheet compared to December 2010.

The JLR reports that the market share of thin and mediumpanels has been reduced and replaced by substitutesespecially MDF.

November 2010 housing starts higher than in previousyearTotal housing starts in Japan in November 2010 were72,838, up 6.8% from November in the previous year. Thenumber of housing starts has increased for the sixthconsecutive month in 2010, reports JLR. However,November 2010 starts were still the second lowest everrecorded for the month of November. Owners units andunits built for sale showed some improvement comparedto the previous year, but housing starts for rental unitshave continued to fall.

The seasonally adjusted housing starts rose 4.2% fromOctober to 847,000 in November 2010. Wood frame unitswere up by 1.6% over November 2009 and theseaccounted for about 57% of the total housing starts inNovember 2010.

November housing starts

Nov-10% Change to

Nov-09

Total 72,838 6.8

Owner's units 27,235 7.1

Rental units 26,703 -9.5

Built for sale 18,549 46.3

Wood frame units 41,454 1.6

Prefabricated units 11,676 -1.2

2x4 units 9,191 -3.6 Source: JLR

Housing start forecast for 2011

JLR reports on the Japan Forest Product Journals housingstarts survey on 13 major house builders in Japan.According to the survey, the projected housing startgrowth for 2011 is around 10%, from 813,126 units in2010 to 874,000 units in 2011.

In 2009, housing starts stood at 751,429 units, the lowestsince 1964. Housing starts recovered to 813,126 units in2010, thanks to government initiatives including taxbreaks, low mortgage interest, the introduction of eco-point system etc. In 2010, the units for sale led therecovery with an increase of almost 20% over the previousyear.

Wood demand for 2011JLR reports on wood demand projections for 2011released at the Japan Foreign Timber General Supply andDemand Liaison Conference. The forecast is for animprovement in housing starts benefiting the building andconstruction sectors. As a result, the total wood demand in2011 is expected to increase 3.2%, from 11.160 million

cu.m in 2010 to 11.522 million cu.m. The wood demand in2010 was 8.3% higher than 10.31 million cu.m in 2009.

Demand for North American logs and sawnwood isexpected to improve in line with the recovering housingstarts for wood frame units in Japan. In addition, moreNorth American logs will be used in plywood production

replacing larch log imports from Russia. However,sawnwood imports from Russia are expected to increase.European sawnwood imports are expected to remainsteady and slightly increase.

Wood demand for 2011 (1,000 cu.m)

20092010

(estimates)

2011

(projections)

% Change to

2010

Logs

South Sea 501 561 545 -2.9

North America 2,486 2,899 3,060 5.6

Russia 860 507 480 -5.3

NZ/Chile 595 710 740 4.2

Europe 12 12 12 -

Total 4,454 4,689 4,837 3.2

SawnwoodSouth Sea 545 571 550 -3.7

North America 2,333 2,687 2,780 3.2

Russia 679 609 660 8.4

NZ/Chile 264 334 355 6.3

Europe 2,036 2,273 2,340 2.9

Total 5,857 6,474 6,685 3.2

Grand total 10,311 11,163 11,522 3.2 Source: JLR

Log and Sawnwood Prices in Japan

Logs 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)

7,2007,4007,2008,000

-10,5009,600

Logs for Sawmilling, CIFMelapi (Sarawak) High SelectAgathis (Sarawak) High Select

Yen per Koku11,500

-

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

Yen per m3

135,00053,000

Wholesale Prices (Tokyo)Dec Jan

Indonesian & Malaysian Plywood Size (mm) ( per sheet)

2.4mm (thin plywood, F 4star, type 2 ) 920 X 1830 320 320

3.7mm (med. Thickness, F 4star, type2) 910 X 1820 450

450

5.2mm (med. Thickness, F 4star, type 2) 910 X 1820 560

560

11.5mm for sheathing (F 4star, type 2) 910 X 1820 910 910

12mm for foundation (F 4star, special) 910 X 1820 930 940

12mm concrete-form ply (JAS) 900 X 1800 890 900

12mm coated concrete-form ply (JAS) 900 X 1800 1030 1040

11.5mm flooring board 945 X 1840 1280 1280

3.6mm baseboard for overlays (OVL) 1230 X 2440 740 740

OSB (North American)

12mm foundation of roof (JAS) 910 X 1820 - -

9mm foundation for 2 by 4 (JAS) 910 X 2440 - -

9mm conventional foundation (JAS) 910 X 2730 - -

9mm conventional foundation (JAS) 910 X 3030 - -


12/20


Report from China

China announces stipulation on re-export permits forsawnwood processed from imported logsOn 31 December 2010, the Ministry of Commerceannounced the authorities responsible for the issuance ofre-export permit licenses in 2011. Re-export permitlicenses are issued for sawnwood processed from importedlogs. Licensed enterprises shall apply for re-export permitsfrom one of the authorised institutions:

Heilongjiang Department of Commerce is responsible forissuing permit licenses for exporting enterprises in theProvince covering the clearance ports of Dalian andSuifenhe Customs.

Inner Mongolia Autonomous Region Department ofCommerce is responsible for issuing permit licenses forexport enterprises in the Province with the clearance portsof Manzhouli, Erlianhot, Dalian, Tianjin and QingdaoCustoms.

Xinjiang Uygur Autonomous Region Department ofCommerce is responsible for issuing permit licenses forexport enterprises in the Province with the clearance portsof Alashankou, Tianjin and Shanghai Customs.

Fujian Department of Foreign Ecomomy and Trade isresponsible for issuing permit licenses for exportenterprises in the Province with the clearance ports ofFuzhou, Xiamen, Putian and Zhangzhou Customs.

SFA forecast steady growth in Chinas consumption ofwood-based panels

According to the Twelfth Five Year Plan for the ForestIndustry compiled by the State Forest Administration(SFA), Chinas consumption of wood-based panel willcontinue to grow. In 2015, consumption of wood-basedpanels is projected to be 146 million cu.m, accounting forone-third of the worlds total. Her annual consumption ofplywood, fiberboard, particleboard and blockboard in2015 will reach 48 million cu.m, 48 million cu.m, 19.5million cu.m and 21.5 million cu.m respectively.

In the Twelfth Five Year Plan for the Forest Industry,consumption of laminated veneer and oriented strandboard is also forecast to increase steadily. Investments inimproved production technologies will support thedevelopment of wood-based panel production in China.Flat-press production line is anticipated to become thedominant technology for producing fiberboard andparticleboard. The fiberboard production capacity forcontinuous flat-press production line will account for 30%of the total production capacity in 2015.

Linyi City is crowned the Capital of China Wood PanelProductionLinyi City in Shangdong Province, Pizhou City in JiangsuProvince, Jiashan City in Zhejiang Province and WenanCity in Hebei Province are the four major wood-based

panel production bases in China. Linyi City was recentlynamed the Capital of China Wood Panel Production bythe China Forestry Product Industry Association.

In Linyi City, there are more than 18,000 wood panelprocessing enterprises which have shifted production fromcommon single particleboard, fiberboard and plywoodproduction to concrete form panels, high-end furniturepanels and multi-layer plywood. These products are soldto 25 countries and regions around the world. In 2010, thevalue of total annual production in Linyi City was

RMB7.55 billion and 6.995 million cu.m in volume, up26% from 2009. Production of wood-based panels in LinyiCity makes up 34% of the national total.

The development of the Chinas forest product industryhas been rapid during the Eleventh Five Year Plan period.The output of forest product industry in China in 2005 wasonly RMB840 in value and increased to RMB1 trillion in2006. For 2010, the output of forest product industry isexpected to exceed RMB2 trillion. The output of Chinesewood-based panel, wooden furniture and wood flooringindustries is ranked first in the world.

Sanmenxia City gets RMB4.5 billion investment infurniture baseThe government of Sanmenxia City in Henan Provinceand China Minnan Investment Group (Hong Kong) Co.Ltd signed a cooperation framework agreement on 15December 2010.

According to the agreement, China Minnan InvestmentGroup (Hong Kong) Co. Ltd will invest RMB4.5 billion toestablish a large scale furniture production base inSanmenxia City. Upon completion, it will be the largestfurniture base in Middle China. The establishment of thefurniture base will play an active role both in promotingdown-stream timber processing and introducing the latesttechnologies in furniture manufacturing.

Guangzhou City Imported Timber 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 2

LauanOkoumeSapele

Yuan per m3

1900-21002000-21003500-4000

11000-130005000-5200

95007500-10000

10000-1300014000-16000

4000-42004000-4500

6000-6400

Shanghai Furen Wholesale MarketLogsTeak (Myanmar, all lengths)

SawnwoodBeech KD Grade AUS Cherry, 1 inchUS Red Oak, 50mmSapele 50mm FAS (Congo)

KD (2, FAS)KD (2,grade A)

Yuan per m3

7500-8500

4800-50009500-100006500-7000

6300-65005700-5800


13/20


Shandong De Zhou Timber 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 m3

1200135013501450

1480

Hebei Shijiangzhuang Wholesale MarketLogsKorean Pine 4m, 38cm+ diamMongolian Scots Pine 4m, 30cm diam.

6m, 30cm+ diam.

SawnwoodMongolian Scots Pine 4m, 5-6cm thick

4m,10cm thick

Yuan per m3170017001750

17001750

Zhejiang Jiashan Kaihua International Timber MarketLogsOkoume 80cm+Sapele 80cm+Wenge 80cm+

SawnwoodDoussie

European beech boulesRadiataPlywoodUS Black Walnut 4x8x3 mmBeech 4x8x3 mmTeak 4x8x3 mmPoplar (4x8x3-5 mm)

Yuan per m3

2900-34006000-6600

13000-14500

3600-4000

3200-3400800-1200

6000-80006000-80006000-80003000-4000

For more information on China's forestry see:www.forestry.ac.cn

Report from Europe

Economic signals remain mixedEconomic prospects are very mixed across the Europeancontinent. On the upside, business confidence hasimproved and economic growth in Germany and France is

picking up. On the downside, economic data in most otherEuropean countries remains disappointing and inflation isrising. The latter is reducing spending power and puttingpressure on central banks in the EU to raise interest ratesat a time when the economic recovery still looks fragile.

European indices of business confidence and activity haveturned upwards in recent months. The latest data onindustrial orders across the Euro-zone showed a 2.1%

jump in November 2010 compared with October.Similarly, the Euro-zone purchasing managers indexreleased at the end of January showed private sectoractivity expanding at its fastest rate in six months. The

composite Euro-zone index, covering manufacturing andservices and regarded as an up-to-date indicator of growthtrends, rose from 55.5 in December to 56.3 in January (afigure over 50 indicates an expansion in activity).According to Markit, the agency that compiles the index,this recent increase is consistent with Euro-zone grossdomestic product expanding at a quarterly rate of 0.7% asubstantial improvement on the 0.3% GDP rise reported inthe third quarter of last year.

Economic conditions vary widely across Europe andindividual Euro-zone countries are, if anything, divergingfurther. While the German economy continues to reboundstrongly and more positive trends are beginning to emergein France, conditions in several countries on the peripheryof the Euro-zone, including Spain, Portugal, Ireland and

Greece continue to look bleak. In these countries,companies orders books and employment are falling,especially in the austerity-hit service sector.

Germanys economy, the Europes largest, has beenexpanding at its fastest rate since June 2006. Itsacceleration has been powered by service sector

companies, which in the January purchasing managerssurvey were more optimistic about the 12 months aheadthan at any time in the past seven years. Germanys Ifobusiness confidence index also reached a record high inthe last week of January.

The French economy appears to have closed the yearstrongly in the 4th quarter, fuelled partly by robust privateconsumption. While growth in 2011 may be constrainedby austerity measures and rising inflation, there isincreasing confidence that this will be offset by risingbusiness investment and stronger exports.

The recovery in Spain this year is expected to be verysluggish, similar to last year. Continuing structuralchanges following collapse of the overheated real estatesector will continue to constrain growth.

Economic conditions in the important Dutch market fortropical wood remain uncertain. Consumer confidence isvery weak with many people pessimistic about the generaleconomic situation and their own financial situation. Onthe other hand, business confidence climbed sharply inDecember last year, the first clear expression of positivesentiment in the Netherlands since the start of the crisis in2008.

Outside the Euro-zone, some very disappointing economicstatistics have been posted in the UK recently. Contrary toexpectations and following two successive quarters ofstronger-than-expected growth, GDP in the UK shrank by0.5% in the last quarter of 2010. The government blamedthe downturn on the severe winter weather which hit thecountry in December. However government critics claimthat public spending cuts designed to balance the budgethave been pushed through too quick and too hard, puttingthe recovery at risk. The GB pound posted substantiallosses at the end of January against other internationallytraded currencies on the back of the news.

Good market prospects in Germany, but still weakelsewhereThe German trade journal EUWID reports that CentralEuropean buying of bangkirai decking products for thecoming spring garden season is already well advanced.Most importers placed their advance orders with SoutheastAsian mills in the last quarter of 2010, with particularlystrong buying in November and the first two weeks ofDecember. This buying pattern is described by EUWID asa return to normal trading conditions during theprevious two years most importers delayed their purchasesuntil after the European new year and may reflect more

confidence in market demand this year. Volumes orderedthis year are also likely to have exceeded last years leveland some importers have built up significant stocks.
http://www.forestry.ac.cn/http://www.forestry.ac.cn/


14/20


However, EUWID suggests that remaining stocks in theFar East are now much reduced so that importers that havedelayed purchasing may now have difficulty sourcingproduct. Although FOB prices of bangkirai decking haveremained stable in recent months, supply constraintssuggest that price hikes are more likely in the future.

EUWID also reports that availability of meranti lumbergrades favoured by German importers is now restrictedand that some importers would be willing to order largervolumes if more wood were made available. On the hand,weakening in the Euro exchange rate against the US dollarduring the last two months has dampened the enthusiasmof some buyers.

Tropical hardwood faces mounting competition fromheat treated woodThe German trade journal EUWID has reported on thedevelopment of European production capacity forthermally modified wood. In recent years, a wideningrange of heat-treated softwood and temperate hardwoodproducts have been marketed as alternatives to tropicalhardwood in the external joinery and furniture sectors. Therecent economic downturn has had an impact on thedevelopment of this sector. Some companies thatexpanded too fast just before the downturn have sufferedfrom low and declining sales and have been reducingcapacity. Others have made it through the downturnlargely unscathed and are pushing ahead with plans toexpand capacity. There are also joinery manufacturingcompanies that have plans in place to develop thermaltreatment plants to supply raw material for their ownproduct lines.

Overall EUWID identifies 30 companies across Europeoperating thermal treatment plants with a total capacity ofaround 300,000 cu.m. Around 40% of this capacity is inFinland, 13% in Germany, 12% in the Netherlands, and8% in Estonia. The remainder is distributed in France,Croatia, Austria, Switzerland, Sweden and Turkey.

Current production capacity may seem relativelyinsignificant when considered against the total EU importsof tropical sawn hardwood of 2.3 million cu.m per year in2007 before the economic downturn. However, 300,000cu.m of potential production takes on a whole new

significance when considered in relation to the totaltropical hardwood sawn imports in the EU of only around1.2 million cu.m per year in the last two years.

Although there are still technical challenges associatedwith thermal treatment of some softwood and temperatehardwood species, and prices for these products can bevery high, it is hard to escape the conclusion that thermallymodified wood now has real potential to take a large shareof the existing European market for hardwood in externalapplications.

Cologne furniture fair exceeds all expectations

The Milan furniture fair held in Italy during April everyyear tends to be regarded as the worlds premier event forfurniture design. However, in recent years the Cologne

imm fair has forged a reputation as Europes leading eventwhen it comes to the business side of the industry. By allaccounts this years show, which ended on 23rd January,considerably reinforced this reputation.

The imm Cologne show, alongside the LivingKitchenshow held at the same time, drew around 138,000 visitors

to Cologne - an increase of 38% on the previous year. Theshow this year played host to 1,213 exhibitors from 48countries.

These results are testament not only to the increasingprominence of the Cologne fair within the wider Europeanand International furniture business, but also to the risingmood of optimism that now pervades the German furnituresector.

According to Dirk Uwe Klaas, Chief Executive of theAssociation of the German Furniture Industry (Verbandder Deutschen Mbelindustrie), "it was by far the best

furniture fair we've had in the last 10 years: more visitors,more contracts signed and an excellent mood. An excellentstart to the 2011 furniture year for our national furnitureindustry".

There was particularly good news for the wood furnituresector at the show. According to show organiserKoelnmesse, the trend towards increased emphasis onsustainable furniture design has meant that wood isbecoming more and more popular, not only for storage andkitchen furniture but for comfortable chairs and loungersand as a visible component of sofas. Koelnmesse go on tonote that wood is reclaiming its former status in the

furniture sector. One striking development: the manyitems featuring untreated oak, sometimes even completewith bark.

These comments lend credence to anecdotal reports bymarket participants that the German market for solid woodfurniture developed better than the rest of the Germanfurniture industry during 2010.

Oak continues to dominate at DomotexThe Domotex flooring show held in Hanover duringJanuary was less upbeat than the Cologne furniture fair, areflection of continuing high levels of uncertainty in the

European flooring sector. There was at least a feelingamongst participants that the market stabilised during2010 after the 20% decrease in sales during 2009, but fewwere willing to predict a stronger rebound during 2011.Market commentary at the show indicated that flooringdemand in Germany has been picking up this year in linewith broader economic trends while demand remainsweak in many other European markets.

Reports from the show suggest that the level of visitorswas quite low again this year and there were some largeindustry players absent from the exhibitor list. On theother hand, those visitors that did attend seemed intent on

doing business. Overall there were 1,350 flooring-covering exhibitors from 70 countries and around 40,000


15/20


visitors from 87 countries including 60% outsideGermany.

Oak remained very dominant within the wood flooringsection, an observation well aligned with data produced bythe European Parquet Flooring Association (FEP) whichindicates that oak now accounts for nearly two thirds of all

wood flooring production in Europe. Considerable effortshave been made in recent years to broaden the range oflooks available in oak by means of various treatmentsincluding staining, scarifying, oiling, and charring. Thisyear at Domotex there was a particularly strong focus onlooks which appear natural and used.

According to FEP, tropical hardwood now accounts foronly around 10% of European production. Tropicalhardwoods were not widely displayed at the show andthere was a feeling amongst some participants that thesespecies are on a downward trend in the European flooringsector. This is partly due to oak continuing to consolidate

its leading market position, partly to sustainabilityconcerns, and partly to a growing preference for morereadily available local sources of raw material supply.

The trend observed in previous shows towards wider andlonger boards was again in evidence at this show. Inaddition, there seems to be a continuing shift away fromsolid products in favour of engineered wood flooring.Suppliers of laminated products with artificial non-woodsurfaces were out in force, some with large high-profilestands and exhibiting products of such technical qualitythat it is becoming increasingly difficult to differentiatefrom real wood.

Russia agrees to reduce log export taxesThe Russian government made a formal commitment toreduce log export taxes at a meeting with European traderepresentatives on 7 December 2010. Russia made thecommitment alongside various other trade measures - inexchange for EU agreement to end its veto of Russianmembership of the World Trade Organisation (WTO). Theagreement removes the last significant obstacle in the wayof Russias formal accession to the WTO.

The announcement of the decision to reduce log exporttaxes seems to represent a major reversal of policy by the

Russian government which had previously aimed tointroduce swingeing tax levels so as to eradicate the logexport trade and help boost domestic processing.

Russian log export taxes currently stand at 25% of theinvoice value or at least Euro 15 per cu.m on softwood andbirch logs with a diameter of greater than 15 cm (birchlogs with diameters below 15 cm are currently free ofduty). Duties of 10% of the invoice value or at least Euro 5per cu.m apply to poplar, eucalyptus and other hardwoodlogs.

Taxes had been due to rise to 80% of invoice value or at

least Euro 50 per cu.m in January 2011. This increase willno longer be imposed and taxes will remain at their current

level at least until Russia has acceded to the WTO, nowexpected some time before the end of 2011.

The level of taxes after Russias accession to the WTO isstill not clear. Drawing on conversations withrepresentatives of the Finnish Forest Industries Federation,EUWID reports that the Russia-EU agreement provides

for halving of the present duty on softwood logs and a75% reduction in the present duty on hardwood logs.

Other observers of the Russian market are more scepticalof the reality of the apparent policy change. Bob Flynn,Editor of the RISI Wood Biomass Markets newsletter([email protected]), comments that certainly there hasbeen no change in Russia's policy to push greater domesticprocessing for its timber Prime Minister Putin was in theRussian Far East on December 6 [2010], where he statedthat in seven or eight years all of the timber harvested inthe region would be processed within the country. Flynnalso points out that Canada and the USA, both long-term

WTO members, have restrictions on log exports and thereis in fact nothing to stop Russia from imposing a ban onlog exports even after it joins the WTO.

The Netherlands Sawnwood Prices

FOB (Rotterdam)Sapele KDIroko KDSipo KDDRM Bukit KDDRM Seraya KDDRM Meranti KD Seraya MTCC cert.Merbau KDSapupira (non FSC) KDSapupira (FSC) KD

Anti-slip decking AD C&F RotterdamSelangan batu

US$ per m3

903111510959189259391208946

1483

1497

UK Log Prices

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

per m3

350-380250-270320-340410-450340-370

UK Sawnwood PricesFOB plus CommissionFramire FAS 25mmSipo FAS 25mmSapele FAS 25mm

Iroko FAS 25mmWawa FAS25mm

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

GB Pounds per m3

495-505680-715570-590

695-715290-310

375-400565-585935-970640-680

UK Plywood and MDF PricesPlywood Panels 8x4, CIFBrazilian WBP BB/CC 6mmMalaysian WBP BB/CC 6mmChina (hardwood face, eucalyptus core)18mm

China (tropical hardwood face, poplar

core) 18mm

US$ per m3

560-580555-575370-380

350-365
mailto:[email protected]:[email protected]


16/20


Report from North America

US tropical timber imports

Sawn hardwood imports rose in NovemberNovember 2010 imports of sawn tropical hardwood were21,765 cu.m., up by 21% from 17,941 cu.m in August.Sapelli was the top species imported in November (4,667cu.m) followed by balsa (3,641 cu.m) and ipe (3,071cu.m). Imports of most species increased from Octoberwith the exception of virola, balsa, acajou dAfrique,padauk, aningre and iroko. Ipe imports from Brazil soaredto 2,876 cu.m in November.

US tropical hardwood sawnwood imports. Monthly importvolumes

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Volumeinm

Ipe Brazil Keruing Malaysia

Acajou d'Afrique Cote d'Ivoire Acajou d'Afrique Ghana

Sapelli Cameroon Mahogany Bolivia

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

While the main exporting countries (Ecuador, Brazil, Peru,Ghana, Cameroon and Malaysia) shipped less sawnhardwood to the US in November, other countries morethan made up for it by sharply increasing exports, amongthem Europe (Germany, Italy) and the Congo Brazzaville.

Year-to-date, import volumes of tropical sawnwoodincreased by 17% compared with 2009. Among thespecies that gained significantly in the period to November2010 are acajou dAfrique (+64%), red meranti (+56%),sapelli (+52%) and keruing (+48%).

US tropical hardwood sawnwood imports. Monthly importvolumes

0

5,000

10,000

15,000

20,000

25,000

No

v-09

De

c-09

Ja

n-10

Fe

b-10

Mar-10

Apr-10

Ma

y-10

Ju

n-10

Jul-10

Au

g-10

Se

p-10

Oct-10

No

v-10

Volumeinm

Ecuador Brazil Peru Ghana Malaysia Cameroon All Other Source: Department of Commerce, U.S. Census Bureau, Foreign TradeStatistics

Us tropical hardwood sawnwood imports. Import volumesyear-to-date, November 2009 and 2010

0 10,000 20,000 30,000 40,000 50,000 60,000

Aningre

Iroko

Padauk

Teak

Jatoba

Red Meranti

Virola

Cedro

Keruing

Mahogany

Sapelli

Other tropical

Ipe

Acajou d'Afrique

Balsa

Volume in m

2010

2009

+64%

+14%

-8%

+52%

+48%

+36%

+56%

+85%

-33%

+59%

+2%

+8%

-64%

+8%

+8%


The average unit value of imported tropical sawnhardwoods (in US$ per cu.m) has not changed

dramatically over the past two to three years, but whenlooking at unit values by species a few trends emerge. Theunit value of ipe sawnwood has been more volatile than ofany other major imported species. Throughout 2010 itwent up considerably, while it remained stable of declinedfor most other species. Imports from Africa such as sapelliand acajou dAfrique showed a declining trend in 2009and 2010. Monthly unit values of the major importedspecies up to November 2010 are shown below.

US tropical hardwood sawnwood imports. Monthly unit valuesin US$ per cu.m

0

500

1000

1500

2000

2500

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

US$/m

Average Balsa Acajou d'Afrique Keruing Sapel li Ipe


Hardwood plywood imports set to exceed 2009volumesUS imports of hardwood plywood are set to exceed 2009volumes by about 30%, based on year-to-date Novemberimports of US$1.1 billion. Shipments from Malaysia andIndonesia saw the highest growth rates, while Chinaaccounts for 56% or US$634 million of total imports year-to-date. In November 2010, imports from China wereUS$49.1 million (+27% year-to-date) and from IndonesiaUS$12.8 million (+79% year-to-date). November imports

from Malaysia were US$2.48 million (+134% year-to-date), from Ecuador US$1.92 million (+45% year-to-date),and from Brazil US$1.88 million (-3% year-to-date).


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US hardwood plywood imports. Monthly import values

0

20

40

60

80

100

120

140

160

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

ValueinM

illionUS$

China Indonesia Canada Russia Malaysia

`


Hardwood moulding imports surge

Imports of hardwood moulding imports increased toUS$18.4 million in November, an impressive +24% fromOctober. Year-to-date imports increased by +8% toUS$173.4 million compared to 2009. Brazil was thelargest supplier in November 2010 at US$6.6 million(+2% year-to-date). Imports from China were US$5.6million (+23% year-to-date). Malaysia supplied US$1.4million (+24% year-to-date) and Indonesia US$704,000(+30% year-to-date).

November imports from Brazil of jatoba moulding wereUS$2.3 million (-13% year-to-date), of cumaru mouldingUS$557,000 (+1% year-to-date), and of ipe moulding

US$778,000 (+2% year-to-date). Supplies of cumarumouldings from Peru went up in November toUS$389,000 (+259% year-to-date). Mahogany mouldingimports from Peru were US$154,000 in November (-21%year-to-date). Jatoba continues to account for the bulk oftropical hardwood moulding imports, although the valueof imports year-to-date is down by -7% compared to 2009.Cumaru moulding imports are up by +41%, while ipe andmahogany moulding imports are down compared to thesame period last year.

US hardwood moulding imports. Monthly import values

0

5

10

15

20

25

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

ValueinMillionUS$

China Brazil Canada Malaysia Indonesia

Italy Peru All Other


Hardwood flooring imports far below 2009 levelsHardwood flooring imports recovered from yet anotherdrop in October 2010. In the year to November, UShardwood flooring imports totaled US$15.5 million, -32%compared to the same period in 2009. However, mosttropical suppliers were able to increase flooring exportsduring the same time frame. In November, shipments fromall major suppliers increased with the exception ofCanada. Hardwood flooring imports from China wereUS$528,000, from Brazil US$452,000 and from MalaysiaUS$454,000. On a year-to-date basis, imports from Brazilincreased by +8% from 2009, Malaysian exports increasedby 28%, Indonesian exports increased by +17%, whileChinese exports to the US are down by -63%.

US hardwood flooring imports. Monthly import values

0.0

0.5

1.0

1.5

2.0

2.5

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

ValueinMillionUS$

China Brazil Malaysia Canada All Other


Canadian bill for wood use in public buildings fails

voteThe bill (C-429) was introduced to amend the PublicWorks Act in Canada so that wood becomes the preferredmaterial in the construction or repair of federal publicbuildings. The bill was brought in by a Member ofParliament from Quebec where the forest industry hassuffered greatly from the US housing market crash and thestrong Canadian dollar. Similar government initiativesexist in Quebec, British Columbia and other countries,such as Japan and Sweden. However, the proposedchanges faced opposition from the construction industryand in the end, the bill was defeated in parliament inDecember 2010.

US 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 Douala

Sapele (Cameroon) 4/4 to 8/4 FAS KD,FOB Douala

Nov-10US$ per

cu.m2450

2475

-

-

790850770

870

Nov-10US$ per

cu.m2550

2600

-

-

790850770

870


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Internet News

Below are web links to news items published by the press.These items do not necessarily reflect the views and policiesof ITTO.

Long-term, Chinese wood fiber demand is expected togrow by 10% annually and the current domesticproduction shortfall is approx 40%. This gap is metthrough imports of wood fiber, logs, and finished lumber.Over the next several years, domestic wood fiberproduction will increase, but not sufficiently to fill the gap.In volumes, there is currently a 100 million cu.m shortfallthat is anticipated to grow to 150 million cu.m in fouryears.http://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-land

China's central government, to rein in property buyingfrenzy, raised the minimum down payment requirementfor the purchase of a second home to 60% of a property'svalue, from previously 50%. The decision, announced in astatement released after an executive meeting of the StateCouncil presided over by Premier Wen Jiabao, is expectedto cool down the red hot housing market. Recently,spurred by a few local governments' decision to levyproperty tax on new housing, such as in Shanghai,residents there have rushed to purchase homes, and pushedlocal housing prices to new highs, which has drawnincreasing complaints from the public.http://english.peopledaily.com.cn/90001/90778/90862/7273739.html

A new study issued by some of the world's top experts onforest governance finds fault with common internationalunderstanding, and helps explain their failure to stoprampant destruction of the world's most vulnerable forests.The report suggests that global efforts have too oftenignored local needs, while failing to address the mostfundamental challenge to global forest management thatdeforestation usually is caused by economic pressuresimposed from outside the forests.http://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/

Wood panels in the last few years have gained mileage aspreferred materials used for decorative purposes incladdings, floorings, roof sheathing, internal linings,ceilings and construction purposes. Diverse types of woodbased panels are accessible for interior and exteriortreatments. Wood panels find extensive application in theconstruction sector, which accounts for over 60% ofconsumption. Use of panels in cabinets, doors andwindows witnessed robust growth until 2008.http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/12/prweb8058152.DTL

Researchers from Germanys Fraunhofer Institute forWood Research are hot on the trail of a new mineral-basedformula that would enable plywood walls, cabinets, andother building elements to eat their own formaldehydeemissions. The breakthrough could help bring an end toindoor air quality issues, such as the health problems thatbeset survivors of Hurricane Katrina, who were housed in

new trailer homes filled with fume-emitting compositewood products.http://cleantechnica.com/2011/01/11/new-plywood-will-clean-the-air-instead-of-polluting-it/

In the worldwide poll of 1,201 CEOs, 48% said they werevery confident" of growth in the next 12 months. That's amajor shift from the 31% last year who were "veryconfident" last year and approaches the 50% reached in2008 before the onslaught of the economic crisis. In total,88% of CEOs said they now have some level ofconfidence for prospects in the next 12 months, up from81% last year. Longer term, 94% now are confident of

growth three years from now, an increase of twopercentage points.http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021

2K Manufacturing, the Luton based company that haspioneered the environmentally-friendly EcoSheet, hascommenced full production. The first orders amounting toover 8,000 sheets have been placed.http://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.html

Booming Vietnamese export turnover of furniture sector in2010 and the recovery of key markets encouraged localexporters to set this years target at US$4 billion, anincrease of 30% from last year. First, sales in key marketsare all on the rise, with the US increasing 15% and theEurope rising 8% last year. Local furniture makers are alsoentering new potential markets including Russia andMiddle East.http://www.saigon-gpdaily.com.vn/Business/Economy/2011/1/89230/

Disclaimer: Though efforts have been made to keep prices nearto accurate, these are published as a guide only.ITTO does not take responsibility for the accuracy ofthis information.
http://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-landhttp://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-landhttp://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-landhttp://english.peopledaily.com.cn/90001/90778/90862/7273739.htmlhttp://english.peopledaily.com.cn/90001/90778/90862/7273739.htmlhttp://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/12/prweb8058152.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/12/prweb8058152.DTLhttp://cleantechnica.com/2011/01/11/new-plywood-will-clean-the-air-instead-of-polluting-it/http://cleantechnica.com/2011/01/11/new-plywood-will-clean-the-air-instead-of-polluting-it/http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.saigon-gpdaily.com.vn/Business/Economy/2011/1/89230/http://www.saigon-gpdaily.com.vn/Business/Economy/2011/1/89230/http://www.saigon-gpdaily.com.vn/Business/Economy/2011/1/89230/http://www.saigon-gpdaily.com.vn/Business/Economy/2011/1/89230/http://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.mhwmagazine.co.uk/LatestNews/2K_Manufacturing_commence_full_production_of_environmentally_friendly_EcoSheet-8264.htmlhttp://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://www.bi-me.com/main.php?id=50586&t=1&c=5&cg=3&mset=1021http://cleantechnica.com/2011/01/11/new-plywood-will-clean-the-air-instead-of-polluting-it/http://cleantechnica.com/2011/01/11/new-plywood-will-clean-the-air-instead-of-polluting-it/http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/12/prweb8058152.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/12/prweb8058152.DTLhttp://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://www.biosciencetechnology.com/News/Feeds/2011/01/industries-new-study-suggests-global-pacts-like-redd-ignore-p/http://english.peopledaily.com.cn/90001/90778/90862/7273739.htmlhttp://english.peopledaily.com.cn/90001/90778/90862/7273739.htmlhttp://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-landhttp://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-landhttp://seekingalpha.com/article/248630-sino-forest-s-lush-outlook-higher-fiber-yields-faster-growing-trees-more-land


19/20


Main US Dollar Exchange RatesAs of 04th February 2011

BrazilCFA countriesChinaEUIndia

IndonesiaJapanMalaysiaPeruUK

RealCFA FrancYuanEuroRupee

RupiahYenRinggitNew SolPound

1.6734481

6.55850.7358

45.5789

899382.20

3.04322.76850.6212

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 200 7 to Feb 2 011

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

Braz ilian real Indones ian rupiah

Jan 200 7 to Feb 2 011

Abbreviations and Equivalences

LM Loyale Merchant, a grade of log parcel

QS Qualite Superieure

CI, CE, CS Choix Industriel, Economique or Supplimentaire

FOB Free-on-Board

CIF; CNF Cost, insurance and freight; Cost and freight

KD; AD Kiln Dry; Air Dry

BouleA log sawn through and through, the boards fromone log are bundled together.

BB/CC, etc.Log/plywood grades. Letter(s) on the left indicateface veneer(s), on the right backing veneer(s).Grade decreases in order B, BB, C, CC, etc.

BF; MBF Board Foot; 1000 Board Feet

TEU Twenty-foot equivalent unit

Hoppus ton 1.8 m3

Koku 0.278 m3

or 120 BF

SQ; SSQ Sawmill Quality; Select Sawmill Quality

FAS Sawnwood Grade First and Second

GMS General Market Specifications

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

OSB Oriented strand board

MDF Medium Density Fibreboard

PHND Pin hole no defect grade

$; US dollar; Price has moved up or down

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

Jan 2008 - Jan 2011

Index

The BSI (Baltic Supramax Index), published by the Baltic Exchange, is the

weighted average on 5 major time-charter routes. It is based on a 52,454 mtbulk carrier carrying commodities such as timber.


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itto_mis_report

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