West African markets maintain stability
Jul 07, 2009. Asian buyers have continued to make regular purchases and request shipments of a range of favored species that are rather more limited than in 2008 and earlier. There are some small signs of more interest from European buyers where there have been reports of very low stocks.
Jul 07, 2009. /Lesprom Network/. Market stability has been maintained in West Africa throughout June in price and volume, ITTO reports. Asian buyers have continued to make regular purchases and request shipments of a range of favored species that are rather more limited than in 2008 and earlier. There are some small signs of more interest from European buyers where there have been reports of very low stocks. Ordinarily, this would be an indicator of an imminent resurgence in new purchases but given the present more difficult financial conditions, there is some reluctance to commit beyond small volumes against orders already in hand. Buyers do seem to be well aware that any return to even moderate volume trading levels could trigger very long lead times for new contracts.
Producers, on the other hand, have tailored production to maintain stability and cater for the current demand. They are not speculating if or when European buyers will return to the market. Some producers reported as still having some quite large overlying stocks of certain species. One positive trend in the market is the increasing demand for certified timber. The Netherlands and the UK have taken the lead in demanding certified timber and the UK government in particular is becoming more active in regulating the use of certified timber in central and local government projects. Some African producers have engaged in the certification process and are able to supply fully certified timbers. Such producers are in the minority, however, as most mills have not seen enough demand for certified timber to push them to undertake certification initiatives.
Looking at the first half of the year, many West African producers may well feel they made the right move early enough to survive an extremely difficult six months, with the prospects for the second half perhaps rather better than expected. The effects of the global economic downturn on African timber industries may have not yet impacted fully on the economies of those countries that depend heavily on revenues from timber and timber products exports. Nevertheless, mill closures and production cut backs have been occurring over the last six months, resulting in largescale unemployment for a number of workers in the timber sector.