April marks the beginning of a new fiscal year in Myanmar and Myanmar’s official New Years’ Day also falls during this month. The New Year holidays disrupt timber production and harvesting and milling operations cease for around 15 days. Analysts say large domestic stockists have already started accumulating teak logs as the count-down for the log export ban has started.
These stockists are paying premium prices to secure logss anticipating a surge in demand as teak logs disappear from the international market. It is an advantage that teak is one of the most durable species and can be stored for years. Analysts say that fiscal 2013-14, which started on 1st April 2013, will be very interesting as the timber sector adjusts to the log export ban.
Already overseas log dealers have begun securing log quotas from local logging contractors so as to be sure to have adequate stocks. It appears that teak prices will reach new highs in advance of the log export ban. The Myanma Timber Enterprise is expected to easily achieve its export earnings target for this year.
Illegal logging surges in conflict areas
A prominent domestic journal, the Weekly Eleven reported in its 3rd April issue that illegal loggers are taking advantage of the volatile situation between the Kachin and the Myanmar Army to harvest, transport and sell large quantities of timber in a neighbouring country. The local press reports local people as saying the extent of illegal felling and logging has increased since the conflict started in 2011.
The quantity of illegally removed timber is estimated by the analysts to be hundreds of thousands of tons. One analyst said that the availability of cheap illegal timber has a negative impact on legally imported timber in China and prices for timber imported legally have been seriously undermined.
Timber export figures for fiscal 2012-13
The following average teak prices were recorded during the March 22 and 25 sale.
|Grade||Quantity (Tons)||€ per ton|
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.