RISI

Can log exports bans be effective?

By Bob Flynn Sat, Nov 03, 2012
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SEATTLE, WA, Nov. 4, 2012 (RISI) -Gabon has been the leading supplier of tropical hardwood logs from Africa to China since the mid-1990s, including the high quality Okoumé (Aucoumea klaineana) that has been very important for China's plywood industry. However, since May 15, 2010, log exports from Gabon have been prohibited, a move which has increased exports of Gabon's value-added forest products but at the same time has shifted the log trade to other African countries. Other countries have had mixed results in trying promote domestic wood processing by restricting or prohibiting exports of unprocessed logs, but Gabon appears to be off to a reasonably good start.

Imports of Okoumé logs from Africa, principally Gabon, have been widely used in China for face and back veneers in plywood production. Chinese plywood exports during the first nine months of 2012 were nearly US$3.6 billion, a 40% increase over the same period in 2010, and more than 300% higher than the first nine months of 2004. The USA was by far the major market for Chinese plywood exports in 2012, at $738 million, or nearly 21% of total exports. Shipments to the USA in 2012 so far are 19% higher than in 2011. By comparison, the second largest market for Chinese plywood exports in 2012 has been Japan, at $265 million in the January-September period.1

For most of the past decade, China has imported between 1.5 million m3and 2.0 million m3of tropical hardwood logs from Africa during the first nine months of each year.2Gabon accounted for an average of 45% of these imports, increasing to 55% in 2009. When Gabon implemented its log export ban, Chinese imports from this source plunged, and accounted for only 1% of African log imports in the January-September period in 2011 and 2012. However, total Chinese imports of African logs have not fallen at all since this ban was implemented, as importers have successfully been able to shift buying to other African countries. The Republic of Congo has taken over as the largest supplier of African logs to China, with shipments in the first nine months of 2012 up more than 61% compared with 2010, to 520,000 m3. Cameroon has maintained its volumes to China (320,000 m3in the same period), while Mozambique and Equatorial Guinea (both with shipments of about 250,000 m3) have increased exports to China by 69% and 54%, respectively, compared with the first nine months of 2010. But China has also worked hard to develop other alternatives to Gabon, with imports from Benin (160,000 m3) up 246% since 2010, and imports from Ghana and Gambia (both around 100,000 m3) up by 708% and 654%, respectively, compared with two years ago.

Over the years, various African countries have announced bans on log exports, in order to promote domestic processing. Frequently, however, there has been significant "leakage" around these bans, and in some cases they have simply been repealed because there are strong financial incentives to maintain the log trade. In the case of Gabon, the ban on exports of unprocessed logs has apparently been quite effective. Log shipments to China from Gabon have reduced to an extremely low level. China remains the largest market for timber exports from Gabon, and while the total is still significantly lower than prior to the log export ban, the trend in shipments of processed products has been positive.

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