Producers in West Africa report that the rather quiet but sustained demand continues with new orders flowing at a steady but unchanged pace.

European buyers have not yet returned in any strength to negotiate contracts for the fourth quarter. This is a slower resumption of the autumn and winter round of purchases. Analysts suggest this may be because prices are fairly stable and there is no immediate pressure from a lack of availability.

Potential in Middle East improves

Producers report that mills are busy preparing shipments for the Middle East and China but order levels have not improved beyond the steady flow seen over the past three months.

The real estate market in just one country, Saudi Arabia, was valued at more than US$ 0.37 trillion last year and is expected to top US$0.4 trillion in five years. Currently, the Saudi housing and construction market is growing at an annual rate of between 5 and 7 percent due to high demand for housing development and commercial projects. Estimates suggest that the Kingdom will need more than 5 million new housing units across all cities by 2020.

FOB prices largely unchanged

The market for W. African timbers in Vietnam has grown and this market is now well established but mainly for a handful of „favoured‟ species. Sawnwood prices in the region are largely unchanged and producers appear satisfied with the current levels and there have been no serious attempts by producers to raise prices.

FOB prices for a few log contracts have moved up but these changes reflect only the normal adjustments not a shift in overall trend. The overall market outlook appears stable through into the fourth quarter with shippers in Cameroon reported as being the most active at present.

Generous incentives for investors in Republic of the Congo

There are positive developments in Congo Brazzaville where the government is very supportive of new investment in the forestry sector providing generous log export allowances for companies investing in processing capacity. On completion of the processing plants companies will be subject to log export quotas. Because of the number of new investors the availability of logs for export will improve. In the medium term the volumes of sawnwood and other processed products from Congo Brazzaville are expected to increase significantly.

Market outlook

Producers are confident of prospects in the final quarter of the year but there have been signals that competition is increasing in the Middle Eastern markets which have always been very price conscious.

Despite the suggestions from many analysts that demand for tropical timber in China may be slowing producers see no evidence of this at present and, as was anticipated, Indian importers have begun to look to African sources to fill the void left by the log export ban by Myanmar.

West and Central African exporters have not yet fully explored the opportunities in the Indian market where SE Asian producers have had success.

Log Export Prices

                                                                                                                                              Sawnwood Export Prices