Deputy PM - EUDR will undermine competitiveness of Malaysia’s commodity products
The implementation of the European Union Deforestation Regulation (EUDR) is likely to increase production costs for Malaysia’s commodity-based products making them less competitive in global markets according to Malaysia’s Deputy Prime Minister, Fadillah Yusof.
The Deputy PM said the EU is currently drafting guidelines for the due diligence report implementation mechanism which may be released by the third quarter of this year.
Malaysia and 13 other commodity producing countries including Brazil, Ghana and Indonesia have submitted a letter to the EU Commission stressing the need for the Commission to engage with producing countries.
Malaysia held bilateral meetings with Indonesia to discuss the EUDR implementation and it was agreed they will send a joint palm oil mission to Europe to explain to the EU Commission the negative effects this regulation could have especially on smallholders.
Securing land for workers dormitories the new challenge
Furniture manufacturers and traders in Johor are appealing to the government to legalise their staff dormitories that have been built on land earmarked for agriculture.
They also want the government to provide land near industrial areas for the setting up of such accommodation facilities which are mandated by law.
Muar Furniture Association chairman, Steve Ong, said under the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446), employers are required to provide living space for their workers.
However, the furniture industries face a dilemma as there is limited industrial land on which to build such facilities. Because of this, most of the accommodation has been built on agricultural land which contravenes the law.
Malaysian export statistics
For most products the value of 2022 exports exceeded those in 2021 but the 2022 value of exports for several products were still below those achieved in 2019.
The good performance in wooden furniture exports in 2022 stands out having exceeded that in 2019.
Record trade in 2022
Malaysia’s trade in recorded a new milestone to reach RM2.8 trillion in 2022. Penang remained the top exporter with a share of 31 percent, followed by Johor (19%), Selangor (18%), Sarawak (9%) and Kuala Lumpur (5%).
China and Hong Kong together took 20 percent of total exports in 2022, down from 22 percent in 2021. It is expected that China’s exit from the zero-Covid restrictions in January this year will boost its growth from three percent in 2022 to around five percent for this year.
This will lift imports from Malaysia and help to offset the softening demand in other countries, especially Europe and the US that at risk of falling into recession.
Lower domestic inflation forecast
The Statistics Department of Malaysia has reported core inflation in December 2022 was 4.1 percent, marginally lower than the record-high 4.2 percent rate in November 2022.
Prior to December 2022, the country’s core inflation had been rising for 14 straight months.
A research unit in AmBank noted that private consumption continues to be strong. AmBank Research expects a ‘modest’ three percent inflation rate for 2023.
The slowdown in inflation is partly a reflection of the stronger ringgit, which has appreciated by almost 10% against the US dollar since the low in November 2022. Also, lower commodity prices helped in containing price increases.
Market access barriers could undermine investment in afforestation and manufacturing
Sabah’s timber industry will face obstacles in the future that require stakeholders as well as players to work together.
Sabah Timber Industries Association (STIA) president, Tan Peng Yuan, said one of the issues is certification.
The STIA understands the EU will enforce regulations under EUDR (European Union Deforestation Regulation) that may limit market access adding that ‘if history repeats itself’ it will not be long before other countries follow suit.
Tan pointed out that the success of the State’s plantation programme depends heavily on investors being assured of markets. He expressed concern that market access may face certification barriers and the impetus for investment in planting and manufacturing could be lost.
Indonesia ready to boost exports of wood products to the US
The Indonesian government and the business sector will work together to boost exports of wood products to the US, a market considered to have great prospects.
Umar Hadi, Director General for America and Europe in the Ministry of Foreign Affairs said that the existing challenges will be solved together so that the market share of Indonesian wood products in the US continues to increase.
The Indonesian Ambassador to the US, Rosan P Roeslani, supports the idea of expanding exports to the US saying demand for Indonesian wood products in the US continues to grow supported by furniture products for housing and office needs.
According to the Director General of Sustainable Forest Management at the Ministry of Environment and Forestry (KLHK,) the US is the second largest export destination after China and is worth US$2.23 billion.
General Chairperson of the Indonesian Forestry Community Communication Forum (FKMPI), Indroyono Soesilo, stated that Indonesia has the opportunity to increase exports to the US as there is an advantage since Chinese made goods face high import duties.
In addition, Indonesia also benefits from the Generalised System of Preferences (GSP) facility. He suggested intensive promotion in the US and the building of a permanent exhibition centre in the US.
Exports of Indonesian furniture and crafts set to increase
The Indonesian Furniture and Craft Industry Association (HIMKI) is optimistic that Indonesia's furniture and craft exports will increase HIMKI estimates that exports could rise over eight percent year-on-year to over US$3.5 billion.
HIMKI Chairman, Abdul Sobur, commented that, while export prospects have been subdued, the Association is optimistic on prospects for the year adding "Growth in 2023 will be supported by demand in the US which is expected to rise more than nine percent".
Abdul said the demand from the European Union and other European countries is expected to increase by around two percent this year compared to 2022.
Pilot project on multi-business forestry
The Indonesian Chamber of Commerce and Industry (Kadin) Regenerative Forest Business Sub Hub (RFBSH) initiated a Multi-business Forestry pilot project to test whether multi-business forestry and agroforestry is viable economically, ecologically and socially.
Kadin's Deputy Chairman for environment and forestry, Silverius Oscar Unggul, said there will be five pilot projects testing the strengthening of the sustainability management in productive natural forests, the development of the potential for sustainable management in non-productive natural forests and the collaboration on conflict resolution towards sustainable multi-business models.
Other projects will be on multi-business model management based on the diversity of forest resources and management for carbon sequestration and storage.
Indonesia/ WRI collaboration to pursue 2030 FOLU Net Sink targets
Indonesia's Environment and Forestry Ministry and World Resources Institute (WRI) will collaborate to pursue goals of the FOLU Net Sink 2030 such as reducing emissions from the forestry and other land use sectors and carbon absorption.
Siti Nurbaya Bakar, Indonesia’s Minister of Environment and Forestry stated that the collaboration will contribute to the global efforts to reduce greenhouse gas emissions by increasingly tapping into the potential of tropical rainforests.
The Minister also noted that the collaboration aims to identify techniques, methods and practices in satellite imaging as a means to map lands.
In related news, Deputy Minister of Environment and Forestry, Alue Dohong, said the forestry and other land uses (FOLU) result-based payments, including the REDD+ scheme will remain an instrument to support reducing greenhouse gas emissions and achieving Indonesia's NDC target.
He added that this scheme could increase the opportunities for carbon trading. Alue said “principles of good governance need to be properly reflected in cooperation and collaboration with various development partners”.
Indonesia's 2022 economic growth among highest in G20: minister
Indonesia’s economic growth of 5.3 percent in 2022 was among the highest in G20 member countries according to Investment Minister, Bahlil Lahadalia.
Of the G20 countries, Saudi Arabia scored the highest economic growth of 8.7 percent followed by Spain with 5.5 percent and Indonesia with 5.31 percent growth.
Investment contributed positively to national economic growth the Minister said. According to the Ministry, investment of Rp1,207.2 trillion (US$80 billion) was received in 2022 with an additional investment of Rp318 trillion (US$21 billion) recorded in the micro, small, and medium enterprise (MSME) sector which generated employment for at least 1.3 million people.
New export record
Despite uncertain global economic conditions exports of Indonesian wood products in 2022 continued to grow.
Data from the Ministry of Environment and Forestry (KLHK) analyses by the Association of Indonesia Forest Concession Holders (APHI) show Indonesia's exports of wood products in 2022 reached US$14.51 billion.
This was a significant increase in export values compared to 2021 which were recorded at US$13.56 billion.
The export value for wood products in 2022 was a record surpassing the previous record in 2021. In 2022 paper products contributed the most to export earnings at US$4.37 billion, up 18 percent year-on-year followed by wood pulp US$3.73 billion, up 15 percent year-on-year.
The other wood products that made a large contribution were wood panels US$2.86 billion and furniture worth US$2.26 billion.
Market diversification - biomass trade with EU member states
Markets such as Bulgaria, Lithuania, Slovenia and other Eastern European countries are to be the target for expanded wood product exports in the EU.
In addition to the current products exported such as paper, panels and furniture efforts will be made to export wood pellets according to the chairman of the Association of Indonesia Forest Concession Holders (APHI), Indroyono Soesilo.
He added there is a skyrocketing demand for Indonesian wood products in Eastern European member states.
In Bulgaria there was a 100% increase in Indonesian wood product exports, a 400 percent increase in Croatia, 125 percent in Lithuania and a massive jump in exports to Slovakia.
However, currently the volumes are small but there are opportunities for growth. Indroyono said growth in nontraditional market countries is an opportunity to increase exports amidst the economic challenges of 2023.
Indonesian furniture for Swiss market
The Minister of Cooperatives and SMEs, Teten Masduki, has pointed out that, as a results of discussion with the Swiss Secretariat for Economic Affair, an Indonesia-Switzerland FTA had been ratified which will benefit businesses in both countries.
As a follow-up the Minister suggested members of the Indonesian Furniture and Craft Industry Association (Asmindo) take advantage of the import duty exemption built into the FTA.
Government to encourage downstreaming of 21 commodities
The Indonesian government’s investment policy will remain focused on investment in downstream manufacturing in 21 commodity sectors in order to attract investment worth over US$500 billion by 2040 according to the Minister for Investment, Bahlil Lahadalia.
The ministry has prioritised investment needs of 8 sectors namely minerals, coal, oil, natural gas, plantations, marine, fisheries and forestry. The 8 sectors cover 21 commodities: coal, nickel, tin, copper, bauxite, steel, gold, silver, asphalt, oil, natural gas, coconut, rubber, biofuel, logs, pine resin, shrimp, fish, crab, seaweed and salt.
UNDP Funding for Climate and Sustainable Forest Management
Indonesia has received a first disbursement of US$46 million from the US$103.8 million approved by the Green Climate Fund (GCF), following the success in emission reduction from Indonesian forestry sector in the period 2014 to 2016.
The United Nations Development Programme (UNDP) has transferred the funds to the Indonesian Environment Fund (IEF) which has a mandate to manage environment funds.
The IEF was officially formed to channel environmental and climate funds to support achievement of Indonesia’s Nationally Determined Contribution (NDC) commitments to achieve net-zero emissions by 2060 by reducing Green House Gas (GHG) as part of the global mandate and commitment to combat climate change.
ADB to support rural livelihood and agroforestry
The Asian Development Bank (ADB) signed a US$15 million loan facility with PT Dharma Satya Nusantara Tbk (DSNG) to help the company expand sustainable wood processing, rural livelihood development and climate resilient agroforestry in Java.
The ADB money will be used to implement energy-efficient and water-saving processes and procurement of cultivated native Indonesian Sengon and Jabon saplings.
DSNG sources timber from Central, East and West Java. The majority of Sengon and Jabon trees are cultivated by smallholders and are inter-cropped with coffee, corn and rice. As well as enabling the utilisation of otherwise unproductive land, intercropping trees with food crops can reduce erosion, enhance soil health and in many cases improve crop yields.
Uncertainty looms over Myanmar economy: World Bank
Myanmar’s economy remains subject to significant uncertainty with ongoing conflict disrupting businesses according the World Bank ‘Myanmar Economic Monitor’ published this year.
It says, while some firms show signs of resilience, household incomes remain weak and Myanmar’s potential for growth has been severely weakened.
Mariam Sherman, the World Bank’s country director said “while conflict remains, families suffer from insecurity and violence. Firms, particularly those in the agriculture sector, are experiencing higher costs and delays”.
The World Bank expects that a gradual economic recovery could be seen in the near term and growth is estimated at three percent year ending in September. However, economic activity continues to be adversely affected by conflict, electricity shortages and changing regulations, with per-capita gross domestic product expected to remain about 13 percent below pre-Covid levels.
The depreciating kyat, high global prices and ongoing logistics constraints have caused import costs to rise sharply and these shocks fuel inflation and further reduce real incomes, said the report.
“Losses in education along with increased unemployment and internal displacement will reduce already low levels of human capital and productive capacity over the long term the report says.
The report recommends a more unified and market-oriented foreign exchange system which would help stabilise the economy, reduce inflation and remove market distortions.
Inflation in check
The annual rate of inflation based on the Wholesale Price Index was 4.73 percent in January 2023 compared to 4.95 percent in December 2022.
The decline in January inflation was primarily contributed by mineral oils, chemicals and chemical products, textiles, crude petroleum and natural gas, textiles and food products.
The wholesale price index for manufacturing increased to 141.3 in January, 2023 from 141.1 for December 2022.
Out of the 22 NIC two-digit groups for manufactured products, 12 reported price increases while 10 saw declines. The increases were mainly contributed by basic metals; tobacco products; electrical equipment; computer, electronic and optical products; motor vehicles, trailers & semi-trailers; other transport equipment; printing and reproduction of recorded media.
Some of the groups that saw decreased prices are other manufacturing; textiles; chemical and chemical products; fabricated metal products except machinery and equipment and rubber products.
The indices for wood panels, sawnwood and veneer sheets all declined in January 2023 against December 2022.
Launch of the ‘Trees Outside Forests in India’
In a press release the Government of Rajasthan’s Forest Department and the US Agency for International Development (USAID) announced the launch of the ‘Trees Outside Forests in India (TOFI)’ programme in
Rajasthan which will bring together farmers, companies and other private entities to rapidly expand tree coverage outside of traditional forests in the state.
The new initiative will enhance carbon sequestration, support local communities and strengthen the climate resilience of agriculture, thereby supporting global climate change mitigation and adaptation goals.
Wood and Wood Products (W&WP) trade highlights
•According to statistics from Customs W&WP exports in January 2023 reached US$806 million, down 39 percent compared to December 2022 and down 49 percent compared to January 2022.
Of this, WP exports were US$491.7 million, down 44 percent compared to December 2022 and down 58 percent compared to January 2022.
•Vietnam's W&WP exports to South Korea in January 2023 were valued at US$63.5 million, down 36 percent compared to December 2022 and down 39 percent compared to January 2022.
Due to the long Vietnamese Lunar New Year holidays trade was interrupted. In addition, high inflation and rising interest rates in South Korea depressed demand.
•In January 2023 exports of kitchen furniture reached US$64 million, down 39 percent compared to December 2022 and down 46 percent compared to January 2022.
•In January 2023, exports of bedroom furniture stood at US$103 million, down 38 percent compared to December 2022, down 54 percent compared to January 2022.
•Due to the New Year holidays wooden handicraft exports to the EU in January 2023 dropped sharply, earning just US$18.5 million, down 34 percent compared to December 2022 and down 52 percent compared to January 2022.
•Vietnam's imports of wood and wood products in January 2023 were valued at US$120.5 million, down 42 percent compared to December 2022 and down 52 percent compared to January 2022.
•Imports of wood raw materials from China in December 2022 reached 36,890 cubic metres at value of US$17,515 million, down 3.5 percent in volume but up two percent in value compared to November 2022.
Compared to December 2021 imports were down 42 percent in volume and 45 percent in value. In 2022 imports of wood raw material from China amounted to 650,340 cubic metres with a value of US$350.65 million, year-on-year, down 35.0 percent in volume.
Challenges for Vietnam’s wood industries in January 2023
There was a decline in W&WP exports to almost all markets in January 2023. Exports to the US, the top market, were valued at US$367.3 million, down 60 percent compared to January 2022, followed by the Chinese market (US$132.9 million, down 1%) and Japan (US$129.1 million, down 13%).
According to the Import and Export Department under the Ministry of Trade and Industry the US housing sector is expected to remain weak in 2023 so US demand for wooden furniture will slow.
The generally weak demand in international markets notably Japan and South Korea has led to reduced orders and downward price pressure. Although the Chinese market has reopened the Chinese domestic supply chain has not fully recovered which is hampering the recovery in sales.
Under the current conditions the Import and Export Department forecasts that Vietnam’s W&WP exports in 2023 are not bright as consumers in target markets are continuing to tighten spending under the pressure of inflation.
However, some markets in Europe, especially non-EU countries remain healthy for living room and dining room furniture, products in which Vietnam is very competitive.
The Ministry of Industry and Trade has been actively coordinating with relevant ministries and industry to implement trade promotion activities to support the exporters build and promote Vietnamese brands through national programmes on trade promotion and programmes to support enterprises improve product design and development capacity.
The Ministry of Industry and Trade has directed overseas trade promotion organisations to regularly support Vietnamese enterprises, help wood industry associations gather market information and help exporters take advantage of existing FTAs to improve market access.
At the same time the Ministry urges relevant agencies to provide early warnings of market risks associated with trade protection measures in various countries.
Forecasts and suggestions for manufacturers from VIFOREST
Vietnam’s wood sector has been targeting five major markets; the US, Japan, China, South Korea and the EU.
The current global situation and problems facing these markets for W&WP from Vietnam can hardly give an optimistic forecast on Vietnam’s W&WP trade.
According to Vietnam Wood and Forest Products Associations (VIFOREST) the growth of W&WP exports in 2023 is expected to be up between seven to nine percent year-on-year far below the growth rate over the last 10 years.
With this expected growth W&WP exports in 2023 will be between US$17-17.5 billion. To face the downturn in the major markets Vietnamese traders have been advised by VIFOREST to adopt the following measures and solutions:
•expand utilisation of domestic wood raw materials to reduce input costs
•apply improved technologies to enhance labour productivity
•apply digital transformation to reduce production costs
•promote low-emission production
•coordinate with localities to build specialised wood processing and trading zones in various regions of the country
•enhance W&WP trade promotion with attention given to attending international trade fairs for wood products, wood technologies and wood manufacturing machines
•diversify export markets and increase customer outreach through improving designs, focusing on high-value commodity groups, opening trade representation in key markets
•utilise of the advantages gained from the Free Trade Agreements Vietnam has concluded with important trade partners
Japan’s economy rebounded but at a slower pace than expected in the final quarter of 2022 despite the impact on growth from reopening of the country’s borders to visitors and a recovery in private consumption.
The economy grew just 0.2 percent in the final quarter of 2022.
The modest growth meant that Japan avoid a technical recession but the rebound was weak highlighting the difficult task for the incoming next Bank of Japan governor as he attempts to unwind the massive stimulus programme without derailing the fragile recovery.
Inflation at 40-year high
With core consumer inflation hitting its highest levels in 41 years, there are signs that wage growth in Japan is about to begin trending upwards.
But, where job security is prioritised over pay, there will need to be a long term commitment on the part of companies to lift wages and the issues of structural and demographic reforms have to be addressed to create labour market flexibility.
There was a partial recovery in the value of wooden kitchen and bedroom furniture imports in 2022. The value of 2022 imports of wooden kitchen furniture (HS940340) were up 15 percent year-on-year and the value of wooden bedroom furniture rose 25 percent in 2022 compared to 2021.
There was an encouraging rise in imports of both kitchen and bedroom furniture in the first half of 2022 but demand sagged in the second half of the year as households saw costs rising and the yen weakening which pushed up import prices.
In contrast to the year-on-year rise in imports of wooden kitchen and bedroom furniture, the value of wooden office furniture (HS940330) imports in 2022 was down 10 percent on 2021.
Decline in 2022 sawnwood imports
According to data from China’s Customs, 2022 sawnwood imports totalled 26.66 million cubic metres valued at US$7.53 billion, a year-on-year decreases of eight percent in volume and four percent in value on 2021. The average price for imported sawnwood in 2022 was US$282 per cubic metre, a year-on-year rise of four percent.
China's sawnwood imports fell in 2022 because of the impact on manufacturing of the widespread lockdowns, the supply chain disruptions brought on by the Russian invasion of Ukraine and the global shipping disruptions.
Of total sawnwood imports sawn softwood imports fell 12 percent to 17.33 million cubic metres accounting for 65 percent of the national total. The proportion of sawnwood imports dropped about three percent year-on-year. The average price for imported sawn softwood was US$234 per cubic metre, up six percent year-on-year.
Sawn hardwood imports rose one percent to 9.33 million cubic metres valued at US$3.48 billion, a year-on-year increase one percent in volume but a decrease one percent in value in 2022. The average price for imported sawn hardwoods was US$373 per cubic metre, a year-on-year decline of two percent.
Of total sawn hardwood imports, tropical sawn hardwood imports were 6.35 million cubic metres valued at US$1.91 billion, a year-on-year increase of six percent in volume and two percent in value and accounted for about 24 percent of the national total, up three percent on 2021 levels. The average price for imported tropical sawn hardwood was US$301 per cubic metre, down four percent year-on-year.
Russia remains the largest supplier of sawnwood imports
Russia remained the largest supplier of China’s sawnwood imports in 2022 but imports from Russia fell seven percent to 13.09 million cubic metres, accounting for 49 percent of the national total.
The proportion of China’s imports from Russia remained the same level year-on-year.
China’s sawnwood imports from Canada and US decreased 20 percent and 14 percent respectively to 1.36 million cubic metres and 1.13 million cubic metres in 2022. Other suppliers of sawnwood imports in 2022 saw increased business in many cases.
Jump in China’s sawnwood imports from Sweden
China’s sawnwood imports from Sweden surged 66 percent to 660,000 cubic metres in 2022. This was in contrast to imports from Sweden falling 45 percent in 2020 and by 57 percent in 2021 due to the pandemic.
China’s sawnwood imports from Sweden began to rise in 2012 and jumped 136 percent to more than one million cubic metres in 2019.
The reason for the increase in China’s sawnwood imports from Sweden for many years is that the quality of the sawnwood is high and is suitable for manufacturing furniture and construction.
Rise in sawn hardwood imports
Sawn hardwood imports rose one percent to 9.33 million cubic metres valued at US$3.48 billion, a year-on-year increase of one percent in volume, but a decrease of one percent in value in 2022.
Thailand, Russia and US still are the main sources for China’s
sawn hardwood imports in 2022 and accounted for 42 percent, 13 percent and 11 percent respectively accounting for 66 percent of the national total in 2022.
China’s sawn hardwood imports from Thailand and Russia rose five percent and 4.7 percent to 3.97 million cubic metres and 1.19 million cubic metres respectively. In contrast, China’s sawn hardwood imports from US declined nine percent in 2022.
Thailand the largest supplier of sawn tropical hardwood imports
Thailand was the largest supplier of sawn tropical hardwood to China in 2022.
Sawn tropical hardwood imports from Thailand totalled 3.966 million cubic metres valued at US$990 million, a year-on-year increase of five percent in volume, but a drop three percent in value in 2022.
Thailand’s market share for sawn tropical hardwood exports to China rose to 62 percent in 2022, making Thailand the number one supplier.
The Philippines and Gabon were the second and third largest supplier of China’s sawn tropical hardwood imports in 2022. Sawn tropical hardwood imports from the Philippines and Gabon amounted to 654,000 cubic metres and 603,000 cubic metre, a year-on-year increase of one percent and 11 percent respectively in 2022.
The top three countries supplied 82 percent of China’s tropical sawn hardwood requirements in 2022, namely Thailand (62%), Philippines (10%) and Gabon (9.5%) in 2022.
The average price for imported tropical sawn hardwood was US$301 per cubic metre, down four percent year-on-year. CIF prices for most suppliers of China’s sawn tropical hardwood imports fell in 2022.
The CIF prices for the top suppliers of China’s tropical sawn hardwood imports, Thailand, Philippines and Gabon declined seven percent, five percent and one percent respectively in 2022.
Guidelines on sustainable management of national forests
The National Forestry and Grassland Administration has released a guideline on sustainable management of national forest reserves.
A government statement says “With the goal of cultivating a healthy, stable, high-quality and efficient forest ecosystem the "Guide" proposes a framework system, planning and design system, classified cultivation system and comprehensive management for the sustainable management of national reserve forests based on the business philosophy of close to nature.
Combining the natural development process and management characteristics of forests to divide stand development stages to realise large-diameter timber production; divide national reserve forests into management type groups to realize classified management; propose management parameters, operation methods and methods for 135 major national reserve forest tree species The economic evaluation method realises precise cultivation and is generally advanced and innovative.”
The release of the Guidelines is aimed at implementing the requirements of the State Forestry and Grassland Administration's 2015 Central Document No. 1 and the ‘Overall Plan for Ecological Civilization System Reform’ on the construction of the national reserve forest system.
Output value of national forest industry
According to a statement at a recent national conference the output value of China’s national forest industry in 2022 totalled RMB8.04 trillion (US$1.17 trillion).
The country is now among the world's leading players in terms of the scale and growth rate of its forestry industry.
China has continuously expanded the range of its forest products. At present there are over 10,000 different kinds of wood and bamboo products available across the country. China has meanwhile planted over 6.67 million hectares of bamboo.
With an annual output value approaching RMB320 billion, the country's bamboo sector has helped over 15 million people working in the industry to earn annual per capita income of more than RMB10,000.
Over the past 10 years China has planted 40 million hectares of commercial forests with the output value of commercial forestry products surpassing RMB2.2 trillion, more than twice that of a decade ago.
China has pursued the high-quality development of its forest. The annual output value of the three major subsectors of the forest industry, wood and bamboo, commercial forest products and forest-related tourism has come to exceed over RMB1 trillion.
Chenglingji the new designated port for imported logs
Chenglingji Port has been designated as a new port for imported logs. Chenglingji Port is one of the eight deep water ports on the Yangtze River and the only national first-class Port in Hunan Province.
The Yangtze River has 163 kilometres of river bank in Yueyang of which almost 12 kilometres is within the scope of Chenglingji New Port area.
Supervision will be within the Chenglingji Xingang Customs Supervision
Zone extending over some 420 sqm and divided into three zones: inspection fumigation and wharf operations.
After the project is officially operational more than one million cubic metres of logs can be directly imported annually and this is expected to generate savings of more than 40 million yuan in logistics costs for the enterprise every year. At the same time 40,000 TEU containers of imported logs will be handled yearly.
Industrial wood processing centre for Guigang City
Guigang City, Guangxi Zhuang Autonomous Region has establishied 66,700 hectares of national forests in order to create a ‘wood capital’ for South China.
The entire supply chain will be accommodated. At present and there are more than 3,500 enterprises involved representing the whole supply chain for wood processing.
At present, nine upstream and downstream industries have been established in Guigang City producing rotary veneer, wood panels, veneer, furniture parts, panel furniture along with hardware and adhesives.
Centralised procurement of African timber
A timber trading centre in Dongyang City, Zhejiang Province has been cooperating with African enterprises for many years and cooperated signed agreements worth RMB7.65 million during the Forum on China-Africa Economic and Trade Relations and China-Africa Cultural Cooperation and Exchange Week.
The Dongyang Wood Trading Center is a wood import trading and distribution platform integrating imports, trade, processing, bond, storage, logistics and financial services. The wood supply chain has been shortened and is saving enterprises around 10 percent in logistics costs through centralised procurement and unified logistics transportation services.
Currently, 64 leading companies have entered the trading centre trading over 30 timber species from more than 20 countries. From January to November 2022 the value of warehousing transaction was RMB3.4 billion, the value of invoice-issuing transaction was RMB2.2 billion and the value of bonded trade was RMB2 billion.
Centralised procurement of African timber in the Dongyang Timber Trading Center supports expansion of furniture production as the entire industrial supply chain has been constructed.