Industry News

Global hardwood pulpwood prices on the rise in Q3 2016

The latest Global Timber and Wood Products Market bulletin released by Wood Resources International show a general increase of hardwood pulpwood prices in Brazil, Indonesia, Australia and Chile in Q3 2016. On the contrary, in the same period, softwood chip and pulplog prices fell in much of European and North American countries.

In details, the Hardwood Wood Fiber Price Index (HFPI) has rebounded by 5.6% from the 1Q/16 when it reached an 11-year low. The biggest price increases this year have been in Brazil, Indonesia, Australia and Chile where prices have gone up despite the strengthening of the local currencies. However, hardwood fiber prices have not gone up in all markets this year. Hardwood pulplog prices were lower throughout Europe, Eastern Canada and the US South.
 
Except for Russian pulpmills, which have by far the lowest hardwood fiber costs in the world, hardwood pulp-producing regions throughout North America, Europe and Latin America currently have wood costs ranging in a fairly narrow range between US$75/odmt to US$100/odmt. Five years ago, when the HFPI reached its all-time-high, this range was substantially wider at US$75/odmt to US$175/odmt.
 
Softwood chip and pulplog prices fell in the local currencies in much of Europe and North America which, together with a stronger US dollar against the Canadian dollar and the Euro, resulted in a decline of the Softwood Wood Fiber Price Index (SFPI) in the 3Q/16.

The SFPI is currently close to the lowest level in over ten years. During the past 12 months, softwood fiber costs in US dollar terms have fallen the most in the US Northwest, British Columbia, France, Norway and Germany, while they have gone up the most in Brazil, New Zealand and Japan.

 

[News URL: http://cti-timber.org/content/global-hardwood-pulpwood-prices-rise-q3-2016]

Vietnam ready to ratify FLEGT VPA with the EU

On Friday 18th November 2016 EU Environment Commissioner Karmenu Vella and Vietnamese Agriculture and Rural Development Minister Nguyen Xuan Cuong reached an ‘agreement in principle’ on the start of a FLEGT VPA between the European Union and Hanoi.

The news was reported by the European Timber Trade Federation (ETTF) alongside an EU statement remarking that the ‘substance of the deal’ was agreed and pending ‘technical, consistency and legal checks’ ratification is expected to start next year. 

The Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT VPA) will see the implementation of a comprehensive timber legality assurance system, greater stakeholder engagement in the Vietnamese timber and forestry industry, and establishment of a monitoring and auditing framework. Once these are complete and authorised by EU and Vietnamese authorities, the country will be able to FLEGT licence its exports to the EU, exempting them from further due diligence by operator importers.

The aim of the measure is to combat illegal logging and illegal timber trade out of Vietnam. The focus is not just on timber and wood products based on material from its own forests, but also the major volumes it imports from around 80 countries across the rest of Asia and further afield and then processes and re-exports as finished goods. 

The VPA covers all major timber and wood product groups exported to the EU and Vietnam will also undertake to apply its legality assurance standard and systems to domestic timber and wood product sales and exports to other markets.

Vietnam’s wood-based exports to the EU in 2014 were worth around $705 million dollars, or between a quarter and a fifth of its total. This puts it third after the US and China as the country’s most important timber export market, and its sales there in the first eight months of last year were reported at US$436 million.

"Vietnam and the EU today celebrate a milestone in their cooperation in the global fight to end illegal logging," said Commissioner Vella. "Now we must focus on implementation to ensure that the VPA delivers on its social, environmental and economic goals.”

He added that the VPA would require "credible and robust systems involving all stakeholders and including effective mechanisms to detect violations and ensure law enforcement."

“The EU will continue to support Vietnam's efforts in this regard,” he said, “and we will be monitoring closely how it works to implement the VPA.”

Vietnam is one of 15 countries currently negotiating or implementing FLEGT VPAS. On November 15 Indonesia became the first to complete implementation and start issuing FLEGT licences. Its first licensed shipments are en route and expected in the EU in coming weeks. 

 

[News URL: http://cti-timber.org/content/vietnam-ready-ratify-flegt-vpa-eu]

Timber prices on the rise in UK market, says latest Forestry Commission Stats Report

The Forestry Commission has released its latest National Statistics on Timber Price Indices.

Timber Price Indices are based on sales by the Forestry Commission and Natural Resources Wales and consist of the Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index. 

The key points from the latest release are listed below.

For the Coniferous Standing Sales Price Index:

  • There has been an overall increase in the index over the last 13 years, following an overall decrease in earlier years.
  • The index was 8.3% lower in real terms (7.6% in nominal terms) in the year to September 2016, compared with the previous year.
  • The average price for coniferous standing sales was £17.31 per cubic metre overbark standing in nominal terms in the year to September 2016, a decrease from £18.24 in the year to September 2015.  

For the Softwood Sawlog Price Index:

  • There has been relatively stable in recent years, following a long period of general decline.
  • The index was 13.6% greater in real terms (14.4% in nominal terms) in the 6 months to September 2016, compared with the corresponding period of the previous year.
  • The average price for softwood sawlog sales was £44.19 per cubic metre overbark in nominal terms in the 6 month period to September 2016, an increase from £38.63 in the 6 months to September 2015 and £41.34 in the 6 months to March 2016.

The complete report can be downloaded here.

 

[News URL: http://cti-timber.org/content/timber-prices-rise-uk-market-says-latest-forestry-commission-stats-report]

TTF questions WWF timber supply crunch scenario

The Timber Trade Federation (TTF) has released a note questioning the scenario of a future depletion of global tropical hardwood timber supplies in the next 30 years, as prospected by WWF in the report '100% Sustainable Timber Markets’ .

The WWF report - published in in July 2016 and downloadable here - warned that primary forest areas are being depleted at an alarming rate worldwide posing a direct threat to the viability of sawmills and other primary processors in the UK and other importing countries. The publication also addressed ways in which UK business could go about improving the future sustainability and security of timber supplies from exporter countries.

In its note, the TTF explains that the greatest share of the UK timber trade consists of softwood produced and imported from well managed and sustainable forest sources mainly from Scandinavia and Baltic countries. On the other hand, only 4.6% of UK timber imports are hardwood of which tropical hardwoods make up just a small percentage.

Nonetheless, the TTF recognises the need for increasing action on responsible timber sourcing as highlighted by TTF Head of Sustainability Mike Worrell: “The TTF has a continued priority to improve standards in responsible and sustainable sourcing policies across its membership. In line with this, we are working on a revised and improved version of our Due Diligence system, the Responsible Purchasing Policy (RPP). We have also recently been awarded a grant from the Department for International Development (DfID) to begin work on a project to promote better environmental and trade relations between UK importers and timber suppliers in China, Ghana and Cameroon. This very much falls in line with the suggestions of this WWF report and we look forward to our members leading the process through their engagement.”      

The TTF also notes that - with the EUTR now having been in place for the past 3 years and Indonesia scheduled to be the first country to issue FLEGT licenses in November - the issue of timber legality is set to represent a high priority for the UK and the EU.

"As more tropical timber exporting countries adopt FLEGT licensing and the EU maintains links with VPA countries, it is hoped that sustainable as well as legal forestry practises will become the norm. Ultimately, if tropical forests are not managed in a sustainable fashion, the global availability of tropical timber will collapse along with the business of their trade."

"Increased investment in sustainable forestry governance and management for timber production is one of the best ways to ensure the long term survival of tropical forests."

 

[News URL: http://cti-timber.org/content/ttf-questions-wwf-timber-supply-crunch-scenario]

ETTF releases special Newsletter focused on FLEGT licensing

The European Timber Trade Federation (ETTF) has issued a special edition of its Newsletter, specifically focused on FLEGT licensing.

The Newsletter - available here - marks the announcement that Indonesia will issue the first legality assurance FLEGT licences for timber and wood exports to the EU on 15 November 2016.

It also offers details from the JIC announcement and looks at the background and development of the Indonesia-EU VPA featuring an exclusive interview with EC Environmental Commissioner Karmenu Vella and reaction to the news and comment on expected market impacts of FLEGT licensing from across the EU trade.

Finally, the Newsletter shows the latest FLEGT VPA developments in Ghana and reports the launch of the FLEGT information point website www.flegtlicence.org.

"It has taken time to get here, resulting in a dip in FLEGT licensing awareness in the marketplace", said ETTF Secretary General André de Boer. "It has been a huge undertaking by Indonesia and the EU and hopefully will now give the wider FLEGT Voluntary Partnership  agreement initiative, and other suppliers involved, renewed impetus".

Mr de Boer added: "Indonesia’s success is just the start of the FLEGT licensing journey. We must also maintain pressure for strict, uniform enforcement of the EUTR EU-wide. Any weakness here is a disincentive to supply and buy FLEGT-licensed timber."

"That's why we need a virtuous trading circle with rigorous EUTR enforcement driving demand for FLEGT-licensed timber."

 

[News URL: http://www.cti-timber.org/content/ettf-launches-newsletter-focused-flegt-licensing]

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