Many years ago the Daily Express ‘Beachcomber’ column recommended "Don’t look back, something may be gaining on you".
Good advice, but at the start of a new year perhaps it is useful to check on how the previous year’s business evolved.
In 2013 the biggest news for the timber industry was, of course, the introduction of the EU Timber Regulation (EUTR). The higher import volumes in advance of the March 3 deadline did cause a significant pause in new buying but did not seriously affect prices,
which continued the remarkable overall stability that has been a feature of the market over the past couple of years. Price fluctuations have been limited and generally confined to a very small number of the popular species. Possibly one of the most significant West and Central African market factors has been European buyers’ increased concentration on just a handful of the favourite timbers.
Lumber prices
Sipo hardly moved at all through last year and prices are virtually unchanged, but sapele came very much back into fashion and demand has been stronger, particularly as China is now a buyer of sawn sapele. Prices are around €60/m³ higher than in January last year. Another big mover was padouk, another species in demand in China. On/off demand from Indian buyers created some very large price changes, moving between €50-100/m³, although currently prices have ended up at the same level as this time last year.
Doussie lumber was in very high demand throughout 2013 and is now as much as €150/m³ above this time last year. Azobe is another timber that saw some ups and downs but is now just around €20/m³ higher. Iroko managed a rise of €30m³, as has khaya which has been in rather better demand through 2013. Moabi was in steady demand for French buyers and overall France was possibly the most consistent of the European buying countries for logs and lumber last year.
Another good earner for markets other than Europe is okoumé. Both log and lumber prices have been strong and rising.
Early in the year there were huge price gains for bubinga, which is much favoured in China for making expensive tabletops but trade ended when Gabon banned exports. There were hints that Chinese manufacturers may set up facilities in Gabon to manufacture and export the tabletops but so far there is no more news on this.
The majority of the less popular, less traded species at best managed to gain around €10/m³, however, many ended the year unchanged in euro terms although as the euro has appreciated against some major currencies, there could be a net gain for exporters. As with lumber, many log prices have moved less than might be expected and there have been very few gains for the less popular timbers over the past 12 months and more. For padouk logs there were similar large variations as for the sawn lumber, although now there is little change on the year.
Okoumé sawn lumber has grown in popularity and pressure from China as a constant strong buyer of okoumé logs raised log prices by €90/m³ by the end of the year.
Movingui logs were also in good demand and current prices are around €40 higher. Acajou is in steady demand and now €20 up. Okan log prices have varied because of inconsistent demand and have now probably reached a steady level at just €20 higher. Azobe logs are up by some €30/m³, as are ovangkol logs, while andoung has been and is still in steady demand and now €50/m³ higher than in January 2013.
Many African mills have complained of log supply problems. Cameroon was badly affected in the fourth quarter when a severe rainy season curtailed logging and transport. Log exports have continued and it appears the export quota system was somewhat relaxed but is expected to be more strictly enforced soon. Log transport distances have increased as the nearer forest areas are in the rotation phase.
In Gabon, operators closed sawmills because of shortage of logs, created, reports say, by strict government controls on the size of the annual allowable coupes and the allowed rotation period. Some concessionaires say the measures will not produce sufficient logs to feed their mills’ full processing capacity. These restrictions also mean more difficulty in producing enough of the most sought after species. Where companies have not kept to the terms of the approved forest plans the government has not hesitated to confiscate concessions and re-allocate to those that do comply with the rules.
Ghana once more stepped up efforts to control the chainsaw loggers, and here also processors report increasing difficulties with log supplies. The government is looking at ways to adjust tariffs to facilitate some log imports and the marketing thrust for the larger producers is moving steadily to exports of processed products to neighbouring African countries, already important markets.
Impact of EUTR
If all adverse publicity alleging vast illegality in the timber trade is to be believed it would have been expected the imposition of the EUTR would have brought business to a standstill. What happened was that exporters had to spend considerable time and money producing comprehensive paperwork and governments had to enter into complex,
expensive and protracted negotiations to ensure compliance. The full ramifications of this far-reaching regulation are yet to emerge but there is perhaps one area where the timber industry may find reassurance and that is that wild allegations of illegality are no longer enough; they now have to be backed up by proof sufficient to stand up in a court of law. One effect of the EUTR has been a positive inducement for West and Central African exporters to market their timbers more aggressively into non-EU markets and this has been very successful.
For this year the outlook tends to look like much of the same. European markets seem unlikely to show any solid resurgence of major government or private infrastructure projects, certainly in the first half. Temperate, palecoloured hardwoods seem to be in demand but, if fashions should change, the consumption of tropical timbers in Europe may decline more slowly, although forecasts are that the decline is likely to continue.
