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TROPICAL IMPORTS SLOW INTO UK

The UK is the largest importer of tropical wood products in the EU. By far the main products that it imports are doors, swanwood and plywood. As a result of the UK’s decision to leave the European Union it has been said by some industry analysts have suggested that the current slowing of tropical imports into the EU is a response to sterling shifts and economic uncertainty. Although Britain has voted to leave the UK government has not yet started the formal process, hence the nervousness of the markets.
Trade figures for the first five months of 2016, not including Brexit, has shown a leveling off of the value of tropical timber imports into the EU. The next set of figures, which will include post Brexit, will show, it has been suggested, a continuing fall because of market uncertainty.
However, analysis of the quoted figures for the early months 2016 before the vote to leave shows imports of tropical timber products into the UK were already slowing as too were those of France, Germany. Imports into the Netherlands, Belgium, Italy, Portugal and Spain in contrast were continuing to rise.
As ever a mixed bag for importers.

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CANADA INVESTS IN NEW ZEALAND

It has recently been reported that Canada’s PSIB has made a substantial investment, or to put it more accurately, an increase in its holdings in New Zealand company Kaingaroa Timberlands. The majority of the assets of KT are tied up with the Kaingaroa forest which is located in the central region of New Zealand’s North Island. Included in the portfolio are a nursery, log yard and processing plant. The forest comprises of 189,000 hectares. PSIB now have a controlling stake in KT which analysts believe could account to near $700m. All of this was purchased for a pension fund.

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BRAZIL NEEDS AN EXPORT DRIVE

Brazil’s wood processing and forestry sectors as represented by the IBA are calling on the government for urgent action to stimulate and increase exports in the face of a continuing weak domestic market.
The call is not just in aid of exporters but incorporates manufactures. The association would like the government to work with the private sector to achieve growth in both areas. While suppliers of pulp, paper and wood-based panels are continuing to look for new and supply existing export markets it is felt that the government could, indeed should, reduce interest rates, make credit easier to obtain in order to help both markets.This may also kick start domestic demand.

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RUSSIAN EXPORTS UP

So far 2016 is turning out to be a bumper year for Russian lumber and log exports. The period January to May shows a definite increase in overseas sales compared to the same period last year. Log exports rose by over 9 percent and lumber increased by over 14.

It is also worth recording that while log sales rose that the revenue fell by less than 1 percent which is very good news. However the value of exported lumber fell by over 4 percent. Taking that in to consideration it has been an excellent start to 2016 for Russia.

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BREXIT AND TROPICAL IMPORTS

Brexit has raised a lot of issues when it comes to trade. It has been suggested that tropical hardwood imports will suffer. How so you ask, tropical hardwood is not a European product. Well at the moment the majority of hardwoods the UK buys come through the EU. In other words they are landed in, for example Italy and are available to buy for member states. The quantity imported helps to offer a competitive price.

At the moment the UK is the largest EU importer so the price to the UK consumer may well be higher.

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EUROPEAN PAPER IMPROVES

Perhaps it is fair to say that an overlooked section of our industry is paper and packaging. It is used daily and is a mainstay of all aspects of life but it is taken for granted and few reports outer that specific industry journals focus on it. Well we are about to address the oversight now.

2015 saw solid rates of production and increased consumption compared to 2014 producing over 90million tonnes of paper and board. An interesting fact is that exports were higher than home consumption.

In fact the sector was so successful that in global terms European paper production rated second in the world to China.

A breakdown of the figures reveals that the packing sector increased its output while graphic paper, used for newsprint especially, was in less demand compared to 2014 which in a digital age is unsurprising.

All in all a healthy set of figures.

 

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FRANCE LOVES OAK

France has launched the so called ‘Label Auctions.’

In other words you are bidding for specific grades/ quality and of course types of wood.

As a result of these auctions the price of oak has risen slightly while the amount of unsold wood seems to have remained stable.

I suppose you would have to view these rather like trading floors, accentuating supply and demand.

A recent survey found a heavy demand for all oak products whereas Beech prices fell compared to last year and prices for medium diameter logs increased.

Any system that helps prices in our industry must be viewed as good.

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INDIA BOOSTS FOREST COVER

In a massive new undertaking India is preparing to increase its current forest cover by 12 percent. This in real terms means that a third of the land on the sub-continent will have the benefit of living breathing forests.

The project has been costed at billions of USD. Surprisingly the money for this is already available and has been for the past 12 years. The funds come from money paid to the Indian government by companies who want to start up projects on forest land.

The only reason why the project was not stated sooner is that it is the bill required to kick start the work has only recently been passed by the Indian government.

On an environmental level more forests are the perfect solution to India’s rampant pollution. Not only will the people of India benefit from a greener country but so will the whole world.

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CHINA EXPANDS FORESTS

China’s ‘State Forestry Administration has released details of its latest in a long series of Five year plans which aims to continue to manage and to expand the forestry stock by means of even more hectares of plantations.

If the new plan, the 13th in the series, is a success and if we look at the increased figures achieved by the 12th then China’s ‘forest stock’ will grow { no pun intended) to nearly one and a half billion cubic metres. All of this continuing and re forestation means that China’s output of flooring continues to rise into the hundreds of billions of cubic square metres.

This is a clear case of having the foresight and the ability to see the wood and the trees!

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HOUSE STARTS IN JAPAN RISES

Official statistics released by the Japanese government show that the amount of new homes currently being built continues to rise. This as you know is an excellent indicator of a countries economic prosperity. The number of homes under construction has now overtaken the previous high point of June 2015. Japanese economists were taken by surprise as the percentage of new homes rose by over double their predictions.

The construction industry by, and by this we mean major civil projects such as office blocks, schools, public buildings etc, by contrast saw orders fall over a six month period.

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