MTIB News Extracts (Vol. 08/02/17) MTIB News Extract Vol. 08/02/2017

Transcription

1 MTIB News Extract Vol. 08/02/2017

2 This weekly information service provided by MTIB represents one of our efforts to provide the timber industry regularly updated business information on forestry and timber and the trading environment. This enables quick reading of trends, developments and business opportunities to be identified. Since its launching, the service is well received and I thank you for your continued support especially your comments and suggestions. We will continue to upgrade the quality of the news items for the interest and benefit of the industry and hope your association s members will continue to benefit from it. Please communicate with us regularly so that we can improve the information flow based on your feedback. We look forward to hearing from you. Thank you. Dato Dr. Jalaluddin Harun Director General Malaysian Timber Industry Board

3 INDONESIA: FSC URGED BY GOVERNMENT TO EVALUATE 1994 RULE The Forest Stewardship Council (FSC) has been urged by the Indonesian government to evaluate its so-called "1994 rule" after it was deemed incompatible with the country. The 1994 rule was introduced to reject certifications for forest management units which have been converted from natural forests, including tree plantations. As such, industrial forests which were converted after 1994 will not be certified by the FSC. However, it has become the largest obstacle for local industry players seeking FSC certification. In order to launch new markets and boost its industrial reputation, the government aims to push for more timber players to get certified by FSC. Jakarta Globe (The), 10 Feb 2017 LAOS/EU: VPA ON FLEGT TO BE SIGNED IN 2018 In 2018, a Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT) will be entered by Laos with the European Union (EU). The deal will promote wood processing sector investment and provide access to EU, Australian, US and Japanese market for Laos' wood processing businesses. Vientiane Times, 09 Feb 2017

4 LAOS: MEETING HELD ON LIST OF PROHIBITED, ELIGIBLE WOODEN PRODUCT FOR EXPORT On 16 February 2017, a meeting has been held by the Industry and Handicrafts Departments to clarify the Decision on the Approval of the List of Eligible and Prohibited Products for Export in Laos. According to Manohak Rasachack, Director General of the Industry and Handicraft Department, the main purpose of the meeting is to determine future directions of Laos' wood sector development, implementing the decision and raising diversities and numbers of wooden products. The decision, which was issued by the Ministry of Industry and Commerce on 3 October 2016, mentioned the prohibited and eligible wooden products for export. There are 12 segments in the wooden products that are prohibited for export, namely stair rails and laminated stair rails, balustrades, large plated woods and columns, among others. As for the list of eligible wooden products for exports, there are 12 categories, namely chip wood, wooden furniture, wooden handle products and wooden charcoal, among others. KPL - Lao News Agency, 16 Feb 2017

5 VIET NAM: TIMBER EXPORT VALUE OF OVER USD 7.5 BILLION TARGETED BY 2020 In Viet Nam, Deputy Minister of the Ministry of Agriculture and Rural Development Ha Cong Tuan revealed that the country planned to raise its timber export value to more than USD 7.50 billion (EUR 7.05 billion) by The export value in 2016 was at USD 7.3 billion. To increase the value, Viet Nam planned to raise the country's forest coverage to 41.45%. In 2016, 360,000 hectares of forest was retransplanted, more than 58 million scattered trees were planted and nearly 220,000 hactares of concentrated forest were planted. VietnamPlus (in English), 09 Feb 2017 JAPAN: EXPORTS OF AGRICULTURAL, FISHERY AND FORESTRY GOODS GREW TO JPY BILLION Japan's shipments of agricultural, fishery and forestry goods increased 0.7% year-on-year to JPY billion (EUR 6.23 billion/ USD 6.63 billion) in Exports of beef grew 23.1% in the period under review, while exports of rice increased 21.2%. Meanwhile, shipments of peach rose 10.8%, grapes 50.4% and strawberries 35.3% in the reporting period. On the other hand, exports of bonito, tuna and relevant fish declined 28.9% year-

6 on-year in 2016, while shipments of scallops dropped 7.2% due to bad weather causing poor catches. Japan News (The), 11 Feb 2017 JAPAN: WOODEN DOORS IMPORTS Japan s fourth quarter 2016 imports of wooden doors (HS ) were down 18% compared to the same period in 2105 extending the decline in the first three quarters of 2016 when wooden door imports were around 2% down yearon- year. For 2016 the top four suppliers in order of rank were China, the Philippines, Indonesia and Malaysia and these four accounted for over 90% of Japan s 2016 wooden door imports. Below shows the wooden door imports in Japan, 2016:

7 Globalwood.org, 15 Feb MTIB News Extracts (Vol. 08/02/17)

8 SOUTH KOREA: ANTI-DUMPING DUTIES EXTENDED ON FOREIGN PLYWOOD A decision has been made by the trade commission of South Korea to continue to impose anti-dumping duties on plywood from Malaysia and China for three more years. Such move is taken by the Korea Trade Commission (KTC) to provide protection to South Korean companies. Such decision has been made by the trade commission following on-sites hearings and inspections. Since February 2011, the punitive duties of 3.96% to 38.10% have been slapped by the commission on Malaysian products and 4.57% to 27.21% since October 2013 on plywood from China. Of the total South Korean market, Malaysian and Chinese plywood made up for 33% as of Yonhap News Agency, 17 Feb 2017 IRAN: SWEDISH BUSINESS DELEGATION TO VISIT IRAN A major Swedish business delegation will visit Iran together with Swedish Prime Minister Stefan Löfven and Sweden's Minister for EU Affairs and Trade Ann Linde. Among the companies included in the delegation are Ericsson, Scania, Volvo and Astra Zeneca. The aim is to increase Swedish exports to Iran when the sanctions against the country have been lifted. Sveriges Television, 10 Feb 2017

9 SAUDI ARABIA: SAR 92 BILLION SUPPORT FOR AGRICULTURE, WATER, ENVIRONMENT ANNOUNCED Saudi Arabia's minister for the environment, water and agriculture Abdulrahman al-fadhli said the government has approved SAR 92 billion (EUR billion/ USD billion) of financial support for those sectors, to meet 16 strategic goals under Vision The National Transformation Plan (a part of Vision 2030) lists SAR billion spending for the Ministry of Agriculture and SAR billion for the Ministry of Water and Electricity. The long-term economic plan aims to push economic diversification, reduce energy and water subsidies and increase the private sector's role in the electricity and water industries. Reuters - Africa, 13 Feb 2017 ESTONIA: TOP 6TH RANKING GLOBALLY AND TOP 2ND IN EU IN ECONOMIC FREEDOM In the ranking of the Economic Freedom drawn by The Wall Street Journal and The Heritage Foundation, Estonia scored points and moved up from the ninth position in 2016 to the 6th position globally in 2017 and to the top second position after Switzerland in Europe. Latvia rose from the 47th to 20th position and Lithuania dropped from the 13th to the 16th position in the Economic Freedom ranking. Postimees, 15 Feb 2017

10 DENMARK: MORE PEOPLE WORK WITH FURNITURE, CLOTHING AND DESIGN In Denmark, the number of employees working in the furniture, clothing and design industry amounted to 62,227 in 2016, according to official statistics. This is the highest number since 2009, according to the new report form Estatistik. Jylland-Posten, 16 Feb 2017 SWEDEN: SLIGHT INCREASE IN EXPORTS OF WOOD Figures from Statistics Sweden (SCB) show that Swedish export of sawn coniferous wood amounted to 12.1 million cubic metres in the period January to November This is 1% more than in the same period in Swedish saw mills expect a more positive development in 2017 due to increased demand on the European, US and Asian markets. ATL, 11 Feb 2017

11 UKRAINE: EXPORTS AND IMPORTS OF WOOD AND WOODEN PRODUCTS INCREASE According to the State Statistics Service of Ukraine, in 2016, export of wood and wooden products amounted to USD 1.13 billion (EUR 1.06 billion). The figure is 2.2% higher than in Imports of these products totalled USD million (+32.7% year-on-year). Lesprom, 15 Feb 2017 RUSSIA: EXPORTS OF CHIPBOARD TO CHINA THROUGH BORDER CROSSING HEIHE INCREASE According to Xinhua News Agency, in 2016, the volume of supply of chipboard from Russia to China through the border crossing Heihe amounted to 5,310 cubic metres. The index increased by % above the level of In monetary terms, exports grew by % to USD 369,200 (EUR 347,007). Among the main reasons of the growth was indicated the change in the exchange rate of ruble, which increased the profitability of exports. Lesprom, 14 Feb 2017

12 CHILE: FORESTRY SECTOR ESTIMATES REFORESTATION COSTS AFTER BLAZE After the worst forest fire in Chile's history razed 596,690 hectares of land to the ground, initial estimates for the cost of reforestation are being presented. Timber association, Corporation Chilea de la Mandera (CORMA) believes that it will cost between USD 197 million and USD million (EUR million) to restore pine and eucalyptus plantations, at a cost of between USD 1,000 and USD 1,400 per hectare. According to preliminary figures from the Institute of Forestry (Infor), the maximum cost to replant the land will reach USD million. Of this amount, Infor estimates that USD million would be the maximum cost to restore the Maule region, which was the most affected by the blaze. Infor expects to finish an inspection to establish the true extent of the damage during the week commencing 13 February Around 72 timber plantations were burnt during the crisis according to Infor. While big companies have stated that they will replant every tree on their land, it is still unknown what will happen to smallholders of native woodland. According to the Ministry of Agriculture, the fires affected 365,958 hectares of land across three regions (O'Higgins, Maule and Bio Bio) between 14 January and 10 February 2017 and 62% of the affected land was forestry plantations. Other fires in the current season have damaged an additional 596,000 hectares.

13 The most realistic estimate seems to be that over 197,000 hectares of forestry land have been burnt. The country only has some 3-4 million plants in stock that would only serve to replant 50,000 hectares. As there is no cleared land for future plantations, it is believed that around 150,000 hectares of land will be replanted in Forestal Arauco and Chilean pulp and paper company (CMPC) have been the companies that have been the most affected by the blaze. Arauco alone lost 80,000 hectares and CMPC lost 19,500 hectares (90% pine plantations and 10% eucalyptus). The tragedy is believed to have hit small and medium landholders the most (this group represents half of the total burnt land), and it will cost them the most to repair the damage. CORMA states that only 3% of the burnt land owned by small and medium landholders was insured. Companies within the sector have spent USD 47 million during the current season to prevent and control fire. Moreover Arauco highlights than 70% of the fires it fought were not on its own land while CMPC claims that 50% of the fires it fought were on properties owned by others. CMPC had set aside USD 15 million to fight fires this year but has already spent this sum and will now designate an additional USD 7 million for extra resources and fire prevention. Meanwhile Arauco invests an average of USD 25 million to fire control and prevention. The recent fire is believed to have affected 8% of

14 Chile's total forestry plantations, which will impact the market and the supply for factories that manufacture boards, panels and pulp. The Maule region, which represents 25% of productive land, could see a drop in volume of between 1.5 million and 1.8 million cubic metres of wood per year. Moreover if local produce remains in the internal market rather than being exported, local prices will rise. Emol, 12 Feb 2017 US: COMMERCE DEPARTMENT REPORTS AROUND 1.17 MILLION HOUSING STARTS The US Commerce Department has noted that, in 2016, around 1.17 million housing units started in 2016 as opposed to annual average of 1.44 million. Economists polled by The Wall Street Journal have estimated that housing starts stayed unchanged in January 2017 as opposed to December 2016 to a seasonally adjusted yearly rate of 1.23 million. The difference occurred despite housing prices recovered to their pre-crisis value. One of the reasons that might have led to this statistics includes less mobility among citizens. As per Census Bureau, number of US citizens who moved in 2016 declined by 11.2%. Just 20% of citizens in the age group of 25 to 35 asserted that they changed their addresses in 2016.

15 30-year fixed-mortgage rate was at 4.24%, an increase of over half a percentage point after the presidential elections. As per the Mortgage Bankers Association, mortgage applications for home sales declined in a week that ended on 10 February 2017 to a 13-week low. The National Association of Home Builders' sentiment measure decreased in February 2017 for second consecutive month after reaching an 11-year high in December Wall Street Journal (The) - United States, 15 Feb 2017 MOZAMBIQUE: ECONOMIC GROWTH Mozambique's National Statistics Institute (INE) has reported that the Mozambican economy grew 3.3% in real terms during The nation's primary, secondary, and tertiary sectors reported growths of 3.9%, 5.2%, and 5.1% correspondingly. The nation's economic growth in 2015 stood at 6.6%. MacauHub, 13 Feb 2017

16 MOROCCO: FDI FLOWS UP 22.4% IN JANUARY 2017 Foreign direct investment (FDI) flows surged by 22.4% to over MAD 1.70 billion (EUR million/ USD million) in Morocco at late January 2017, with income receding by 3.9% and spending falling by 45.2%. In January 2016, FDI flows were MAD 1.40 billion. For January 2017, the income of Moroccans living abroad grew by 2.6% to MAD 4.70 billion, with the travel balance reporting a stable surplus of MAD 2.79 billion. Les ÉCO, 16 Feb 2017 SOUTH AFRICA: PRICES FOR IMPORTED HARDWOODS With respect to imports, African timbers are beginning to arrive after year-end holidays and demand in this market is steady. Demand for American hardwoods continues to be firm but there is resistance to the higher white oak prices. Despite Malaysian exporters lowering prices local analysts say the market for meranti is weak at present. The difference in the price indices for meranti and okoume is widening as buyers have been enticed back to meranti by attractive bulk shipment prices. Only small quantities of okoume are now imported and as such prices have not fallen by much. The effect of bulk purchases of meranti against spot purchases of small quantities

17 of okoume is exaggerating the price difference between the two timbers. Below showed the prices indices for meranti and okoume for quarter one 2015 till quarter 1, 2017: Globalwood.org, 15 Feb. 2017

18 GLOBAL: FLOORING MARKET LIKELY TO CROSS USD 400 BILLION According to a market report by research firm Global Market Insights, the global flooring market is anticipated to grow beyond USD 400 billion (EUR billion) at a 6.8% Compound Annual Growth Rate (CAGR) between 2015 and The residential sector is expected to generate USD 220 billion (EUR billion) in revenue by In the commercial sector, flooring demand is expected to find a 6.5% CAGR by Also, the value of flooring solutions in the industrial sector is projected to exceed USD 20 billion by In terms of market segment, resilient flooring, which is valued at USD 60 billon, is reported to grow rapidly at a 7.5% CAGR over the forecast period. The soft coverings market segment is forecast to increase up to USD 150 billion by The volume of Asia Pacific's (APAC) flooring market is forecast to grow to USD 180 billion by 2022 from USD 100 billion in 2015, with consumer lifestyle changes and growing industrialisation listed as key factors. China and India are predicted as key market regions in APAC. The flooring market share of North America is predicted to rise to USD 69 billion by 2022, compared to USD 40 billion in Major companies dominating the global market include Mohawk Industries, Beaulieu of America, Interface and Shaw Industries. Stock Market News / Marketplace, 01 Feb 2017

19 GLOBAL: DECORATIVE LAMINATES MARKET TO GROW AT CAGR OF 5.5% As per a report by hexa research, the global decorative laminates market is expected to grow at a Compound Annual Growth Rate (CAGR) of over 5.5% between 2016 and 2024 and surpass 12 billion square metres mark by Low maintenance and installation costs in addition to increasing inclination towards interior decoration/home renovations and increasing income levels are driving the demand for decorative laminates. In terms of application, furniture & cabinets segment acquire the largest market share in the decorative laminates market. Increasing popularity of ready-to-fix furniture is anticipated to propel the demand for decorative laminates further, while demand for wall panels and floorings is also predicted to increase significantly. The growth of decorative laminates market is likely to be hampered by the availability of affordable alternatives as well as strong competition. Asia pacific, which was the largest market for decorative laminates in 2015, is expected to grow further owing to increasing standard of living and income levels in India and China as well as increased expenditure on residential and non-residential construction projects in countries like Indonesia.

20 Rapid industrialisation is expected to propel the North American market, while European market is expected to benefit from the increased concentration of laminate flooring and furniture manufacturers. Armstrong world industries, Kingboard and Kronospan are among the players operating in the decorative laminates market. stock market news / marketplace, 30 Jan 2017

21 by: Trade Development Division Malaysian Timber Industry Board (Ministry Of Plantation Industries & Commodities) Level 13-17, Menara PGRM, No. 8 Jalan Pudu Ulu, Cheras P.O.Box 10887, Kuala Lumpur