Vietnam – According to
Vietnam – According to the latest data available from the General Department of Customs Wood and Wood Products (W&WP) exports here were valued at US.2 billion in March of 2023, up 36 percent from February 2023, but down 23 percent compared to March 2022. WP exports stood at US3 million, up 48 percent compared to February 2023 but down 30 percent compared to March 2022. During the first three months of 2023, W&WP exports amounted to US.88 billion down 28 percent over the same period in 2022. WP exports contributed US.87 billion, down 39 percent over the same period in 2022. Vietnam’s W&WP imports in March 2023 were valued at US0 million, up 46 percent compared to February 2023, but down 7.6 percent compared to March 2022. For the first three months of 2023, W&WP imports were estimated at US1 million, down 28 percent over the same period in 2022. Imports of logs and sawnwood in March 2023 were 415,500 cubic meters, worth US7.5 million, up 28 percent in volume and 27 percent in value compared to February 2023. However, compared to March 2022 imports did decrease by seven percent in volume and 12 percent in value. During the first three months of 2023 imports of logs and sawnwood are estimated at 973,600 cubic meters, worth US0.9 million, down 21 percent in volume and 25 percent in value over the same period in 2022. Exports of Nontimber Forest Products (NTFP) in March of 2023 contributed US million, up 24 percent compared to February 2023, down 22 percent compared to March 2022. NTFP exports generated, overall, in the first quarter of 2023, US2.42 million, which is down 35 percent over the same period in 2022. W&WP exports to the EU markets in March 2023 accounted for US.2 million, down 26 percent compared to the same period last year. In March 2023 exports of kitchen furniture brought in about US.4 million, down 29 percent compared to March of last year. During the first quarter of 2023, kitchen furniture exports contributed US6.7 million, down 30 percent over the same period in 2022. European Union – The EU is closing in on new deforestation regulation. The legal process will introduce the new “EU Deforestation Regulation” (EUDR) and is nearing completion. In December of 2022 the European Council and the European Parliament agreed on the text of the regulation. Once the law is implemented it will prohibit regulated commodities and derived products from being placed on the EU market unless they can be shown to be “deforestation free” and “forest degradation-free,” produced in accordance with applicable laws and covered by a “due diligence statement.” This will also prohibit their export from the EU under the same conditions. The regulation will impose mandatory due diligence rules on companies to ensure that only compliant commodities and products enter the EU market or are exported from it. The EU Timber Regulation (EUTR) will be repealed under the new regulation, which already imposes mandatory due diligence rules on EU timber traders. Under the EUDR, annex 1 to the regulation contains a Combined Nomenclature (CN) list of products to be covered by the regulation. The scope of the regulation now includes “wood” alongside cattle, cocoa, oil palm, rubber and soya. In the original EC proposal rubber was not included. The scope of wood products is similar but more extensive than for EUTR, including products in Chapter 44 (“wood”) of the EU CN; pulp and paper of CN Chapters 47 and 48, with the exception of bamboo-based and recovered (waster and scrape) products; printed papers in CN Chapter 49; and all furniture identified as composed wood, both seating and all other categories, in CN chapter 94. Key additions compared to EUTR are charcoal, all “other” wood products in Chapter 44, wooden seating and printed papers. Within the EUDR’s definitions for “deforestation” and “forest degradation,” a deforestation commodity or product will have to be produced on land that has not been subject to deforestation after December 31, 2020, and for which wood has been harvested without causing “forest degradation” since that date. The prohibition on products from deforested or degraded forest land will apply irrespective of the legality of the harvesting operation. “Deforestation” is defined in the regulation as the “conversion of forest to agriculture use, whether human induced or not.” The definition of forest is based upon the Food and Agriculture Organization (FAO) as “land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy cover of more than 10 percent” while excluding “land that is predominantly under agricultural or urban land use.” There is no protection for “other wooded land” in the agreed text, such as open savanna forest, although the preamble does state that an evaluation of the potential to extend the scope to other wooded land should be undertaken within a year Business Trends Abroad after the entry into force of the regulation. The legislation goes on to define forest degradation as “structural changes to forest cover, taking the form of the conversion of primary forests or naturally regenerated forests into plantation forests or into other wooded land and the conversion of primary forests into planted forests.” According the EUDR a “primary forest” is a naturally regenerated forest of native tree species, without any human activities or ecological disturbances. This definition of “naturally regenerating forest” is very broad and is taken to mean, “Forests predominantly composed of trees established through natural regeneration. The definition also includes forests for which it is not possible to distinguish whether planted or naturally regenerated, as well as forests with a mix of naturally regenerated native tree species and planted or seeded trees, and where the naturally regenerated trees are expected to constitute a major part of the growing stock at stand maturity. The definition includes coppice from trees originally established through natural regeneration and naturally regenerated trees of introduced species.” Indonesia – The European Union’s decision to impose new rules regulating the timber trade has pushed Indonesia to take action. The Ministry of Environment and Forestry (KLHK) finalized a “new” Timber Legality Verification System (SVLK). The SVLK has changed to the “Legality and Sustainability Verification System” with the same abbreviation, SVLK. The new regulation will deal with the legality of timber sources and identifies the sources that are sustainably managed. The Director General of Sustainable Forest Management in the KLHK, Agus Justianto, said a seminar held by the Indonesian Timber Panel Association (Apkindo), that the previous SVLK also had sustainability aspects in its criteria and indicators. According to Justianto, for the new SVLK, the word “sustainability” will now emphasize legality and sustainability. Justianto said that the new SVLK has evolved to include a longer validity perod for certificates for cultivated wood. There are also financing facilities for certification for micro, small and medium enterprises. Justianto went on to add that the government’s quick action in rebranding the SVLK should be appreciated as it deals with market requirements as the EU wood product market is large and that Indonesia must act quickly so that they can capture a greater market share. This will be a new paradigm for SVLK. The Director for Processing and Marketing Forest Products at the KLHK said the SVLK was well accepted in the international market. He added that the SVLK has several attributes that make it acceptable, for example the SVLK has strict and well-maintained regulations to ensure the forest product legality and forest sustainability. The SVLK continues to remain credible by carrying out verification through third parties, which are accredited by the National Accreditation Committee (KAN). SVLK is also strengthened by multi-stakeholder involvement in the development and implementation. Implementation of the SVLK has been transparent as it relies on civil society to be independent monitors. Responding to the European Union’s plan to implement the Deforestation Free Supply Chain law (DFSC), the Director for Processing and Marketing Forest Products at the KLHK stated that Indonesia hopes that the European Union will continue to recognize the SVLK. Indroyono Soesilo, the chairman of the Indonesian Forestry Community Communication Forum (FKMPI), stated that the SVLK is a credible system for Indonesia to satisfy the European Union’s DFSC regulations. This is due to SVLK increasing accountability and transparency which have an impact on improving forest governance in Indonesia. China – There are efforts being made to develop markets for “green” home furnishings in rural areas to create new opportunities for manufacturers in the post pandemic era. Since the end of the pandemic there has been an increase in awareness of health issues and the marketing of environmentally safe wood products across the country will add momentum to the trend. According to a recent survey by the China Wood Production Industry Association (CWPIA) 50 percent of home decoration users are most concerned about formaldehyde, 30 percent are concerned about “energy saving and environmental protection” in the choice of home decoration, 20 percent choose “close to nature” as the theme style for home decoration. As a result of this survey, it is anticipated that the “green” household products will find a ready market. The advantages of wooden frame buildings in the context of global energy conservation and emission reduction are gaining attention as wood frame buildings have a natural advantage, as carbon is fixed for a long period of time. The Green Building Materials Certification Directory has included modern wood frame building materials. Throughout 2023 green building materials will be promoted to the countryside in five pilot regions. This promoting of green building materials will allow consumers to have a better understanding of the concept of green building materials. The sales of green building materials have played a positive role in improving the productivity of building material product manufacturers by lifting the consumption of green building materials and improving the quality of rural housing construction, while promoting a good atmosphere for green consumption. Experience suggests that it can take two years of practical experience to realize comprehensive promotion. The first that green building materials was sold in rural areas, was 2022. While some achievements have been made, supporting activities and implementation plans have not been implemented in pilot regions due to the impact of the epidemic. As the impact of the domestic epidemic dissipates this year, the campaign to send green building materials to the countryside is expected to expand. Brazil – According to the latest data, Brazilian exports of wood-based products (except for pulp and paper) decreased by 19 percent in value compared to the same period last year, from US3.2 million to US1.9 million. Pine sawnwood exports decreased 19 percent between March 2022 and March 2023 (US.1 million). In volume, exports decreased six percent over the same period, from 275,000 cubic meters to 258,900 cubic meters. Tropical sawnwood exports fell 38 percent in volume, from 43,400 cubic meters in March 2022 to 27,000 cubic meters in March 2023. In value, exports decreased 18 percent from US.9 million to US.6 million over the same period. Pine plywood exports experienced a 22 percent decline in value in March 2023 compared to March 2022, from US.6 million to US.5 million. In volume, exports dropped 0.4 percent over the same period, from 214,300 cubic meters to 213,500 cubic meters. As for tropical plywood, exports decreased in volume by 45 percent and in value by 44 percent, from 6,200 cubic meters and US.2 million in March 2022 to 3,400 cubic meters and US.8 million in March 2023. As for wooden furniture the export value fell from US.5 million in March 2022 to US.4 million in March 2023, an almost nine percent drop. n SOUTHEAST BUSINESS TRENDS - Continued from page 16 move lumber and the prices aren’t where they need to be. We are doing slightly better than we were six months ago though.” His company handles Red and White Oak, Poplar and Ash in grades FAS and No. 2 Common, as well as kiln-dried, in thicknesses 4/4-6/4. “I’ve seen an uptick in 5/4 Red Oak FAS and White Oak FAS is still holding its own even though the price has dropped,” he noted. He said that his company sells to brokers, distribution yards and exports to China, Mexico and the UK. “Sales are slow in China but it’s slow basically everywhere,” he remarked. He mentioned that his company has received more calls on transportation than they have in the past eight months. A sawmill representative in Kentucky said that his sales have been extremely strong. “My sales are doing much better than they were six months ago,” he added. His company handles Basswood, Cherry, Hickory, Red and White Oak, Hard and Soft Maple and Poplar in grades No. 1 Common and Better. He said his dominant species are Red and White Oak and Poplar and that he will cut these in 4/4 and 5/4, while he will only cut the other species in 4/4. He said that his company sells to every kind of customer. “My export sales, in general, are more to distributors, with the occasional end user. On the domestic front we primarily sell to end users. “Fortunately, we have enough of our own trucks to make our just in time deliveries. Items that ship on a heavy volume, I will contract that work out and as of now that pressure has for the most part diminished as compared to a year ago,” he noted. He also mentioned that he has noticed that there is a significant parts shortage. “I mean it’s even just standard parts like a bearing that we would typically run down to an industrial store to pick up and if they don’t have it we are out 80-90 days. So, we have started to stock up on certain parts based on when we think they may go out, the part might not need to be replaced for a year, but we will have it when it does need to be replaced.” n ONTARIO BUSINESS TRENDS - Continued from page 17 Hard Maple is not experiencing the same level of urgency to ship it, but more to help with cash flow and storage requirements. Prices for both kiln-dried and green are declining. Depending on areas contacted, Soft Maple is selling better than Hard Maple. Some have an oversupply of green Soft Maple, and prices are lower. International sales of kiln-dried Red Oak have cooled compared to several months ago, while domestic markets are steady. Inventories of most grades and thicknesses are not very high, but prices are firm. There is solid interest in green production as most sawmills are processing Whitewoods to avoid staining. Contacts noted inventories are fairly low for most all grades and thicknesses of kiln-dried White Oak. Secondary manufacturers and wholesalers are working to raise their inventories, while suppliers are shipping the full green production. It was noted pallet and lumber cant production was steady, with supplies outpacing buyers’ needs. With the federal budget having been tabled March 28th, the Forest Products Association of Canada (FPAC) was pleased at the renewed support for Canada’s forest sector, its workers and communities, by outlining the leadership role forestry and forest products can play in growing Canada’s green economy. The Finance Minister pledged 8.4 million over three years toward Indigenous leadership in the sector, forestry research and development, low-carbon building construction, and support to bring more sustainably sourced Canadian forest products to the world. FPAC said the Finance Minister was sending a clear message to Canadian forestry workers – that they were among the best in the world at what they did and were essential players in the lower carbon economy of tomorrow. FPAC stated the budget also delivered on the promise of forest biomass from Canada’s sustainably managed forests. In the face of worsening and more catastrophic fire patterns, the budget recognized that they needed to do more to build new markets for stranded wood fiber and wood waste, realize the climate benefits of biomass here at home, and help maximize carbon sinks in our forests. The budget noted that forest biomass and biofuels provided a critical energy source and created much-needed economic growth for forestry businesses, workers, and families in northern and rural communities. FPAC looked forward to working with the government to ensure its climate policies and regulations enable growth in the sector and that its suite of critical Investment Tax Credits will include Canadian forestry solutions. Under these conditions, noted FPAC, we can get more people working, accelerate our move to a lower carbon economy, and attract more private sector investment to Canada. On another note about the budget, the new tax-free First Home Savings Account (FHSA), which was said to launch on April 1, 2023, is like a Tax Free Savings Account (TFSA) and allows first-time home buyers — or those who have not purchased a home in the previous four years — to make tax-deductible contributions and tax-free withdrawals to purchase a home. This may be good news for the hardwood industry as more buyers may be able to take advantage of this saving to buy a home, and which could result in new home owners making renovations such as hardwood floors, kitchen cabinets, and other wood components. n QUEBEC BUSINESS TRENDS - Continued from page 17 soften. Secondary manufacturers and wholesalers are taking up green Hickory, with supplies having tightened in some areas. Flooring manufacturers are having difficulty finding sufficient Oak lumber to produce their products. This is being experienced in both residential and truck trailer flooring plants. It was noted that flooring plants were paying similar prices for Red and White Oak. Red Oak green lumber production is moving well noted sawmills. Flooring manufacturers are purchasing No. 2A and 3A along with larger quantities of No. 1 Common Red Oak. Wholesalers are reigning in their purchases of No. 1 Common and Better due to reduced demand from China for kiln-dried Red Oak. Market conditions are favorable for White Oak, and so sawmills are being challenged to increase their production of this species. White Oak log procurement is challenging due to competition from stave plants. Log supplies of Poplar are improving at mills in certain areas where Poplar is the dominant species. Green supplies were reported as meeting demand, even though they are reportedly tight elsewhere. Kiln-dried markets of this species are also doing well, but some contacts noted that there is a slowing demand from the Far East and growing price pressures in parts of the U.S. Following confirmation of the Emerald Ash Borer in the Regional County Municipality (RCM) of Avignon, in the Gaspésie area of Quebec, in July 2022, the Canadian Food Inspection Agency (CFIA) will continue to regulate the area with notices of prohibition of movement. Ash material (such as logs, branches and woodchips) and all species of firewood cannot be moved offsite without permission from the CFIA. The property owners with confirmed detections of EAB in the RCM of Avignon have been notified. The CFIA will continue to survey and monitor the extent of the spread of this invasive beetle in 2023 in eastern Quebec and northern New Brunswick. The CFIA plans to consult with federal, provincial, municipal and First Nations partners and other organizations in the near future on options to manage Emerald Ash Borer in Eastern Canada. Although EAB poses no threat to human health, it is highly destructive to Ash trees. It has already killed millions of Ash trees in regulated areas in Canada and in the U.S. and poses a major economic and environmental threat to urban and forested areas of North America. The CFIA continues to work with federal, provincial, municipal and Indigenous partners and organizations to slow the spread of this pest. n Page 32 Import/Export Wood Purchasing News n June/July 2023 Import/Export Wood Purchasing News n June/July 2023 Page 33
