the timber network

During the last two weeks, demand for teak remained strong and higher grade teak logs had become less available. As a result, many lower grades were sold in the market. Sawlog grade 4 was the most popular type of teak and preferred by many buyers because it is affordable and diverse in use. Fairly high grade sawn timber, and in some cases veneer flitches, can be obtained from these logs. The following chart shows the pattern of tender prices over the last six months:

Myanmar teak prices, September 2007 – February 2008

Grade	Sep 07	Oct 07	Nov 07	Dec 07	Jan 08	Feb 08	6 months avg.
1st Qlty	-	-	-	-	-	-	-
2nd Qlty	€ 5,175	-	-	€ 5,287	€ 5,555	€ 5,401	€ 5,355
3rd Qlty	€ 4,707	€ 4,801	€ 4,902	€ 5,301	€ 5,001	€ 5,149	€ 4,977
4th Qlty	€ 4,259	€ 3,877	€ 3,800	€ 4,423	€ 4,538	€ 4,526	€ 4,237
SG-1	€ 2,828	€ 2,435	€ 2,582	€ 2,688	€ 2,614	€ 2,785	€ 2,655
SG-2	€ 2,504	€ 2,364	€ 2,301	€ 2,198	€ 2,163	€ 2,207	€ 2,290
SG-3	€ 2,013	€ 1,978	€ 1,480	€ 1,527	€ 1,961	-	€ 1,792
SG-4	€ 2,282	€ 2,197	€ 2,148	€ 2,127	€ 1,932	€ 1,871	€ 2,093
SG-5	€ 1,839	€ 1,754	€ 1,725	€ 1,636	€ 1,629	€ 1,819	€ 1,734
SG-6	€ 1,519	€ 1,567	€ 1,382	€ 1,215	€ 1,395	€ 1,416	€ 1,416
SG-7	€ 1,064	€ 1,139	€ 1,045	€ 1,008	€ 1,018	€ 1,061	€ 1,056
SG-8	€ 996	€ 1,128	€ 1,121	€ 1,168	€ 1,239	€ 760	€ 1,064

A steady decline in the price pattern is noted above. Prices are dependent on available forest area, quantity of logs available, grading and exchange rates. Some items may be overpriced at times to respond to immediate requests of buyers; corrections usually follow in the market. Teak log prices are therefore difficult to forecast. Since 2007, the Myanmar Timber Enterprise have sold directly to buyers using six month tender average prices at the time of shipment. Even though tender prices may dramatically rise, tender average price leave little room for maneuverability, although they are used by a number of buyers from the East.

The traded volume of teak from Myanmar is very small compared to the total global log trade. However, as Myanmar is a major supplier of teak, it is expected to remain a strong market player for some time. This also applies to the sawn teak market. In the case of the sawn teak market, however, local industry cannot cope with demand due to the short supply of raw material and other constraints. It has been reported that the offshore saw millers and traders, especially from China and Vietnam, are doing very good business in trading secondary processed teakwood products.