Myanmar: High log stocks in importing countries

Source:
ITTO's Tropical Timber Market Report
Views:
3268
  • text size

Until this month teak sales were brisk but now some dealers are saying that, because many buyers have accumulated high levels of stocks, the market for teak logs is now rather quiet.

Analysts say that buyers in India and Thailand are overstocked with teak logs and that companies in China can get a steady supply of teak overland and are not keen to purchase teak logs brought in by sea because of the addition of shipping freight costs lower profit margins.

During the second half of May teak log shipment were slow and vessels were waiting for cargo. Analysts say to slow market is partly because buyers had over extended purchases to increase stocks and that this had created a financial strain for them.

Analysts do not expect the current situation to persist because buyers are confident that stocking teak, unlike stocking less durable species, poses little risk since teak is very durable and can be held in stock for a long time.

Buyers are anticipating that the value of their teak log stocks will increase after the log export ban is introduced in April next year.

Timber exports to the EU and the US

The May 17 issue of the domestic newspaper Daily Eleven News reported that, according to Barber Cho of the Myanmar Timber Merchants Association (MTMA), Myanmar may be able to start shipping timber that conforms to the EU timber regulations from 2015.

In the interim the MTMA will publish guidelines to help standardise export documentation and enable exporters to provide the necessary paperwork required by importers in the EU and the US to verify the legality of timber exports.

The MTMA will publish a document 'The Official Compilation of the Export Documentation in Compliance with the National Rule and Regulation of the Timber Trade in Myanmar'.

Procedures for clearing export containers to be streamlined

It has been reported that the procedures for checking export containers of wood products will be streamlined.

At present every container of wood products is inspected twice, once by the Forest Department when stuffing is complete and again by Customs officials prior to the loading of the container onto a vessel at the container terminal.

Exporters have frequently complained that this double check is unnecessary. News that the Customs inspection at the container terminal will be eliminated starting June 1, 2013 has been welcomed by the industry.

Under the new system a container inspected and sealed by the Forest Department and will be cleared for shipping after passing through scanners at the container terminal. These changes will eliminate delays and expedite shipments.

Myanmar’s GDP expected to grow

Myanmar's economy expanded 6.5% last year and is set for further modest growth of 6.75% this year driven mainly by production and sales of natural gas according to the IMF. The IMF also expects increases in foreign investment to help narrow the widening current account deficit.

End May teak auction prices

The following prices were reported from competitive bidding for teak logs on 23rd and 27th May at the most recent Myanma Timber Enterprise tender.

Grade Quantity (Tons) US$ per hoppus ton
4th Quality 10 6603
Sawing Grade-1 20 4876
Sawing Grade-2 21 4415
Sawing Grade-4 450 3455
Sawing Grade-5 222 2445
Sawing Grade-6 100 2087
Sawing Grade-7 182 1927

Hoppus ton=1.8m3; All grades, except SG-3/5/6, are length 8’ x girth 5’ &up. SG-3/4/6 are girth 4’ &up. SG-3 grade is higher than SG-4 but with lower girth and price. Prices vary due to quality and/or girth at the time of the transaction.

Post comment