Myanmar: Change, the theme for 2012

ITTO's Tropical Timber Market Report
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In the words of a local analyst ‘2012 was a very eventful year for Myanmar as there were so many changes’. The newly elected civilian government now includes the internationally known Daw Aung San Suu Kyi who was recently elected to the legislative assembly.

The political party which she leads participated in the 2012 by-elections and won 43 of the 45 seats contested. In other developments, journals have been given more freedom to report on issues affecting the country and express more freely on matters which once had to be avoided.

Myanmar plans log export ban
Taking advantage of the greater freedom in the press many commentators have expressed their views on the deteriorating situation in state-owned forests.

Except for some plantations, almost all the forest land in Myanmar is technically state-owned. Some writers have called for a logging ban. Daw Aung San Suu Kyi also spoke very strongly on the subject of the depleting natural resources during her December 2012 visit to Magwe in Central Myanmar.

The ‘Myanmar Herald’ has reported that the Minister of Environmental Conversation and Forestry (MOECAF), in an interview for the newspaper, indicated that a total log export ban will be introduced to take effect starting April 1st 2014.

It was apparently explained that some 15 months will be needed to clear all current logging contracts. The Herald also reported that the Minister has met with the Chinese Ambassador on several occasions and that the issue of the illegal transport of logs into China was discussed.

News on steps to abolish log exports first came to light during October 2012 and the teak market reacted sharply.

At the moment reports suggest that there are considerable volumes of unshipped logs from outstanding contracts in Yangon and in upper Myanmar and that owners are trying to move the logs out of the country as soon as possible.

Merit of total log ban questioned
Some analysts are questioning the wisdom of a total log export ban as Myanmar needs to build up its industrial capacity to process the higher grades teak logs internally.

As analysts point out, while there are specialist timber processing companies in Myanmar which can process high-end teak products there are too few for Myanmar to become a potential natural teak export ‘tiger’.

Some really high grade teak logs fetch very high prices in the tenders and auctions and analysts argue that the domestic mills are not able to pay as much as foreign competitors.

It is argued that the highest grades should be auctioned in an open market where local and foreign buyers can participate and that, upon winning the bidding, the foreign buyers should be given permission to export the logs. However the proponents of a total log export ban remain adamant at present.

Current log export market erratic
The Myanmar timber market is erratic and unstable at the moment and trends are difficult to discern. The trade in non-teak hardwood logs is much the same as in previous years; fresh logs being sold and shipped quickly while logs which have been harvested some time ago are slow to move.

The pressure is now on buyers to ship logs which have been paid for as indications are that exports beyond the proposed date of entry into force of the log ban will not be entertained.

Myanmar Teak Log Auction Prices (natural forest logs)
Average prices during the Teak tender sales in the final quarter of 2012 are shown below. Prices are Euro per hoppus ton.

Grade Oct-12 Nov-12 Dec-12
4th Quality 4289 5004 4801
Sawing Grade-1 3313 3600 3701
Sawing Grade-2 2782 3046 2778
Sawing Grade-4 2144 2325 2141
Sawing Grade-5 1639 1800 1777
Sawing Grade-6 1364 1482 1639
Sawing Grade-7 1205 1227 1313

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 differ due to quality or girth at the time of the transaction.

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