The past three to four weeks have seen a sudden change in the West African log trade. The long stand-off between buyers for China and exporters in Gabon, Cameroon and other countries ended with buyers accepting increased prices and higher freights. Buyers held back major purchases for almost three months in the hope of depressing prices, a situation exacerbated by a fall in vessels calling at West African ports due to trading pattern changes in coal and other bulks.

Earlier in the year, Gabon’s state log selling organisation the SNBG had asked log producers to reduce output, while Cameroon delayed authorising certain cutting rights and encouraged further processing. Exporters were also aware of the tightening log supply in the Asia-Pacific region and held firm in spite of obvious difficulties caused by reduced trade. Current availability of okoumé from Gabon is down to 40,000-60,000m3 per month from previous levels of 80,000-100,000m3. Local veneer and plywood mills are busy and taking more okoumé, returning log prices to previous levels. Many processing mills have transferred operations closer to the source of their raw material. French timber companies have always been active in the region and have closed down processing at home to produce plywood and veneer in Gabon and Cameroon. Difficulties in some operations in Cote d’Ivoire and Liberia are ongoing.

The previous problems of freight seem to have alleviated, and rates for China have now dropped marginally to US$77- 82/m3 for okoumé and US$110/m3 for red species. Some charter vessels are now available for shipments to Europe and freights have dropped from €82/m3 to €77/m3. Ro ro freight for lumber to Europe is €49/m3.

There have been a number of log price rises, although not across the range of species, and buyers are taking up volumes of previously poor-selling lower grades. Sipo is up €15/m3 for LM and B grades though demand is still low. Sapele and iroko are now stable after recent rises; azobe LM is up €8/m3; bibolo LM is up €7/m3. Moderate gains in the month were moabi with LM grade up €33/m3 and B grade €23/m3 higher, and movingui plus €16/m3 for LM and €15/m3 for B grade. Peeler species, including ayous, are in demand for China and prices are firm but unchanged.

Complaints about higher taxes on timber and products are rife. It is reported some foreign-owned mills in Cameroon are closing or cutting output and a veneer and ply mill is moving from Cameroon to Gabon. But all governments in the region are raising taxes on timber concessions and exports, with Gabon introducing a new felling tax in January.

West African export lumber prices continue stable, firm and unchanged. Overall, order levels are said to be good and demand and supply appear in balance so there is no pressure for price changes and, in spite of the export log price rises, there have been no increases for lumber. But following hikes in taxes and log costs, mills may soon have to push for better returns.

Few gains in lumber

A comparison of lumber prices at the end of July 2003 with those end February 2004 showed few gains. Abura, bosse, douka/ makore, iroko and padouk all rose slightly, but other species barely moved. Ayous and even sapele were down but have since recovered due to demand for the former from Germany, Italy and the UK for the ayous, and in all markets for sapele.

European buyers report slow trading conditions but stocks, especially of logs, are relatively low and supply only just adequate. Current log output is not sufficient to allow buyers for China to make up the volumes of okoumé logs lost through their low purchase policy in the first quarter. As a consequence, West African exporters and traders are feeling more optimistic than they were only a month ago when shipping problems were at their height. The rise in log prices and the very firm market sentiment, coupled with buyers for China resuming normal operations, have transformed what was a very depressing picture a month ago.

Elsewhere in the region, latest reports indicate that Equatorial Guinea’s forest resources will not be able to sustain high levels of log exports for an extended period. But the problems of civil unrest in Central African Republic seem to be less prominent and exports of lumber through Douala port will continue.

Congo Brazzaville is steadily building up production and log exports though it seems likely the operations through Pointe Noir will not return to the large volume throughput of former years.

Ghana continues its long-standing policies to restrict total harvest volumes to sustainable levels and to move the country’s timber companies into further downstream processing.