Following a rather lean period in the first quarter, global markets for West and Central African exporters have managed a slow but very steady recovery, led and supported to some extent by more active buying by Chinese importers.
That said, the recovery is quite general, covering almost all the major importing countries and applies to volumes as well as prices. This has reinforced overall price stability and enabled African exporters to achieve some modest price increases for sawn lumber in a limited number of the more popular species whenever a surge in demand imposed pressure on production.
A few log prices have changed through the first half year. Okume log prices in particular have moved higher as China resumed moderate and regular purchases.
Tali, niove and padouk logs also made gains. African log prices are very firm mirroring the recent rise in prices of Malaysian logs due to lower harvest volumes and higher costs and charges.
Log production in the major African producer countries is being much more tightly controlled and monitored and governments continue to press for more in-country processing. An example is Gabon where there has been considerable new investment based on the Special Economic Zone where a number of Indian owned companies have installed new facilities and begun production of veneer.
This has put pressure on availability of okume peelers, prompting the government to remove the long term ban on harvest of ozigo as an alternative.
Although UK tropical log imports are next to nothing (just 12m3 in 2016 worth US$8,701), the price levels reported do help to indicate the eventual costs of producing sawn lumber and other wood products.
Producers are well aware that UK importers are very selective and by paying top prices they expect only the very highest quality lumber. The UK designer fashion has been for several years concentrated on light coloured hardwoods, while African species appear to suffer from lack of a concerted marketing campaign to promote to architects and designers their more colourful species.
Latest news from Gabon is of the Minister for Forests dismissing a number of top officials including the department’s director general. Observers are questioning if this shake-up of senior executive heads of department may possibly in some way be connected with controversy over the alleged questionable exports of bubinga/kevazingo.
In other news, Gabon has a specific organisation funded by the US and EU, which monitors the country’s eleven National Parks. A recent inspection in the eastern region discovered some companies logging illegally in National Park areas. A number of company managers were imprisoned.
These examples and the tightening of log export quota controls in Congo Brazzaville indicate clearly that governments in the region are taking firm action to identify and punish companies and officials that fail to comply with forest regulations.
Further news in Gabon has included an US$18m deal between the country and the Central African Forest Initiative to protect over 23 million ha of tropical rainforest.
The deal is designed to help towards Gabon reducing its greenhouse gas emissions by 50% by 2025.
The agreement is a signal showing Gabon’s desire to honour its commitments under The Paris Agreement (Climate Change).
Since February/March, China has resumed more significant purchases of okume logs, especially peelers, but importers say that they do not expect that volumes will ever return to the massive shiploads of previous years and many have switched over to okume sawn lumber. Gabon does not permit log exports and anyway the in-country demand, plus the greater interest in exports of sawn lumber means there is a limit of spare capacity to produce more logs.
This means buyers must look elsewhere for a supply of okume logs.
Chinese buyers have recently been strongly interested in okan, tali, bilinga and padouk. Belli has had an up and down price roller coaster over the past months and currently is on the low side. Andoung prices have firmed up and standard & better grade niangon is around €20 higher since mid May.
Business in larger sizes that are now known a ‘slabs’ has continued to accelerate, China being the strongest buyer. The most sought after is bubinga/kevazingo with 100mm x 200mm – a popular dimension but other even larger slab sizes are in demand.
There is also trade in slabs of okan, bilinga and gheombi (mixed red species) and also dabema in a variety of dimensions including 150mm x 150mm and even 200mm x 200mm. Biggest buyer is China again but there is some interest from other markets.
Buying for India has improved to a lesser extent but as usual limited to only one or two African species such as padouk where there is competition from Belgian importers, and another favourite being tali which has recently increased in price.
Ayous is in demand for China, Italy and UK, sapele also for UK but sipo sales are slow to France and Belgium. As forecast, volume business with France has improved in the second quarter and producers feel the result of the recent presidential election will further stimulate the economy and the construction industries in particular.
Middle East business is brisk, the previous strong price competition between African and Malaysian species appears to have died down to some extent, possibly because of the higher cost of logs reducing margins but also could be due to contractors looking for better quality timber even at the low grade end of the scale. Importers in this region distribute timber and products far and wide and clearly there is a vast potential market available for rebuilding towns and villages when conflicts end.
Elsewhere in continental Europe, timber business is in a positive mode but efforts to promote increased use of tropical timbers have had little effect with specifiers putting out the usual unjustified claims that technical data on properties and uses are not available.This is quite wrong and many libraries and certainly researchers and universities have in depth information. Consulting one of the many books on tropical timbers by Bolza and Klute will provide total technical analysis and properties of at least 500 tropical timbers. Producers consider that market prospects for the third quarter are very positive.
There might be a minor slow down during the July continental vacations but there is confidence that the UK Brexit will not affect timber business. Also, softwood prices are on an upwards trend and likely to support overall timber trading stability.
