Log markets are particularly quiet and there have been no export price changes for West African logs during the past couple of months. There has been a small rise in mahogany log prices which are in the main for local sawmill consumption. Even the very popular Gabon okoume is struggling to hold prices at current levels, as major buyers for China are able to source from Congo and Equatorial Guinea.

The rains in Gabon are over and logging is being geared up to higher production levels, while in Cameroon rains are already in progress and sawmills are hoarding logs to carry through the next couple of months. Cameroon banned the export of some 21 species in log form two years ago and recently added azobe and ayous to the list. This strategy appears to have been successful as sawn and further processed lumber has kept processing mills busy through the past several months and currently there is full production for export and domestic contracts.

The civil unrest in Cote d’Ivoire has restricted the supply of logs from the northern region to mills in the south and at least one major foreign owned azobe sawmill is having to curtail production because of a log shortage. In anticipation of these difficulties and with the need to satisfy the existing demands it is reported that at least one large mill in Cameroon has stocked up with something in the order of 20,000m3 azobe logs.

Liberian exports halted

The escalation of the civil war in Liberia has finally caused a halt to timber exports. As a consequence, log producers and mills in Gabon and Cameroon are expecting to benefit from higher sales to buyers of Liberian niangon who will now most likely turn over to sapele as an alternative. Suppliers of sapele logs and lumber report they are well able to meet demand and it is known there are adequate stocks of sapele in Continental Europe, if not in the UK.

West African traders noted the reported upwards trend in log prices in South-east Asia but with markets very quiet and the European holiday season beginning there are strong doubts that this will push prices higher globally. If this should lead to an increase in sawn meranti/seraya and product prices it is felt this will once again push buyers back to the traditional African species, all of which are in good supply at unchanged prices. Opinion is that any higher log prices could be confined to domestic sales for in-country processing, which is the same pattern as in West Africa where exporters have tried without success in the past months to push export log prices higher, while log prices internally for non-concession holder processing mills have risen almost to the same level as for export.

Freight costs

The expected increase in freight costs for timber from South-east Asia also contrasts with the West African rates, with shipping lines competing hard for business. This may be another source of benefit for exporters in the West African region.

&#8220The very depressed market conditions in the Netherlands are a particular concern for exporters”

The Gabon Forestry Department has begun to tighten up on the so-called Family Cuttings Permit system which allowed forest dwellers and smallholders the right to harvest logs on up to 1,500ha. Established traders complained this had caused problems with low quality, badly sawn timber being offered even for export. The new agreements to be introduced over the next four years will control logging more precisely and will require loggers to carry out reforestation on areas cut.

Once again, West African lumber prices have remained virtually unchanged through the past two months. Although mills in the region are busy with existing contracts, there are few buyers around and the enquiry rate is reported as very low to non-existent. Most mills are waiting to see if the problems in Cote d’Ivoire and Liberia will bring them new business for alternative supply.

The industry in Gabon continues to face problems in obtaining bank finance. Producers are gearing up production after the close of the rainy season but say that 70% of management time is spent dealing with government taxes, regulations and finance difficulties. Some mills are making pre-finance agreements with their European and Far East buyers as banks are unwilling to provide funds against forward contracts. Sales of okoume lumber are steady but share the same very dull market conditions throughout the region.

Lumber stocks in Continental Europe are reported elsewhere as being low but importers and traders say there is more than sufficient volume available for the current consumption levels. The very depressed market conditions in the Netherlands are a particular concern for exporters, with no prospect of immediate improvement.

In the past two years, some mills in Cameroon have followed Ghana’s producers and concentrated on developing further processed products for garden furniture and outdoor decking and patios. The growth in this area is to some extent compensating for the very mixed results from European furniture manufacturing.

Import tax waived

Ghana has announced it is waiving the 45% import tax on timber in order to help bridge the gap between the capacity of Ghana’s timber processing industry and the available timber supply. The forests minister pointed to the deficit in supply of timber for local processing and as part of the government support for the timber industry this relaxation is expected to bring in timber imports for processing and re-export which will help to maintain employment and timber export earnings.

The present West African situation is of stable prices, generally very slow new sales and the outlook for much of the same through the next two to three months. Sawmills continue to be busy on current contracts and expect to maintain this level of activity. Some mills are short of logs in some species but overall the log supply is adequate for demand. There are no signs of any sudden surge in demand through the European summer vacation period and no forecasts for price increases until the autumn when buyers begin to cover for the fourth quarter.

Exporters expect to hold prices steady as margins are very tight.