As European companies get back to business after the summer vacation season some notable price changes for major species are beginning to emerge. This, say analysts, is most likely due to re-stocking and fluctuations in demand rather than any underlying strengthening of the market.
Continuing weak demand for padouk in India and Belgium has resulted in falling FOB prices. At the same time demand in Europe for sapelli and sipo was depressed and this is reflected in the decline reported in FOB prices. The volume traded in both timbers generally declines mid-year and if past patterns can be relied upon then demand will pick up in readiness for 4th quarter sales.
Prospects for the construction sector in most European countries have improved in the past year and there is a particular emphasis on the need for new house building in UK.
Uncertain demand prospects especially in the UK
The UK referendum result and its impact, especially on sterling, is making it difficult for producers to anticipate how prices will move during the next few months. Buyers across Europe appear content to wait until post Brexit market trends begin to emerge.
Middle East markets remain firm and prices have now stabilised, the result of improved distribution throughout the region.
Demand from China has been reported as ‘only moderate’. Demand for okoume logs is particularly poor with demand being mainly for higher grades and veneer grade logs.
Exports of belli continue but show no signs of returning to previous high levels.
EPA gaining momentum in West Africa
Cameroon (and Ghana, see story below) has after very extended negotiations, recently signed the Economic Partnership Agreement (EPA) with the European Union.
This will provide for the dismantling of tariff and other trade barriers and open the markets of all signatories.
In going ahead, Cameroon is alone amongst the other members of Central African Economic and Monetary Community (CEMAC). The EPA has attracted much criticism from domestic analysts who say a flood of EU imports could undermine the emerging manufacturing sector in Cameroon. A similar concern has been raised in Ghana.
New forest code for Gabon
The government in Gabon has published a revised Forest Code. The original code was introduced in 2001 and required companies to share the revenues from timber harvesting with the local communities but the code did not set out procedures for this.
As part of the new code an implementing decree and technical guide provides details on how the sharing of benefits can be achieved. The timber industries in Gabon have not yet formally commented on the new Code.
Log Export Prices
| West Africa logs, FOB | € per m³ | ||
| Asian market |
LM
|
B
|
BC/C
|
| Acajou/ Khaya/N’Gollon |
230
|
240↑
|
160 |
| Ayous/Obéché/Wawa |
260
|
260
|
180
|
| Azobe & Ekki |
230
|
230
|
190↑
|
| Belli |
235↓
|
235↓
|
–
|
| Bibolo/Dibétou |
150
|
145
|
|
| Iroko | 330 |
290
|
260
|
| Okoume (60% CI, 40% CE, 20% CS) (China only) | 210↓ | 190↓ | 160 |
| Moabi | 335 | 305 | 225 |
| Movingui | 210 |
210
|
160
|
| Niove |
160
|
160
|
–
|
| Okan |
250
|
210 |
–
|
| Padouk |
300↓
|
290↑ |
225
|
| Sapele | 300↓ | 290 | 220 |
| Sipo/Utile |
320↓
|
310 |
255↓
|
| Tali | 310 | 310 |
–
|
Sawnwood Export Prices
| West Africa sawnwood, FOB |
€ per m³
|
|
| Ayous | FAS GMS | 410 |
| Bilinga | FAS GMS | 520 |
| Okoumé | FAS GMS |
340
|
| Merchantable | 270↑ | |
| Std/Btr GMS | 290 | |
| Sipo | FAS GMS |
580↓
|
| FAS fixed sizes | 600 | |
| FAS scantlings | 580↓ | |
| Padouk | FAS GMS | 880↓ |
| FAS scantlings | 940↓ | |
| Strips | 650 | |
| Sapele | FAS Spanish sizes | 500↓ |
| FAS scantlings | 560↓ | |
| Iroko | FAS GMS | 600 |
| Scantlings | 700 | |
| Strips |
440
|
|
| Khaya | FAS GMS |
450
|
| FAS fixed |
460
|
|
| Maobi | FAS GMS |
610
|
| Scantlings |
630
|
|
| Movingui | FAS GMS |
420
|
Source: ITTO
