Central/West Africa: Demand for high-end species lifts prices

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ITTO
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In contrast to the rather unexceptional demand over the past month producers now report that market conditions have changed. On the one hand, stronger demand for highend species for which availability is limited has lifted prices, conversely there is a downward pressure on prices for other, mainly lower end species, driven by tough competition in the market.

Demand for specialty timbers such as ovangkol has grown and prices have increased to around euro 100 per cubic metre. Prices for douka/makore have also risen in recent weeks jumping around euro 30 per cubic metre. For the mid-priced species there has been no change as yet. For the species such as okoume and okan that have fallen out of favor, mainly because of over stocking in importing countries, buyers are negotiating hard and driving down price levels.

The apparent overstocking of okoume in China has been reported earlier but now it appears as if stocks held by millers have also increased and this is aggravating an already difficult trading environment.

Motive behind interest in mixed species

A noticeable and developing trend is that some buyers, particularly those in Middle East markets, are beginning to consider lower grades and mixed species instead of individual species and more stringent grade standards. Analysts suggest it seems buyers want to drive average prices down by agreeing to accept a mixture of species.

This trend has become most obvious for the redwoods where Malaysia has a strong market position in the Middle east markets. The interest in a wider range of timbers is a welcome development for producers as they can harvest a greater range of species.

First quarter exports improve slightly

Producers report that demand in European markets is steady but unexciting with buyers already looking ahead to quieter business during the traditional summer vacations period that now begin earlier and earlier, in some countries as early as the end June.

Despite the subdued demand in the EU, compared to export levels prior to the financial crisis West African exporters of sawnwood have scored some successes.

Compared to export volumes in the first quarter of 2014 millers in Cameroon, Côte d'Ivoire, Republic of the Congo and the Democratic Republic of the Congo, DR have seen exports rise in the first quarter of 2015. It is only Ghana that has not enjoyed this growth.

Log Export Prices

West Africa logs, FOB € per m³
Asian market
LM
B
BC/C
Acajou/ Khaya/N'Gollon
230
230
160
Ayous/Obéché/Wawa
260
260
180
Azobe & Ekki
230
230
160
Belli
300
280
-
Bibolo/Dibétou
150
145
 
Iroko 330
290
260
Okoume (60% CI, 40% CE, 20% CS) (China only) 240
240
160
Moabi 335 305 225
Movingui 210
210
160
Niove
160
160
-
Okan
250
250
-
Padouk
310
285
225
Sapele 320 320 240
Sipo/Utile
345
340
265
Tali 320 320
-

                                                                                                                                               

Sawnwood Export Prices

West Africa sawnwood, FOB
€ per m³
Ayous FAS GMS 400
Bilinga FAS GMS 500
Okoumé FAS GMS
370
Merchantable 225
Std/Btr GMS 300
Sipo FAS GMS
610
FAS fixed sizes 610
FAS scantlings 660
Padouk FAS GMS 900▲
FAS scantlings 980
Strips 500
Sapele FAS Spanish sizes 600
FAS scantlings 600
Iroko FAS GMS 615
Scantlings 680
Strips
440
Khaya FAS GMS
450
FAS fixed
470
Maobi FAS GMS
610
Scantlings
615
Movingui FAS GMS
420
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