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ALONG Route 7 in Cambodia’s remote north, dozens of small tractors known as “iron buffaloes” are plying a dilapidated piece of highway. Under cover of darkness, they transport freshly cut timber into nearby sawmills. The drivers wear masks, their tractors fitted with just one dim lamp at the front. Each carries between three and six logs which locals say were felled illegally on or near the Dong Nai rubber plantation, owned by Vietnam Rubber Group (VRG).
Illegal logging and land-grabbing have long been problems in Cambodia. A new report entitled “Rubber Barons” by Global Witness, a London-based environmental watchdog, has highlighted the issue once again. Dong Nai features prominently in the report, which claims that luxury timbers like rosewood, much in demand for furniture in China and guitars in the West, were culled as a 3,000-hectare (7,400-acre) section of forest was illegally cleared.
Global Witness says that local and foreign companies have amassed more than 3.7m hectares of land in Cambodia and Laos since 2000, as governments have handed out huge land concessions, many in opaque circumstances. Two-fifths of this was for rubber plantations, dominated by state companies from Vietnam, the world’s third-largest rubber producer.
The report claims that VRG and another Vietnamese company, HAGL, are among the biggest land-grabbers, and have been logging illegally in both Cambodia and Laos. It says that, through Vietnam-based funds, the two companies have received money from Deutsche Bank, while HAGL also has investment from the IFC, the private-sector arm of the World Bank. The two Vietnamese companies have denied any wrongdoing. Deutsche Bank and the IFC say they are studying the findings.
On 3 April 2013, the New Zealand forestry industry newsletter WoodWeek wrote that in the first quarter of 2013 export prices and returns were strong and exported log volumes across the Pacific Rim continued to rise.
WoodWeek quoted data from the latest report by New Zealand-based log exporter TPT which showed that exported log volumes across the Pacific Rim surged in the first quarter of 2013. Australia and New Zealand’s softwood exports rose to 923,000 JAS (Japanese Agricultural Standard) cubic metres in the first quarter of 2013 from 788,000 JAS cubic metres in the same quarter of 2012.
The report indicated that New Zealand production was running at approximately 1.2-1.3 million cubic metres a month, assisted partly by a period of very dry weather in the country. WoodWeek reported that forest owners were continuing to post strong export returns on account of a combination of favourable bulk freight rates and log markets continuing to pay increased log prices. *** The international outlook for New Zealand’s timber and forestry investment enterprises is positive, with lumber prices rising in the US as a result of sustained increase in housing starts. As WoodWeek reported, the market was reacting to demand changes in the US housing sector, with price trends feeding into the Chinese market.
Current delays in shipping forest products to the United States are being experienced by Ontario forestry companies and The Ontario Forest Industries Association (OFIA) is expressing significant concern on the matter.
The delays are a direct result of a major lack of rail cars being provided by key railway carriers. The inability of Ontario companies to ship their products across the United States border is causing substantial losses in market share, something that OFIA believes could have long lasting impacts for Ontario’s forest sector.
“With the return of markets in the United States, we are seeing a corresponding increase in the demand for Ontario forest products. Unfortunately, we believe that Canadian Class 1 railroads have clearly underestimated both the magnitude of the recovery and the number of rail cars needed to ensure that Ontario products make it to market” says Jamie Lim, President and CEO of OFIA.
The group spent Thursday in Coeur d'Alene at the Small Log Conference, hosted by the Forest Business Network.
The delegation arrives in Missoula Friday, where the Montana World Trade Center at the University of Montana will introduce its members to Montana wood products, lumber companies and the state timber industry.
Organizers are hopeful the visit will open a new market to the companies, which represent more than $300 million in annual lumber imports throughout the world.
Trade center executive director Arnie Sherman tells the Missoulian the company representatives want to buy and they like what they see in Northwest timber and pine.
... just this week, Thermogen Industries signed a letter of intent with the Eastport Port Authority in Eastport, Maine, to build a 200,000 to 300,000-ton torrefied wood pellet manufacturing facility on land adjacent to the port’s Estes Head Terminal. Following completion of engineering and site design, Thermogen aims to formally begin the permitting process with a goal of starting construction as early as possible in 2014. In Millinocket, Maine, the company already has a fully-permitted project that work on began in October.
Down in Mississippi, New Biomass Energy just reported it had made a third shipment of torrefied wood pellets—4,000 tons—to Europe. The company is working on expanding its plant to commercial scale—150,000 to 200,000 tons—and expects the project to be complete this year. Finally, Oregon-based H3M Energy has reached several milestones in the las few years, including completion of a 50,000-ton demonstration-scale torrefied briquette facility, and construction commencement of a small commercial plant.
While Europe continues to be well ahead of us in regard to torrefaction, the market here appears to be progressing.
The forestry and timber industry may be poised for a recovery amid signs of improvement in the Kiwi and US construction markets, but industry players say it could be a delicate one.
According to industry figures, timber exports from New Zealand appear to have bottomed, with $774.5 million worth of cut lumber sold overseas in 2012, up from $770.4m in 2011, although more timber was sold at a lower unit price.
That's poised to pick up in the year ahead, according to forecasts from the Timber Industry Federation, as construction activity picks up due to the Christchurch earthquake rebuild and a rise in home building activity in Auckland.
Asian demand for New Zealand cut timber and logs is also expected to grow as North American timber supplies tighten due to a recovery in the United States home construction market. *** But Andres Katz, a forestry economist at Resource Management Services, warns that too much of a good thing could be bad for the cut timber side of the industry. Katz said a sudden spike in demand out of China could lift the price of logs suddenly, and result in a knock-on effect for millers. *** Mike King, chief executive at forestry and timber consultancy Interpine, said the other elephant in the room was the New Zealand dollar, which was currently trading at over US84 cents - its highest level in 16 months.
"Any gain we might make in the actual payments or in the value of the export commodity is often eroded by the high value dollar and shipping costs," he said. "Those could be the killers of any boom."
China’s growing appetite for rosewood dining sets, hardwood floors, plywood and printer paper is helping propel a booming trade in illegally harvested timber and spurring the destruction of fragile ecosystems across the globe, a British environmental organization said in a report released on Thursday.
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The organization, the Environmental Investigation Agency, said the Chinese government has largely turned a blind eye as wood importers and furniture makers, some of them state-owned enterprises, have profited from a $4 billion industry that harvests wood illegally from Myanmar, Mozambique, Indonesia and other countries with weak law enforcement and widespread corruption.
“Illegal logging and the trade in stolen timber are among the most destructive environmental crimes occurring today and directly threaten the world’s vital forests,” the report said.
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Last year China was the destination for roughly 30 percent of all the logs traded on the world market, making it the top importer of raw timber. The value of that wood was $9.3 billion, a nearly 30 percent increase over 2010, the report said.
The group estimated that at least 10 percent of China’s timber imports were illegally harvested, an amount that would fill 200,000 shipping containers. It said state-owned enterprises were responsible for purchasing nearly half the tropical wood imported into the country.
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Beijing’s apparent tolerance for illicit timber imports stands in marked contrast to its domestic restrictions, which environmental groups say have effectively halted the clear-cutting of Chinese forests in recent years. The government has been credited with an ambitious $31 billion tree planting program that, over four years ending in 2008, increased forest cover to more than 20 percent of the country.
Australia's parliament on Monday passed laws to ban the import and trade of illegally logged timber, joining the United States and European Union in clamping down on a global trade in stolen timber that Interpol says is worth about $30 billion a year.
The laws, five years in the making, impose fines, jail and forfeiture of goods and oblige importers to carry out mandatory due diligence on timber and timber products sourced from overseas.
"The illegal timber trade is a trade that benefits no one. It risks jobs, it risks the timber industry, and it risks the environment," Forestry Minister Joe Ludwig said. *** Illegal timber depresses prices, slashes margins and can deter firms from investing in better due diligence.
There were sound commercial and environmental reasons to support the laws, said Ross Hearne, general manager of corporate services for Kimberly-Clark Australia and New Zealand, which makes various products from paper.
"We face cheap paper imports in Australia and one of the factors in cheap imports is illegally harvested timber," he told Reuters, adding supporting the bill had helped protect the firm's brand.
Telling illegal and legal wood and wood products apart is impossible by sight alone, making it relatively easy to mislabel origin and forge import documents. *** Winners from the laws, apart from forest communities, will be firms that provide timber legality and verification services and timber importers that have already put in place tougher timber sourcing and tracking rules.
One potential winner is DNA testing and timber tracking technology developed by Singapore-based Double Helix Tracking Technologies and used by Australian client Simmonds Lumber, one of the country's largest timber importers.
DNA tests can pinpoint the species and origin of a piece of timber. DoubleHelix, as it is known, can also track timber and timber products from forest to shop to ensure clients' shipments are legal.
The illegal logging industry is worth almost as much as drug production, according to the international police organisation Interpol. ... Davyth Stewart at Interpol says the value of illegal logging is worth more than $30bn (£19bn) a year, while the legitimate annual global trade is estimated to be $115bn (£72bn).
"There are billions of dollars being invested in forest protection around the world and, as a result, organised crime is looking seriously at the timber industry as a way of generating revenue, and also for laundering the proceeds of crime," he says.
"That is theft of natural resources from some of the poorest countries in the world," he adds.
West Fraser Timber Co. (WFT.TO) and Western Forest Products Inc. (WEF.TO) are leading Canadian lumber producers to the biggest combined profit since 2006 as mills run at five-year highs to feed a U.S. housing rebound and near-record Chinese demand, Bloomberg reported.
It said lumber mills in British Columbia, Canada's leading forestry region, ran at 86%t of production capacity in the five months through May, compared with 82% for all of 2011, according to the Western Wood Products Association. Lumber futures rose to a 15-month high on Aug. 15 on the Chicago Mercantile Exchange.
The industry is recovering from losses and mill closures during the four-year U.S. housing bust amid resurgent new-home sales and building activity south of the border. Some producers are also capitalizing on orders from China for imported Canadian lumber even as the Asian country's economy slows.
Malaysian companies exporting timber to the United Kingdom and European Union (EU) countries must produce documentation tracking shipments through their supply chain back to source from March 3 next year, or be subject to legal sanctions for non-compliance.
In a statement today, the Malaysia External Trade Development Corp (Matrade) said the new law prohibits the placing of illegal timber and products derived from such timber on the EU market with operators needing to exercise "due diligence" when selling timber products there.
"For Malaysian exporters, these measures may include additional information requests on the products' details, origin, and legality and so on and certification requests for systems that allow for some legality verification, such as the Forest Stewardship Council and the Programme for the Endorsement of Forest Certification or equivalent verification scheme as certified timber products represent lower risk for EU operators and buyers.
The Australian sawn timber industry is experiencing a temporary threat from imports as a result of a strong dollar and a global surplus of timber following the Global Financial Crisis, according to leading independent economic forecaster and industry analyst, BIS Shrapnel. In the two years to 2011, imports have increased by 30 per cent.
However, imports are not a significant long term threat, as they are still well below the historical levels of 20 years ago. According to BIS Shrapnel’s Sawn Timber in Australia, 2012 to 2026 report, in the last two decades there has been a significant reduction in sawn timber imports, as domestic production capacity has expanded. At the same time, exports have grown rapidly in the past five years.
The report projects that the demand for sawn timber in Australia during the next decade will be driven by sharp growth in the building and construction sector. Due to the current undersupply of residential dwellings in Australia, BIS Shrapnel forecasts the residential construction sector, which uses more than 70 per cent of the sawn timber produced locally, will grow particularly strongly during 2014 and 2015.
China’s phenomenal GDP growth of between 9 and 14 percent annually over the past decade slowed down last year and is forecasted by International Monetary Fund (IMF) to be “only” 8.25 percent in 2012. Reduced investments in public projects and a cooling residential property market have resulted in a decline in the importation of sawlogs during the first six months of 2012.
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The demand for wood pellets in Europe has gone up dramatically the past few years as power companies across the continent have switched from using fossil fuels to produce electricity to renewable energy alternatives. According to a report from the North American Wood Fiber Review, exportation of wood pellets from North America to Europe reached a new record of 3.2 million tons in 2012, with U.S. exporters more than doubling their shipments.
Locally, Enviva Pellets – with one mill open in Ahoskie; another set to go online in Northampton County; and a third planned for Southampton County (VA) – is ramping up their operations to meet the increased demand for their product.
“Utilities around the world are increasingly turning to solid biomass fuels as a cost-effective means to deliver lasting reductions in the carbon intensity of energy generation,” said John Keppler, Chairman and CEO of Enviva. “As a key mid-stream supplier, Enviva and its growing capacity is positioned to sustainably source from one of the most robust natural resources in the United States the key renewable fuel for these growing international markets.”
Pellets shipped overseas from companies such as Enviva and others from North America increased over 60 percent from 2011 to 2012. The wood pellet export industry in North America has grown exponentially in a relatively short period of time. The export value has increased from an estimated 40 million dollars in 2004 to almost 400 million dollars in 2012. This fairly new trade development is the result of Europe’s quest to reduce its dependence on fossil fuels and to reduce CO2 emissions. Energy generation from renewable resources has, with varying pace, gone up in all countries in the European Union during the past decade.
Woody biomass, including wood pellets, is one energy source that has attracted both much attention and investments in a number of countries on the European continent. With limited domestic wood raw-material sources, countries such as the UK, Belgium and the Netherlands have increasingly relied on the importation of industrial wood pellets to reduce the usage of coal at some of their power utilities. The relatively high costs for wood pellets in Europe have resulted in increased interest in importing pellets from British Columbia and the southern states of the U.S. where wood raw-material costs are lower than in Europe.
A series of fast-spreading port strikes in Chile are blocking exports of copper, fruit and wood pulp and keeping thousands of workers idle.
The stoppage in the world’s top copper-producing nation started in the northern port of Angamos more than two weeks ago, when workers began demanding a 30-minute lunch break and a place to set up a cafeteria. Dock workers in other northern ports have joined in solidarity, causing huge losses for the mining, timber and fruit industries in export-dependent Chile.
The economy of New Zealand grew at the fastest pace in three years in the last quarter of 2012, with demand for forestry exports underpinning gains in the primary sector, the National Business Review reported on 21 March 2013. In addition, gains in the forestry sector helped offset declines in other areas such as manufacturing. The outlook for New Zealand’s forestry sector remains positive mostly due to demand from China, which is likely to provide support for New Zealand forestry investment.
The U.S. Lumber Coalition is seriously concerned by the recent announcement of log export policy changes in British Columbia (BC), particularly an increase in the “fee in lieu of domestic manufacturing” applied to many log exports that will take effect on March 1.ent of log export policy changes in British Columbia (BC).
Log export restrictions have the effect of insulating BC lumber mills from world market prices for logs, which have increased significantly in recent years as China and other countries have increased their demand for North American logs. The recent announcement of measures to tighten log export restrictions on the BC Coast will allow BC lumber producers to pay even further below-market prices for their log inputs.
Logs harvested from public or private lands in BC must be advertised to local mills before they can be exported. If a local mill offers to pay the prevailing domestic log price – which can be much lower than the export price – for a particular log sort, export of that sort is prohibited. Further, even when permission to export is granted, a “fee in lieu of domestic manufacture” is assessed on logs harvested from public and some private land. This fee is often much greater than the price that BC charges to harvest standing timber on public land. Effective March 1, the “fee in lieu” on the BC Coast will be increased by 20 percent.
A media leak has brought to light a project that would create 350 jobs and put Clark County on the map for pulpwood production — if Clark County is the location chosen for the prospect's site.
Arkansas Business on Monday reported that a Chinese wood pulp mill company called Sun Paper "plans to invest about $1 billion in building a plant" in either Camden or Arkadelphia.
*** Sun Paper, or more specifically Shandong Sun Paper Industry, is a 30-year-old company that produces about 3.5 million tons of paper and board products annually, according to the article. The new paper mill would produce paper pulp for exportation to China.
The article predicts an announcement to be made by the company in one of the two cities "in the next few weeks."
*** Allen Morgan, an EDCCC member and co-owner of the Arkadelphia-based timber company Hunter-Wasson, Inc., declined to comment on whether there has been local discussion with Sun Paper, but did shed light on why southern Arkansas would be an ideal location for a paper plant. *** Morgan explained that, prior to the economic recession, Arkansas timber companies were growing more timber than they were harvesting. "Clark County lost a huge proportion of the mills that bought our landowners' timber, and as a result of that … we're growing in excess of what we now cut — about 6 million tons per year — so we would easily provide enough raw materials for one large plant or several smaller plants."
Pine plywood was the only product where the Brazilian timber industry achieved an increase in exports last year as the sector saw its overseas earnings fall overall by 1.4%.
According to the latest International Tropical Timber Organisation (ITTO) statistics, in total, Brazil's timber exports were worth US$2.36bn, against US$2.39bn in 2011.
Pine plywood exports rose 14.5% to hit US$372m (a jump in volume from 865,600m3 to 983,900m3). But this was offset by falls in pine sawnwood from US$170m to US$158m, tropical sawnwood from US$238m to US$194m, and tropical plywood from US$46m to US$36m. The latter represented a volume fall from 75,000m3 to 58,000m3.
Para state remains one of Brazil's biggest tropical timber producing and exporting states, but in 2012 it saw its share of the country's tropical sawnwood export total fall from 46% to 40%. Its overseas sales were worth US$84.2m, against US£119m in 2011 (115,200m3 against 206,800m3).
The improved housing market in the US the past four months has resulted in both higher lumber production in the US and in increased importation of lumber.
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So far this year, housing starts have been at their highest levels since 2008, and market analysts expect the next 12 months to be bumpy but still upward-trending. The improved housing market has been good news for many sawmills in North America, reports the Wood Resource Quarterly. Lumber production has been higher throughout the continent, with an increase of 7.3 % in August year-over-year in the US, and of 6.3 % in Canada over the same time period.
The US Northwest and the province of Quebec have been the regions with the biggest increases in production the past year. The sawmills in Quebec have really ramped up production, with output in August being 30 percent higher than in August last year. It is also interesting to note that for the first time in two years, sawmills in the Western US produced as much lumber as the mills in the US South in August.
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The improved US housing market has resulted not only in higher domestic lumber production, but also in an increase in the importation of lumber. Softwood lumber imports in the 3Q/12 were up nine percent from the previous quarter, which was the highest quarterly import volume since the 2Q/10.
The higher lumber demand has pushed lumber prices substantially upward this fall. In November, Southern pine prices were 48 percent higher year-over-year, while Western hemlock prices were up 32 percent over the same period, according to Random Lengths. As reported in the Wood Resource Quarterly, sawlog prices have not yet gone up as a result of the improved lumber market. Pine log prices across the US South have been practically unchanged for almost two years, and sawlog prices in the US Northwest have been surprisingly flat for more than a year. However, in early November, there was increased upward pressure on sawlogs prices in the West from Chinese log buyers that were more active in the market than earlier in the year.
The governments in Japan and South Korea have announced definite plans to increase their usage of green and low carbon energy alternatives.
South Korea is taking steps to reduce its dependence on imported fossil fuels and instead invest in domestic renewable energy technology, including wind, solar, hydropower, and biomass. The long-term plan is to increase the renewable energy share from less than four percent in 2011 to 6.1 percent in 2020, and then to 11.5 percent in 2030.
As part of this effort the government has initiated a program, which has included building eight new pellet plants, as well as exploring opportunities to import large volumes of pellets in the future. The goal is to consume five million tons of pellets by 2020, a huge increase from the less than a few hundred thousand tons used in 2011. ... Japan is another Asian country expected to increase importation of energy chips and wood pellets, due in part to the nuclear power plant accident in Fukushima last year. Following the disaster, the Japanese government decided to close down all nuclear plants, at least temporarily. ... In the future, Japan will increasingly rely on renewable energy sources, with biomass likely to be one important supply source. Up until this year, Japan has imported only very limited volumes of wood pellet, primarily from Canada, but it is likely that import volumes of both pellets and energy chips will increase in the coming years.
US ports on the East and Gulf Coasts are bracing for a potential strike at the end of the September after talks broke down between the International Longshoreman's Association (ILA) and the United States Maritime Alliance (USMX), which represents the ports' waterfront management.
Forest products traffic through as many as 14 ports could be affected by a strike, although the extent may be different for each port. These ports handle the vast majority of pulp and paper, lumber and timber breakbulk volumes for the eastern half of the US. In addition, nearly 95 percent of all containerized traffic for the East Coast would be impacted.
The Northwest was largely built on the timber industry's fortunes, but for years the logging and saw mill business has been in decline. Tightened environmental regulations first wreaked havoc on the industry, and then along came the demand-killing recession. According to the Wall Street Journal, though, a West Coast timber "revival" is under way. ... Carol Johnson, executive director of the North Olympic Timber Action Committee, an advocacy group for the timber industry on the Olympic Peninsula, says she's noticed a telling sign of increased timber sales at the Port Angeles port. "More logging ships have arrived in our port in the last two years than we've had in the last 10 years." The ships, she says, are taking logs to Asia. ... ... the Chinese economy got so heated that, in the last year, the government decided to slow things down, for fear of having its bubble burst, American-style. That's meant that timber exports to China, which peaked in 2010 and 2011, have slowed somewhat. ... Here, the timber business has been quietly chugging on, diminished but not vanquished, sometimes doing better and sometimes doing worse. It's had a few good years of late, but not of the old baron-making variety. "The industry is still pretty edgy," says Bryon Monohon, mayor of the once mighty logging town Forks. "We have some mills operating, but nobody's getting rich on them."
The West Coast's beleaguered timber industry is making a comeback, boosting the economies of rural towns that remain otherwise hard hit by the economic downturn. ... The revival comes as California timber harvests and revenue rise for the third straight year, according to state data and timber companies. Timber harvests are up by 20% or more—and revenue is growing by a substantially higher margin—since a post-housing-bust slump sent harvests to a record low in 2009. ... The recovery is due in part to steady demand from overseas. From 2008 to 2011, RISI data show, overseas wood shipments more than doubled. Industry analysts say it's unclear how long that demand will continue. ... "Compared to two years ago, things are a little better," says Ken Cooper, manager of the Chinese Camp mill. Still, he says the industry remains a shadow of what it was 30 years ago, with the 2011 harvest less than one-third of the state's 1988 peak.
As pellet exporters ramp up in the South (soon to be consuming 10 million tons per year of wood), strategic fiber sourcing should accrue to their advantage over traditional pulp and paper competitors. ... Long avoided by pulp and paper, new elements being rolled out among pellet players include guaranteed, long-term volume orders to loggers and timber owners, as well as binding commitments sufficient for bankrolling efficient but expensive harvesting crews.
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