Market Information Service

Towards greater transparency in the tropical timber markets

The ITTO Tropical Timber Market (TTM) Report, an output of the ITTO Market Information Service (MIS), is published in English every two weeks with the aim of improving transparency in the international tropical timber market. The TTM provides market trends and trade news from around the world, as well as indicative prices for over 400 tropical timber and added-value products.


 

 

1-15 March 2008

Top story

Chinese plywood supplies become difficult to access in UK

The main news from the UK plywood market is that supplies of Chinese plywood are becoming more and more difficult. Poor weather in China has been a major short-term factor, but a more important long-term structural factor is the gradual removal of tax benefits for Chinese exporters, which is particularly undermining the ability of smaller Chinese mills to compete in the UK market. Other problems facing Chinese mills supplying the UK market are increased competition for wood raw material in China, rising labor and fuel costs, and the difficulties of supplying environmentally certified products from China due to the complexity of supply chains. Longer term, there is an expectation that Chinese mills supplying the UK market may increasingly replace core veneers made from poplar, which are becoming less readily available and are difficult to certify, with core veneer made from eucalyptus or radiata pine.

Freight rates from Asia into the European market are also rising. While FOB prices for Chinese plywood have remained reasonably stable, CIF prices to European importers are increasing.

Malaysia and Brazil are the major beneficiaries of Chinese supply problems in the UK market. Malaysia is benefiting particularly from its ability to supply high quality material, increasing volumes of which are FSC certified, and to exploit a lower GSP tax rate than Indonesia. Brazilian shippers are benefiting from relatively short shipping times in addition to low GSP rates.


Also in this issue

  • Demand for West African logs holds steady
  • Ghana announces new project on best practices
  • MIFF 2008 to generate sales worth USD667 million
  • Indonesia upbeat on export outlook despite market conditions
  • Brazil concludes initial bidding process for concessions
  • Exports from Sinop cluster shrink 13% in January 2008
  • Timber sector retains high social impact in Mato Grosso
  • Peru mulls new law to boost reforestation activities
  • Guyana’s FTCI continues training activities in local communities
  • Tokyo lumber association anticipates upbeat trends in spring
  • Japan’s Forestry Agency 2008 budget cut by 2.3%
  • China furniture exports breach USD20 billion in 2007
  • China’s wood flooring output to reach 500 million m² by 2010
  • European demand for tropical hardwoods remains slack

Data snapshot

Weak Dollar impacts timber exporters

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As the value of the dollar keeps falling, many producer country exporters are wary of a forthcoming crisis originated by the loss of international competitiveness. In Peru, timber exporters have recently said some companies of the sector have started firing workers and were discussing closure of operations. In Brazil, a similar situation exists for furniture exporters. A number of furniture clusters have recently reported a drop in exports and profits for some furniture companies have been relatively unattainable, leading them to close their businesses. However, Brazil is now discussing measures to minimize the impact of the weakening U.S. dollar.

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