Central/West Africa: Greater price volatility amid sagging US and UK economies

Log prices have re-adjusted to their recent median levels. With the current strains on the US and European economies and the IMF’s low growth forecasts for UK and US, it is likely that prices for logs and lumber will become more volatile through 2008. Price movements, both upwards and downwards may tend to be larger for European buyers who are more nervous about making long-term purchase contracts and revert to a ‘just in time’ policy.

So far, demand for West African timbers has been at normal level though prices for a very few species have fluctuated in the past few weeks. Buyers in Europe contend that the market has now changed to be led by demand rather than supply, pointing to the oversupply situation in the softwood sector. Meanwhile, demand from China and India remains firm.

At this stage it is not clear how far the imminent recession in the US will impact tropical hardwood imports. If the crisis in the housing sector deepens, the major effect is expected to be on imports from major suppliers in South America, which may trigger pressure for suppliers in the region to move more aggressively into the European market. China is a major supplier of furniture and other wood products into the US and any reduction in demand for China’s products could also cause lower demand for African and other timbers.

While the outlook for the African timber market is much more unpredictable, its current status is relatively stable. West African exporters are possibly less optimistic about market prospects than they were at the start of the year and the high euro is yet another factor affecting this sentiment.

*West Africa logs, FOB*	*€ per m3*
Asian market	LM	B	BC/C
Acajou/ Khaya/N'Gollon	221	191↑	175
Ayous/Obéché/Wawa	221	205	168
Azobe & Ekki	168↑	168↑	122↑
Belli	198	198	-
Bibolo/Dibétou	168	168↑	114
Bubinga	533	457	381
Iroko	289	274	259
Okoume (60% CI, 40% CE, 20% CS)	-	150	-
Moabi	335	335	282
Movingui	205	190	152
Niove	129	129	-
Okan	251↑	251↑	198↑
Padouk	289	289	267
Sapele	297	297	282
Sipo/Utile	335	305	267
Tali	190	190	152
Gabon Okoumé logs, FAS*	€ per m3
Grade	Asia	Europe
QS	213	219
CI	171	171
CE	146	150
CS	108	111

*Based on SNBG official prices

West Africa sawnwood, FOB		€ per m3
Ayous	FAS GMS	396
Ayous	Fixed sizes	427
Okoumé	FAS GMS	325↓
	Sel. & Bet. GMS Italy	310
	Sel. & Bet. fixed sizes	-
Sipo	FAS GMS	630
	FAS fixed sizes	-
	FAS scantlings	645
Padouk	FAS GMS	600↑
	FAS scantlings	630↑
	Strips	425
Sapele	FAS Spanish sizes	620
Sapele	FAS scantlings	635
Iroko	FAS GMS	458
	Scantlings	519
	Strips	304
Khaya	FAS GMS	396
Khaya	FAS fixed	427
Maobi	FAS GMS	610
Maobi	Scantlings	630
Movingui	FAS GMS	460

Central/West Africa: Greater price volatility amid sagging US and UK economies

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