There have been few changes in West African logs prices during the past three months. In October iroko logs were slightly down in price, demand for azobe had virtually dried up and all other species had pretty well stagnated in both demand and price over the previous six months. By the end of November, iroko logs were in high demand and prices were rising; azobe also was by then in good demand and prices were expected to rise by the end of December.
Padouk was another species that had languished for several months then suddenly came into demand with rises of €16-18 for LM grade and €31 for B grade logs. European log demand continues to fall with the slack being taken up only by China.
Because of the various mergers and stock consolidation, chiefly in the Netherlands, European demand for both logs and lumber tends to be very intermittent and nowadays almost always triggers a short-term price rise. This was especially noticeable while the prices for meranti lumber were on the rise in the third quarter of 2002. These rises have slackened off but supply is low and there are indications of higher freight charges from Malaysia as early as January.
Financial problems
The major West African news is of the continued difficulties in Gabon where for two to three months or so the state timber buying and exporting company SNBG has not been able to meet its financial obligations to pay for the supply of logs from producers. Some producers, including three of the largest French owned companies, had ceased supplying SNBG until outstanding payments of several million US dollars had been cleared, but now resumed supply on a limited basis. Already by November okoume log prices had risen by US$10-15m3.
Low log supply
Reports say that as a consequence log supply is very low and the ports are virtually empty of logs for shipment. So far there are no indications of how this is affecting the major markets of France, Israel and China; however, it might be expected that China in particular will have to switch some supply over to Far East suppliers, Sarawak and Papua New Guinea. In fact there is news of a slight rise in SQ and up meranti logs and stronger enquiries for log supply from PNG and Solomon Islands.
The latest news is that SNBG’s board of directors has been reorganised and that PricewaterhouseCoopers has been appointed as financial adviser.
Log supply from Cameroon and Liberia is also low. Production from Cameroon is below normal for the time of year because logging companies are increasingly reluctant to pay the high tender prices to purchase concession areas under new regulations which allow only a restricted area of 2,500ha to be logged in any year. Loggers maintain that with the diversity of species in any given area the restrictions make logging uneconomic and some observers believe the government will have to consider a review of forest policies this year.
Reports are that the World Bank will advise Congo Brazzaville on matters affecting forest policy. It is assumed this will help to regulate logging areas and log production as part of the regional development towards long-term, sustainable harvest volumes. Cameroon and Gabon, together with Ghana, are already well advanced in control of harvest volumes and in developing further processing.
The International Tropical Timber Organisation (ITTO) has approved an US$800,000 project for the African Timber Organisation (ATO) to help “reinforce its existence as a regional grouping” and train foresters in sustainable forestry. Up to now, ATO has been very much underfunded by its member governments and as a consequence has had very little regional impact. Since ATO is an inter-governmental organisation it has to be wondered what connection there might be between ATO and COMIFAC – the grandly titled ‘Conference of the Ministers in Charge of Forests’ which has member countries Cameroon, Central African Republic, Congo Brazzaville, Equatorial Guinea, Gabon and Chad. It is said to have a funding base of over US$20m, with aims of linking priorities and programmes in forest management in these six countries.
Co-ordinated efforts
It has to be hoped that all those involved – ITTO, ATO, COMIFAC, World Bank, IMF, plus the international and national NGOs – all of them concerned with forest management in one way or another, will find time to talk to each other to co-ordinate their efforts and policies into a cohesive and effective future for the industry.
As with logs, almost all West African lumber prices have been unchanged through the fourth quarter of 2002. In spite of the reported very slack conditions in the Netherlands timber markets there has been some demand for azobe, iroko and padouk and shippers are asking higher prices for new contracts when current shipments are completed. Once again, the major buyer emphasis is on selected fixed size specifications rather than falling “and wider” sizes.
Trading is reported to be very slow in Europe. Sapele and the utile/khaya species are always in moderate demand and prices are steady after a slow and very gentle upward trend.
Ghana’s customers
The latest edition of the Ghana Gazette timber magazine has some interesting information on Ghana’s timber exports. Not least that the UK is no longer a major buyer, with only 10,441m3 of sawn lumber imported from January to September 2002. Surprisingly, neither is the Netherlands with 5,183m3 in the same period. The largest buyers were India, Senegal and Germany. The largest volumes were, as might be expected, wawa, followed by teak and ofram.
Ghana is currently emphasising the need for industry to develop much further into downstream products such as furniture and components. These are not easy markets to crack but no doubt in due time the ubiquitous rubberwood will begin to lose markets to more varied and colourful species. A group of furniture manufacturers and retailers in Scandinavia have claimed that rubberwood products should be banned, claiming that the boron treatment of rubberwood is harmful to health and the environment.
