Myanmar: Teak prices climb in advance of log export ban

ITTO's Tropical Timber Market Report
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The following table illustrates the trend in teak log prices after the log export ban was proposed in October 2012.

Grade Gr-1 Gr-2 Gr-4 Gr-5 Gr-6 Gr-7
12-Jun 4450 3767 3059 2138 1691 1317
12-Jul 3753 3244 2643 2105 1776 1476
12-Aug 3946 3598 2902 2185 1845 1564
12-Sep 4071 3208 2949 2069 1805 1564
12-Oct 4304 3614 2785 2129 1772 1565
12-Nov 4626 3914 2988 2313 1904 1577
12-Dec 4835 3629 2797 2321 2141 1715
13-Jan 4564 3737 3365 2428 2235 1820
13-Feb 4400 4049 3324 2487 2145 1930
13-Mar 4275 4229 3419 2510 2190 1905
13-Apr 5808 5555 3439 2375 2102 1780
13-May 4876 4415 3455 2445 2087 1927

                                                                                                                                      Overseas buyers holding high levels of teak stocks

Analysts report that demand for teak logs is currently slow with India, the main buyer, apparently unable to absorb any further shipments at present. The market for pyinkado and gurjan is even quieter than that for teak.

With the log export ban due to come into force in April 2014, buyers in India and Thailand are reportedly already heavily overstocked. Teak shipments are moving slowly despite pressure from MTE on buyers to speed up shipments of logs that have been purchased.

Some analysts suggest that, at the rate the logs are currently being shipped, the log-stock in Yangon will not be moved before the log export ban commences.

Under these circumstances there could be unshipped logs when the log export ban comes into force but the MTE has not made public how it will deal with unshipped logs.

Reforms in Myanmar can lead to vibrant market economy

The World Economic Forum for East Asia was recently concluded in Nay Pyi Taw, the capital of Myanmar. The forum was attended by executives and policy makers from industry, government, academia and civil society from the around the world.

The New Light of Myanmar newspaper reported on the opening speech by President Thein Sein, in which he emphasised that the country is moving from military rule towards democracy; to end armed conflicts and to reform the economy to one based on free markets.

The Mizzima newspaper reported that in summing up the conclusions from the World Economic Forum the meeting co-chairs agreed that Myanmar and the Philippines are demonstrating the importance of driving reforms in response to peoples’ aspirations.

End May teak auction prices

The following prices were reported from competitive bidding for teak logs on 23rd and 27th May, 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.

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