The Myanmar Timber Enterprise (MTE) has announced
that the current list price, which has been in effect since
August 2008, will apply until 31 March 2009. The
announcement, made on 10 November 2008, also suggests
that the MTE may adjust the allowable felling and supply
to ease buyers’ current problems. Buyers are expecting to
see some quantity adjustments in the coming tenders.
Major importers, particularly India, China, Thailand and
Pakistan, have been facing difficulties with supply and
prices. It is expected that buyers and sellers will have to
make some concessions to address the current market
situation.
Reports from Myanmar indicate that the current economic
crisis has been causing some uncertainty among timber
dealers. India, which is a major consumer of teak, was said
to have fallen behind in purchases and shipments. Indian
buyers noted exchange rate problems and credit facilities
as some of the factors the factors affecting their purchases
and shipments. As it has been reported, the negative economic effects of the credit crunch are being felt in
India as well.
The tender prices fell during the past few months.
Earnings from tender sales are less than 16% of MTE’s
total annual exports. More than 80% of revenue for MTE
has been from direct sales (with fixed prices) during the
past three years.
Some analysts feel that selling higher quantities of teak to
meet annual revenue targets could backfire on both buyers
and sellers. Prior to the price freeze, some dealers had
argued that a sharp reduction in prices could have affected
buyers with heavy stock. Similar recommendations were
made in the past and often proved wrong, as teak from
natural forests is only a negligible fraction of the world’s
timber trade. As such, demand always seems to be good.
Analysts were usually not able to consider all the variables
involved in predicting the effect of lowering prices on
demand.
November is the end of the felling season and the start of
the trucking season in Myanmar. Timber has started to
come down to Yangon depots in trucks and barges. As a
result, analysts suggest it is not practical to reduce supply
at this point in time, in order to recoup expenses.
Myanmar
Myanmar Log Prices (natural forests)
| Teak Logs, FOB |
€ Avg per Hoppus Ton
(traded volume)
|
| Veneer Quality |
Sep
|
Oct
|
| 2nd Quality |
5,458
(6 tons)
|
5,468
(6 tons)
|
| 3rd Quality |
4,587
(9 tons)
|
4,442
(14 tons)
|
| 4th Quality |
3,428
(44 tons)
|
3,494
(41 tons)
|
| Sawing Quality |
Sep
|
Oct
|
| Grade 1 (SG-1) |
2,574
(191 tons)
|
2,456
(152 tons)
|
| Grade 2 (SG-2) |
1,950
(531 tons)
|
1,800
(478 tons)
|
| Grade 3 (SG-3) |
1,671
(31 tons)
|
-
|
| Grade 4 (SG-4) |
1,817
(487 tons)
|
1,621
(330 tons)
|
| Grade 5 (SG-5) Assorted |
1,651
(661 tons)
|
1,644
(469 tons)
|
| Grade 6 (SG-6) Domestic |
1,273
(365 tons)
|
1,233
(331 tons)
|
| Grade 7 (ER-1) |
1,108
(190 tons)
|
1,069
(220 tons)
|
| Grade 8 (ER-2) |
-
|
- |
Hoppus ton=1.8m³; All grades, except
SG-3/5/6, are length 8' x girth 5' &up. SG-3/4/6
are girth 4' &up. SG-3 grade is higher than SG-4 but with lower
girth and price.
| Logs, FOB |
€ Avg per Hoppus Ton (traded volume) |
Pyinkado (export)
|
431 (210 tons)
|
| Gurjan (keruing-exp) |
238 (70 tons) |
| Tamalan |
--
|
| Taungthayet |
-- |
|
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