But like other industries, the UK forest sector above all wants clarity on future, in or out of the EU, writes Confor chief executive Stuart Goodall from ttjonline.

Between thinking about this column and writing it, Theresa May resigned and the prospects of a no deal Brexit became more likely.

So, it appears likely that the ‘May deal’ will be set aside and a successor will seek renegotiation. But, hold on, the president of the European Commission, Jean-Claude Juncker has repeated that there would be no more negotiation. Except, Juncker himself will soon be replaced.

And then it appears that Merkel and Macron will be backing different candidates to replace him—important, because these two have had differing views on whether to go (or not) that extra yard (or metre) to reach a deal, i.e. to renegotiate or stand firm. Standing firm increases the likelihood of no deal.

And also influencing those decisions will be the actions taken by timber importers, for example to stockpile or not.

The uncertainty has definitely (negatively) affected the value of sterling and that has given UK producers a competitive advantage. Continued uncertainty will maintain that weakness, a deal will strengthen sterling, no deal is likely to prompt a further fall.

Businesses in the pallet and packaging sector have reported stockpiling of products in warehouses meaning many more pallets are out of circulation. As a consequence, there has been demand for new pallets, while those engaged in pallet repairing have had a quiet time.

The sector relies heavily on migrant labour for tree nurseries and tree planting and a number of mills rely on, especially, eastern European labour. 

Confor has repeatedly raised these issues with the UK government and there are plans for sectors, such as agriculture, to have access to seasonal labour—the problem is that forestry jobs are not truly seasonal, they can extend for up to nine months.

Leaving the EU (and the Common Agricultural Policy) will likely persuade farmers working marginal land to consider tree planting, and certainly in Scotland there’s been a big upturn in interest, though Confor is still seeking to tie down the UK government on future funding for planting.

Looking across the sector as a whole, staying in the EU would be the least disruptive option for the industry. Further delay and uncertainty over Brexit will likely keep sterling depressed, but businesses don’t like uncertainty.

The one advantage that the domestic industry has is that it’s the domestic industry. Timber is supplied/ secured within the UK (with some ‘exports’ of logs, mainly to the Republic of Ireland) and the final market is in the UK. Put simply, UK-grown timber suppliers are well placed to maintain continuity of supply to their customers. This should be largely blind to deal/ no deal scenarios.

BC Invites Feedback as Part of Interior Forest Sector Renewal Process

The government of British Columbia (BC) announced that it is accepting public input in shaping the BC Interior forest sector, according to Canadian Forest Industries.

“The previous government failed to help the forest sector when it had a chance, eroding the public’s trust in BC’s forest sector operations and diminishing its competitive advantage,” said Minister of Forests, Lands, Natural Resource Operations and Rural Development Doug Donaldson in a statement. 

“We are taking action and making different choices by asking for local input and insight into how we want to shape a prosperous, competitive and culturally sensitive Interior future forest sector.”

According to a press release, the Interior Forest Sector Renewal process, announced by the B.C. government in April this year, aims to act on the factors contributing to mill closures.

Public engagement will focus on a discussion paper that has been developed in one of two complementary, parallel streams within the Interior Forest Sector Renewal process. From July 18 to Oct. 11, 2019, the public is invited to provide written submissions or feedback on the discussion paper through an online survey.

In the other Interior Forest Sector Renewal stream, the province and coalitions in each timber supply area, made up of industry, labour, First Nations and leaders in forest-dependent communities, are working together to develop a ‘new vision’ for the Interior forest industry at the regional level. The coalitions have been tasked with recommending sustainable solutions to renew the Interior forest sector.

A What We Hear report on feedback received through this process will be released in late fall 2019. Policy direction based on this feedback is anticipated for spring 2020.

Vietnam Forestry Sector Urged to Fulfil Exports Goal

According to Vietnam News Agency, the forestry sector has been demanded to take measures to achieve the exports target of US$11 billion for this year.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong made the request at a meeting of the Vietnam Administration of Forestry (VNForest) in Hanoi on July 5.

He asked the sector to perfect institutions so as to implement the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT) between Vietnam and the European Union (EU), which took effect on June 1, 2019.

Mr. Cuong said under this agreement, many parties, including people, society, the state as well as foreign partners, will take part in managing the export of forestry products.

Each agency and official must improve their awareness of the agreement to seek benefits for the sector, the official added.

Vietnam earned nearly US$5.23 billion from forestry exports in the first half of this year, up almost 20 percent year-on-year.

According to Deputy Director General of VNForest Pham Van Dien, to achieve the exports target of US$11 billion, the sector will increase coordination with other ministries and sectors to prevent trade frauds by some exporting companies and strictly control the import of timber from high-risk countries.

It will also enhance cooperation with localities to multiply the successful connections between wood processing companies and afforestation households, thus ensuring the legality of domestic timber supply. This will help increase the added value and reduce production costs for Vietnamese wood products, he added.

At the meeting, VNForest reported the forestry production value grew 4.53 percent in the second quarter of this year, 0.08 percent higher than that in the same period last year.

It said amidst the declines in both export volume and value of some agricultural products, the forestry sector’s stable growth has made it a ‘helping hand’ of Vietnam’s agriculture.