One outcome of Thailand’s EU Voluntary Partnership Agreement is a change in forestry regulation, freeing up smallholder farmers to sell timber from private land, according to a report from the European Forestry Institute FLEGT Facility (www.euflegt.efi.int).
FLEGT market news
After several rounds of negotiations, the relevant ministries in Indonesia agreed to suspend a Ministry of Trade regulation (15/2020) that would have made V-Legal documents for timber and timber product exports voluntary as of 27 May 2020. At the same time, Indonesia decided to increase financial support for SVLK certification of MSMEs, according to a report by foresthints.news.
Tropical timber producers around the globe are facing a crisis due to measures taken to contain the spread of COVID-19. Direct government action affecting tropical timber production and logistics range from total lockdowns or restricted movement to less stringent approaches. Companies in a number of countries are also suffering from a plunge in international orders.
Report from ITTO Market Information Service (Volume 24 No 6): Economic forecasts issued only a few weeks ago in Europe, which projected continuing slow increase this year in GDP and business activity in sectors critical to the timber industry, such as construction and furniture, will need to be completely revised in the face of the Covid-19 outbreak.
Issues like Brexit, enforcement of EUTR, the slowing pace of manufacturing in Germany, and the US-China trade dispute, that only a few weeks ago seemed likely to lead the narrative of changing demand for tropical wood products in Europe during 2020, have taken a back seat in response to the transformative effects of the pandemic.
Overall the EU’s trade in tropical wood and wood furniture products was more buoyant in the first nine of months of 2019 than the same period in 2018. In terms of US$ value, the biggest gains in the market were made by Indonesian products, particularly wood furniture and doors.
The Ghanaian timber sector has unveiled a marketing initiative to communicate legality and sustainability assurance advances made under its FLEGT VPA to EU customers, preparatory to Ghana starting FLEGT licensing. The ‘Message House’ has been developed by the Kumasi Wood Cluster (KWC) and Ghana Timber Millers Association (GTMA) with support from government, civil society and the UNFAO EU FLEGT Programme. Its aim, they say, is to highlight the measures and reforms the country has undertaken to meet EU requirements in order to help business capitalise on market opportunities and ensure FLEGT licensing delivers commercially.
Fort Builders Merchant, a new business just launched by former UK Timber Trade Federation President Keith Fryer, is applying its own ‘Fortified’ eco-label to FLEGT-licensed and FSC and PEFC-certified timber without differentiation. The aim is to simplify and cut the cost of legality and sustainability assurance. IMM interviewed Mr Fryer on the company’s innovative move.
As the title Reducing risk, improving supply suggests, the UK Timber Trade Federation’s recent Tropical Timber Forum had a dual focus. Ensuring tropical timber legality and sustainability was recognised as core to success in the modern marketplace. But the emphasis was also on the interaction of this and the broader commercial viability of the sector and how it needs to adapt ensure availability and remain competitive.
If steel and concrete road fixtures and fittings, including lamp and signposts, crash and acoustic barriers were made of wood, and hardwood in particular, it would add up to major timber demand and major CO2 savings. That’s the blueprint the Dutch Ministry of Logistics and Waterways has devised, following stakeholder discussions, among others, with Netherlands timber sector market development organisation, Centrum Hout. It’s done the carbon calculations, called the concept the ‘circular bio-based highway’ and Steffen Meinhardt of Dutch importer Hupkes Houthandel presented on it at the 2019 International Hardwood Conference in Berlin.
While still dwarfed by domestic production and exports, Indonesia’s imports of timber and timber products are rising in several product groups. Total Indonesian imports of timber and timber products increased 35% to 4.23 million tonnes between 2015 and 2018. In value terms, imports increased 16% to US$1.52 billion. Much of the growth in import quantity has been concentrated in wood (HS 44) products, with a particularly dramatic increase during 2017.
The first IMM EU trade survey in 2017 identified several administrative issues that may have had an impact on the market for FLEGT-licensed timber in the early stages after implementation. First and foremost, there were delays in clearance of shipments for circulation on the European markets due to FLEGT-license mismatches. Some companies also had difficulties adapting to the new administrative procedures involved in importing FLEGT-licensed timber and called for a fully electronic process to reduce administrative effort. Besides these administrative issues, lack of awareness of the Indonesian FLEGT VPA and what it means on the ground was frequently mentioned as undermining market development.
Assessing the current availability of third party verified products in the EU market is challenging since no system-wide data is regularly or systematically collected on the actual volume or value of trade in these products. The FSC and PEFC certification frameworks that might be expected to provide such data only publish information on the area of certified forest and the numbers of chain of custody certificates issued.
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