West African producers and shippers have managed to hold prices steady yet again over the first quarter of 2001. This stability owes much to the loyalty of European buyers and end users who have continued to support their traditional African red and white species despite recent lower prices from competing meranti.

The influence of the relatively new operations managed by some of the larger timber groups from Malaysia, now well established in West Africa, has also diversified markets for African timbers. This is mainly in log exports to the Far East, particularly China, but they are working hard on sawn lumber with a view to supplying their existing Far East markets such as the Philippines and Thailand which will take large volumes of the lower grades of lumber.

Logging concessions

In Cameroon, log supply to sawmills is becoming tight and around 38 sawmills are closed temporarily. Log prices for mills are rising, partly because of the shortage and higher transport costs resulting from the limit on tonnage allowed on trucks.

Many of the newly established sawmills built as a result of the requirements for World Bank/IMF debt relief initiatives, do not have their own logging concessions and have to buy in logs from established concession holders – some of which themselves now operate sawmills. There is tight government control over the issue of new concession areas and these two factors also keep the price of logs stable, even on domestic markets. Most species sold internally for sawmilling have increased in price by 30% in the past year – although some have virtually doubled – causing a profit squeeze for the mills which have not been able to pass on the extra cost to their export buyers.

A good example of the ‘swings and roundabouts’ price influences is for ayous, where China is buying fewer logs but the local domestic market is buying logs for sawmilling and also the resulting lumber. In addition, Italian buyers have returned quite strongly to the purchase of traditional volumes of ayous lumber, after a slack winter. Although Italy is normally a market for log imports, taking only the paler/white species in lumber, there is a noticeable, steady trend towards imports of more lumber in all species, and fewer logs.

Sapele lumber prices are under some downwards pressure as both Spain and Portugal are fully stocked, and sipo also is finding lower demand because of a slowdown in the German economy and slightly less interest from other major European buying countries.

Sapele logs

Sapele logs continue to be freely available for export from Central African Republic (CAR) and from North Congo, through Douala port and prices are unchanged at around FFr1,800/m³ fob for LM grade, approximately US$244. Both sapele and sipo are banned from export in log form from Cameroon itself.

Export log supply through Douala is also steady in high quality sipo, sapele, anegré and doussie and some through and through sawn boules in sipo and iroko are also seen.

Although at least one of the larger Cameroon log producers has become active in North Congo and in CAR it is not expected that the log export volumes will impact greatly on the market because of the high cost of transport over the long distance to Douala and also that tight control of concessions in CAR where only five logging companies now operate.

&#8220Some Ghanaian entrepreneurs have already applied for land to establish bamboo plantations in anticipation of a prompt start-up of rural industrial and village based processing ”

Recent reports from Gabon indicate shipping delays, with port congestion leading to one shipping line increasing freight charges by just over US$10/m³. Ships are reluctant to wait for slow barging of sinker logs and most are loading only floaters, mainly okoumé, and leaving behind the mixed ‘bois diverse’ sinkers. Other shipping news is that three shipping lines have agreed to pick up sawn lumber in Mayumba, a cost saving for new mills in the area.

SNBG, the state-selling organisation for okoumé and ozigo, has some money problems and is paying exporters at three months instead of 60 days. It has increased the price of okumé logs by 1% and, while sales to Far East buyers are slow and stocks in owendo are rising, the outlook is good.

Azobe log prices and demand are lower because of adequate stocks at the major buyer, the Netherlands.

Steady progress

Ghana lumber and boules exports are maintaining steady progress but the recent increase in petroleum products prices is likely to impact soon, when producers may have to press buyers for some price increases. Some millgate log prices on the domestic market had fallen by US$3-4/m³ since October/ November 2000 but now seem likely to rise. Even at the new, higher price, petrol at the pump in Ghana is only just over £1 per gallon, about one third of the price in the UK. At the previous low price the government had been subsidising fuel prices at a cost of more than £22m each year – a severe drain on the economy. Another problem is that Ghana has virtually no reserve stock of petroleum products. Any delay in supply from the refinery means an almost immediate fuel shortage. The new government was aware the price increase would be unpopular but is determined to halt the economic decline, to encourage investment in industry and to support, but not interfere with, business.

Without doubt, Ghana is the most advanced country in the region in terms of progress towards sustainable forest management, including an already existing plantation scheme funded from taxes on timber operations. The scheme can provide investors with leased land, funding, expertise, advice and supervision to ensure a successful enterprise. Some Ghanaian entrepreneurs have already applied for land to establish bamboo plantations in anticipation of a prompt start-up of rural industrial and village based processing which is expected to result from an ongoing UNIDO project.

Price indications for sawn lumber have to be seen in the context of variations in quality, condition and specification and that markets in importing countries differ in their acceptance of ‘average’ within grade so that it is not always possible to compare like with like.

These compare closely with Ghanaian export prices where sapele and sipo are at higher prices, with wawa and makoré rather lower.

Unchanged prices

Generally for sawn lumber in the region, while buyers are exerting some downward price pressure, producers and exporters are not expecting price changes in the next month or two and all the export availabil-ity is being absorbed at prices which were largely unchanged during the first quarter.