You couldn’t call the first half-year trading as dramatic, more like just being very encouraging.

West and Central African exporters held their nerve on prices even through the usual slowdown period during the Chinese New Year vacations which fell very early this year and thankfully in the event did not seriously affect tropical timber trade flows in the region.

The overreactive media frenzy whipped up during the realignment of the economy in China died away and China continued quietly and firmly with adjusting to changed circumstances while maintaining economic growth at a rate still better than other developed trading nations.

As we reported in Chinese importers had in 2015 rather enthusiastically built up an overstock of some tropical timbers, notably okume logs but they too did not panic, holding on during a pause in housing and other construction during the economic realignment where exports fell but imports fell more strongly leaving China’s balance of payments even stronger.

The direction now appears to be more orientated towards improving domestic trading and infrastructure and timber traders slowly moved stocks into consumption and began gap-filling purchases of higher quality tropical timbers.

This included even some small volumes of peeler quality okume logs but the trend line now has moved more firmly onto sawn lumber and volumes have moved steadily upwards with prices largely unchanged since the beginning of the year.

Looking at the supply side, perhaps the hardest hit okume log exporter was the Republic of Congo (Congo Brazzaville), with Cameroon less affected and in any case with new log export restrictions as from January 1. Gabon does not export logs but had substantial stocks of unshipped okume lumber that has been slowly absorbed and processed locally.

Trade with European destinations and to the Middle East improved right through the first half and has been the backbone of price and volume support for West and Central African exporters.

At the same time buyers for China moved onwards and upwards from gap-filling to more serious regular if modest volumes as the months passed.

Equatorial Guinea seems to have picked up a large slice of the okume log business though Chinese importers have said that the tropical log trade is unlikely ever to return to the high volumes of previous years.

In perhaps a pointer for the future there is news of some increase in investment from China into Gabon to establish production of veneer from Gabon’s preferred, high quality okume.

In other news from Gabon, the government has put forward proposals for compulsory kiln drying of all export sawn lumber and also to establish a timber marketing board. The industry syndicate has protested that some buying countries do not want and would not pay the extra costs for KD and that for some uses in contact with water this is a waste of time and cost.

There are questions as to who would run a marketing board and how this would function.

In another initiative Gabon is considering a type of cooperative for small woodworking entrepreneurs, moving them collectively into a central well equipped factory, training operatives, providing design facilities to upgrade their products to significantly higher levels for both domestic and possible eventual exports of woodwork, parts and finished furniture. These proposals are now moving through the relevant government departments. In addition, Gabon has begun more strict inspections and controls on export containers, weighing and scanning – with the signifi cantly higher costs charged to the exporters.

This latest crackdown stems from attempts discovered by customs to conceal banned export timbers behind other materials. The Republic of Congo has appointed a new minister for forests following the retirement of the former minister.

Some months ago there had been news that the government was considering new controls to require concession holders and exporters to add a percentage of tertiary ‘downstream’ processing to their production. Currently there is a quota system regulating the allowed percentages of log and sawn lumber export. It is not known whether or not the new minister will take up the new processing concept.

In the marketplace the most remarkable feature is the ongoing price stability. There seems to be a fair balance between supply and demand although of course this is very much because producers have not re-opened some of the sawmills that were mothballed last year.

Logging too has been held in restraint and all this works for both producer and consumer to provide a consistent, settled trade fl ow.

African exporters have begun to follow Cameroon’s efforts and success in accessing the US market with sawn lumber, mostly khaya mahogany and sapele, while Gabon exporters have shipped samples of some premier and specialist timbers for evaluation by US buyers.

Gabon suggested that the much prized bubinga/kevazingo should be listed by CITES and this seems likely to take place in the near future.

The most competitive market has been the Middle East where African timber meets stiff competition from the traditional Malaysian suppliers, in particular at the low quality lumber end of the price scale and there was some price weakness in this market in spite of higher log prices and tightening supply in Malaysia.

MLH dropped as much as US$40/m3 but recovered now to only US$20/m3 less than this time in 2015. It is certain that sawn okume and the mixed African gheombi mixed red lumber moved to match these price changes.

There is a stronger upwards trend this year in the top quality premium timbers for the luxury hotel and apartment contracts and a matching increased demand for high priced, fi nished panel products and veneers.

In this and other markets, including the UK and Europe there is a more general move towards use of higher quality plywood and other panel products, favouring Malaysian and Indonesian production, plus reports that the relatively small number of African plywood mills have been selling well into Europe both plywood and veneers. Surely a market that Africa can develop further if there is new investment in production.

India could become a market opportunity for West & Central African furniture timbers for although housing starts in India have not grown as fast as hoped, the furniture industry has increased both domestic and export sales. So far, Asian export logs and New Zealand radiata pine logs have dominated the timber imports into India with ongoing limited and regular purchases of sawn padouk.

Our prediction that volumes would start to recover in the second quarter proved to be accurate and although trade is now in a settled state there are fewer pointers towards market performance through the second half.

If any of the areas of Middle East confl ict were resolved there would be a huge surge in demand, other than that, much will depend on how optimistic UK and European buyers may be when contemplating purchases for delivery towards the end of the third quarter. For China is can be expected the steady state of recovery in timber imports will be maintained, most likely for African producers with more emphasis on sawn lumber.