The African export business over the past three months seems to have consisted largely of driving ahead in a straight line in cruise control. Any price changes have been confined to the most popular species and have mainly been very small and almost all upwards.
European demand has continued to be unremarkable and generally slow and is unlikely to improve significantly over the remainder of this year and the first quarter of 2014. Elsewhere, demand has firmed. Market leader China is much more active and demand from India is also continuing to recover after the recent nervous period when timber traders worried about exchange rates and perception that the government was poised to increase taxation. Further east, the large volume of inter-trading of timber between the Asia Pacific countries is also good and growing steadily.
Although there is much increased competition from Malaysian meranti in the Middle East markets, African exporters report steadily increasing business and stable prices. Okoumé is the most active sawn lumber, with prices tending to move up again by around €10/m³ in the past month. Okoumé has lost ground in the South African market where meranti has regained its previous dominance, sharing with the locally-grown plantation pines.
Current trading levels are basically unchanged. The few price changes that have occurred have been quite firm and mostly species for France and other mainland European countries – bilinga, movingui and moabi have improved by around €10/m³ on very steady demand. Azobe has been variable but is now more in demand as buyers are less inclined to take okan as an alternative. Ayous/obeche has been firmly priced as a staple buy for Italy and UK while iroko prices also have fluctuated with variable demand but ended up unchanged from earlier in the year. As mentioned in our previous report, producers and exporters are concentrating more actively on markets other than Continental Europe and prices are generally very firm.
Tighter government control
While sales may have been less of a problem than usual, producers have been grappling with more difficult log supplies and much tighter control by government forestry authorities. Cameroon was hit by a very heavy rainy season, now almost over, and that has caused disruption in forest operations, leaving sawmills struggling to source enough logs to keep production going.
Gabon’s minster for forests has been active in ensuring all operators follow regulations to the letter of their agreements. For the second time this year the government has taken back a very large concession because of the operator’s non-compliance with the agreement, and the concession areas have been swiftly reissued to other producers.
Prices for sapele have held firm, demand is high and supply reduced because the Central African Republic (CAR) is still suffering internal unrest. This uncertainty, plus the problems at the border crossing into Cameroon, have led to reports of no stock of sapele from CAR available at the port of Douala.
Other reports are of continuing log and lumber exports from Equatorial Guinea, destined, it is believed, for China.
Still on the supply side, Congo Brazzaville recently hosted a timber conference to set out and issue a forest policy for future development of the resources and the industry. The government is keen to encourage appropriate and sustainable utilisation of the vast forest resources, particularly in the north, laying emphasis on eliminating illegality, ensuring there will be processing facilities and, most importantly, providing employment for young people in remote areas where there is no other source of income. Already one major overseas operator is building a large sawmill complex and others are engaged in discussions on further investments. There is also interest from new investors in establishing oil palm plantations, although it is said that the World Bank and green lobbies are now less keen for countries to bring in new oil palm development as this usually entails forest clearance rather than the more eco-friendly sustainable harvesting by timber companies.
It is clear that during times of low consumption in Europe most buyers concentrate on a very small number of favoured timbers. No-one wants to speculate on a less familiar species that end users have to be persuaded to try.
On the supply side, producers too are obliged to maintain cash flows by responding to this restricted demand, even though over the medium and long term this cannot be sustainable, given the normal mix of species in a forest. The strong efforts made in the past to introduce lesser-used tropical timber species to the market seem to have fallen away almost completely, although one or two exporters in Gabon have succeeded in marketing a mix of similar coloured species selling as ‘Red’ at a very competitive price to buyers in the Middle East.
Otherwise there seems no longer even a mention of the problem of lesser used species. It is perhaps unfortunate that the African countries have never formed a trade organisation similar to highly successful bodies such as the Malaysian Timber Council and the American Hardwood Export Council that could represent African forest industries globally and promote the greater use of diverse species and counter unwarranted adverse publicity. There is the African Timber Organisation, of which all the West and Central African major producer countries are members. However, its listed aims refer almost entirely to forestry matters, with no mention of the timber industry, which is the vital component necessary to generate and realise the value of the forest resource, providing employment, overseas revenues and paying taxes. By refreshing contrast, the recent Congo Brazzaville Declaration sets out clearly the need for and outline of conditions for the development of timber industries.
