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FLEGT market news

Indonesia: New regulation abolishes mandatory V-legal documents

The government of Indonesia announced a "simplification" of rules for exports that also concerns timber and timber products. According to a press communication released by the Ministry of Economy on 13 March 2020, V-Legal documents will no longer be required for timber product exports, once a new regulation (Regulation 15/2020) enters into force. They can, however, still be applied for and issued if the buyer or destination country demand such documents. The new rules, which were published as a part of a wider COVID-19 economic stimulus package, are scheduled to come to effect on 27 May 2020.
IMM is informed that consultations on this matter are ongoing within and between Indonesian ministries, and with some international partners. We will post updates here when new information is available/confirmed.

 

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Ghana industry launches FLEGT communication drive

The Ghanaian timber sector has unveiled a marketing initiative to communicate legality and sustainability assurance advances made under its FLEGT VPA to EU customers, preparatory to Ghana starting FLEGT licensing. The ‘Message House’ has been developed by the Kumasi Wood Cluster (KWC) and Ghana Timber Millers Association (GTMA) with support from government,  civil society and the UNFAO EU FLEGT Programme. Its aim, they say,  is to highlight the measures and reforms the country has undertaken to meet EU requirements in order to help business capitalise on market opportunities and ensure FLEGT licensing delivers commercially. 

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New company eco-label embraces FLEGT and certification 

Fort Builders Merchant, a new business just launched by former UK Timber Trade Federation President Keith Fryer, is applying its own ‘Fortified’ eco-label to FLEGT-licensed and FSC and PEFC-certified timber without differentiation. The aim is to simplify and cut the cost of legality and sustainability assurance.  IMM interviewed Mr Fryer on the company’s innovative move. 

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UK TTF Tropical Timber Forum: Sustainability and Sales

As the title Reducing risk, improving supply suggests, the UK Timber Trade Federation’s recent Tropical Timber Forum had a dual focus. Ensuring tropical timber legality and sustainability was recognised as core to success in the modern marketplace. But the emphasis was also on the interaction of this and the broader commercial viability of the sector and how it needs to adapt ensure availability and remain competitive. 

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Highway to hardwood market growth

If steel and concrete road fixtures and fittings, including lamp and signposts, crash and acoustic barriers were made of wood, and hardwood in particular, it would add up to major timber demand and major CO2 savings.  That’s the blueprint the Dutch Ministry of Logistics and Waterways has devised, following stakeholder discussions, among others, with  Netherlands timber sector market development organisation, Centrum Hout. It’s done the carbon calculations, called the concept the ‘circular bio-based highway’ and Steffen Meinhardt of Dutch importer Hupkes Houthandel presented on it at the 2019 International Hardwood Conference in Berlin.

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IMM analysis of Indonesian timber imports - growth primarily in pulp, fuel wood and paper

While still dwarfed by domestic production and exports, Indonesia’s imports of timber and timber products are rising in several product groups. Total Indonesian imports of timber and timber products increased 35% to 4.23 million tonnes between 2015 and 2018. In value terms, imports increased 16% to US$1.52 billion. Much of the growth in import quantity has been concentrated in wood (HS 44) products, with a particularly dramatic increase during 2017.

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IMM Annual Report highlights progress in overcoming market constraints to FLEGT-licensed timber

The first IMM EU trade survey in 2017 identified several administrative issues that may have had an impact on the market for FLEGT-licensed timber in the early stages after implementation. First and foremost, there were delays in clearance of shipments for circulation on the European markets due to FLEGT-license mismatches. Some companies also had difficulties adapting to the new administrative procedures involved in importing FLEGT-licensed timber and called for a fully electronic process to reduce administrative effort. Besides these administrative issues, lack of awareness of the Indonesian FLEGT VPA and what it means on the ground was frequently mentioned as undermining market development. 

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Increasing “level of exposure” to verification of EU trade flows

Assessing the current availability of third party verified products in the EU market is challenging since no system-wide data is regularly or systematically collected on the actual volume or value of trade in these products. The FSC and PEFC certification frameworks that might be expected to provide such data only publish information on the area of certified forest and the numbers of chain of custody certificates issued. 

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EU timber imports from Indonesia increase in value terms

The EU imported 423,000 metric tonnes (MT) of wood products from Indonesia in the year ending May 2019, a 1% reduction compared to 428,000 MT in the year ending May 2018. However, in value terms EU imports from Indonesia increased 9% from €782 million to €855 million in the same period. As the Euro weakened against the US currency during this period, the increase in dollar value was less significant, up 5% from US$932 million to US$976 million.  

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EU imports of tropical wood products gain momentum in 2019

After a dip in 2017 and the early months of 2018, EU imports of tropical wood products recovered ground in the second half of 2018 and gained momentum in the first five months of 2019. EU imports from Indonesia have increased in value terms but remain stubbornly flat in tonnage terms. There was significant recovery in EU imports of sawnwood from Cameroon in the year to May 2019. Most other gains during this period were in imports from countries not engaged in the VPA process, including Brazil, China, India, Panama, and Cuba.

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