News  |  29.05.2020


Impact of Covid 19 on timber trade

For information on the progress of the spread and the disease situation: https://www.worldometers.info/coronavirus/ We bring you here, and will continue to do so in the coming weeks, the information provided by our members and partners regarding the tropical timber market and the activities of companies in Europe, Africa and Asia.

INTERNATIONAL

ITTO’s MIS-Market Information Service recently published the results of the survey on the impact of COVID-19 on tropical timber producers, conducted in 9 tropical countries, which together account for more than 50% of world trade in primary tropical timber products: Brazil, Gabon, Ghana, Indonesia, Malaysia (individual responses from Peninsula Malaysia, Sabah and Sarawak), Myanmar, Peru, Thailand and Vietnam.

The results of the survey  show that the measures taken to fight the spread of COVID-19 are having a significant impact on the tropical timber sector, with thousands of workers laid off and demand plummeting. Some governments are providing support for workers and companies, but others are yet to react. Measures vary considerably from country to country and are evolving quickly. The main concern is whether the recovery in demand for tropical timber will be rapid in the post-crisis period.

ITTO’s TFU Number 29 No.1 on Forestry education in the Congo Basin includes the impacts of COVID-19: « These are extraordinary times, and extraordinary measures will be needed to reverse job losses and rebuild revenue flows in the tropical timber sector. »

In addition, the bi-monthly (1-15 May 2020) ITTO Tropical Timber Market Report is available on the website.

UK

According to a Confederation of Timber Industries (CTI) survey, published on May 12th, 2020, the timber supply chain is gearing up for business with almost all businesses to reopen in May.

While the UK timber supply chain is well stocked overall, the survey also showed that garden products and plywood are product categories where there may be shortages. « This survey indicated that, compared to last year, respondents’ sales fell 33% in March and by 66% in April, while 69% reported their cash flow had decreased significantly. »

« While only 12% of the industry are currently operating at maximum capacity, there is confidence that businesses can quickly ramp up productivity. Other respondents were either not open (18%), or are operating at minimal (33%), or medium (35%) capacity. »

« If quarantine measures were lifted, and in light of recent Government advice on returning to work, 54% of businesses said they could return to full capacity immediately, and a further 34% in less than a month. »

See CTI’s survey – Impact of COVID-19 on the timber supply chain.

AFRICA

While the lockdown is gradualy lifting in most African countries, the state of health emergency is still in effect.

Each country already has rapid-response teams, trained contact tracers, logistics routes, and other public-health tools and protocols in place, which they have adapted to respond to the coronavirus. That level of coordination—indeed, of practice—also makes a difference. “We’ve seen that in an epidemic, one day can mean a lot,” Nsanzimana, of the Rwanda Biomedical Center, told me.

As part of the response against COVID-19, the attention and awareness of the entire population. In an interview initiated by the World Bank, Professor Jean-Jacques Muyembe, a virologist of international renown who discovered the Ebola virus in 1976 and who is leading the national response to Ebola and COVID-19 in DRC, remembers: « Community engagement and awareness-raising campaigns are key to winning the battle ».

REPUBLIC OF CONGO

« After 46 days of total containment, the National Coordination for the Management of the Covid-19 Coronavirus Pandemic, with a view to balancing the health interests of the Congolese people and the economic and social survival of the Nation, decided, under the very high authority of the President of the Republic, to gradually decontainment the pandemic by stages, at the end of its third meeting held on Thursday, May 14th. » The gradual decontainment started on May 18th, 2020 and is based on the following principles: vigilance, flexibility and responsiveness.

« Vigilance, first of all, because the progressive and gradual decontainment must not be an opportunity to slacken our collective efforts to respect barrier gestures and the rules of social distancing. »

« Flexibility and reactivity then, because nothing is taken for granted and nothing is set in stone. Thus, the public authorities will not hesitate, if necessary, to reconsider certain measures of progressive deconfinement, particularly in the event of a proven and lasting deterioration in the general or local epidemiological situation. Our progress towards a total return to normalcy will therefore closely depend on a collective discipline at all times. » See the Mémo

The government has defined 2 zones:

  • ZONE 1: Brazzaville and Pointe-Noire – high prevalence: restrictive measures are being eased.
  • ZONE 2: the ten (10) other departments of the country which includes departments free of infection or very little infection: restrictive measures are lifted. Freedom of movement within the localities and the department in which these localities are located will be total. Movement to other infection-free localities will not be restricted.

However, the curfew from 8:00 p.m. to 5:00 a.m. in the morning in force until 31 May 2020, as well as compliance with barrier measures, social distancing measures, and the compulsory wearing of masks in open or closed public spaces will apply throughout the national territory.

The closure of air, land, river and sea borders, except for cargo aircraft, vehicles and vessels carrying goods, shall be maintained.

The movement of the inhabitants of Brazzaville and Pointe-Noire from one city to another and also to other localities in the country, except in cases of imperative need that have been the subject of a mission or service order or the issuance of an exceptional travel certificate by the competent authority, is strictly prohibited.

The resumption of air transport of passengers between Brazzaville and Pointe-Noire is postponed to a later date.

The partial stoppage of activities has led to a significant reduction in the workforce with immediate repercussions on the smooth running of activities affecting in particular production capacity.

The implementation of measures to limit the spread of the epidemic in most countries led to slowdowns in the movement of goods (border closures, restricted movements, movements requiring authorizations, reinforced controls, barrier measures, curfews, reorganization of companies, etc.) causing holding and delays on deliveries.

In spite of the waiting or delayed deliveries, so far most companies are responding to demand by relying on the evacuation of current stocks. The shipment of goods is insured. The deconfinement that started earlier this week in Congo should allow businesses to gradually resume their activities.

After a month and a half of confinement, and the recent measures related to the progressive deconfinement, it is still difficult to foresee the operation of activities at full capacity and for good reason:

  • Employees dispersed and often far from their workplace
  • If the number of cases increases, the government does not rule out a return to containment.

For some companies located in the South of Congo, logging activities (especially production) have resumed normally and the rolling of transport trucks is proceeding without limitation.

Most of the companies in the North continue to evacuate their products through Cameroon.

The port of Pointe-Noire ensures the fluidity of the entries or exits of ships and the loading or unloading of containers. According to the concessionaire of th port, « Congo Terminal has set up a service rotation plan for a limited number of staff to ensure the continuity of operations at the container terminal. Vessels are thus handled on a daily basis 24 hours a day and containers are delivered during a continuous day from 8:00 am to 3:00 pm. »

Therefore, the risk of interruption in log exports is limited. However, most of the sawmills are still closed.

GABON

Gabon has just loaded the largest volume of wood in its history : 26,000 m3 of wood are on a ship bound for China.

“This is a historic load. Because it is the largest load of wood in the history of Gabon. It shows that despite the Covid-19 health crisis, the forest industry is still going strong and exports to China are beginning to pick up. It gives hope,” said the Minister of Water and Forests.

DRC

To date, logging companies are not among the priority services. To date, exports have been suspended. However according to a comment from a buyer, they are loading on daily basis. In addition he highlighted that « Due to the huge volumes of illegal Wengué, the Wengué price is now lower than Tali. That succesed to crash the most stable timber market we still had.”

IVOIRY COAST

Situation COVID-19, Consult the news flash of the SPIB

CHINA

« According to China Customs, in the first quarter of 2020, China’s plywood exports were 1.85 million cubic metres valued at US$787.6 million, a drop of 85% and 82% respectively over the same period in 2019. » with the following main markets the Philippines (131,000 cu.m), UK (129,000 cu.m), Japan (125,000 cu.m), UAE (111,000 cu.m), Vietnam (105,000 cu.m) and Saudi Arabia (104,000). Events are gradually resuming. The 9th World Conference on Wood and Wood Products will be held in Xi’an from 15th – 16th September 2020.

 

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