The South African government is releasing 40,000m3 of timber from its forestry assets as a short-term measure to help mills suffering from log shortages.
But the government has warned that the extra timber will not solve the shortage, which has forced several independent mills to halt operations and put about 2,500 jobs in the balance.
The uncertainty was created by state forestry company Komatiland’s decision not to sell the mills any more logs because of shortages. Komatiland predicts its log volumes for the 2005-06 financial year to be down by nearly 300,000m3 (13%) because of forest fires.
The situation could have a wider effect on the construction industry by pushing up timber prices at a time when the government is embarking on a large low-cost housing programme.
Strong timber demand in the household and commercial sectors has been attributed to low interest rartes.
Sale conditions of the extra timber are expected to favour independent mills.
