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challenging,” said Mr Pfannkuch. “Even if you have species that meet the same specifications, it’s still difficult to persuade people to change.”
MIL is maintaining its range of species, but reluctantly in the current market CEB has reined back on secondary varieties. “Right now is not the time to diversify our range from Gabon,” said Mr Pfannkuch. “We’re not about to harvest a lesser-known species which later we just can’t sell.” Precious Woods attributes current market pressures in large part due to deceleration in construction, notably but not exclusively in Europe, following high levels of activity over the last couple of years, with the sector now hit by wider economic contraction. “The state of construction is a particular issue,” said Mr Pfannkuch. “We had the home improvement and DIY boom in the pandemic period, so that construction work is done, and at the same time building investment has been impacted by inflation and higher interest rates internationally. Consumers are even cutting back on holidays due the cost of living crisis, so they’re not about to invest in more construction. As a result of economic pressures, we’ve even seen large construction companies in China collapsing.” The prospect of the new EU Deforestation Regulation (EUDR) coming into force next year and setting new requirements for six forest risk commodities, including timber, is not making life easier. Unlike some, Precious Woods does not see the EUDR’s requirement for geolocation co-ordinates of timber origin as a particular issue for its operations. “We needed to have geo-referenced maps of harvest areas to get the legal permits to meet the requirements of the previous EU Timber Regulation,” explained Mr Pfannkuch.
The problem, however, is that the market still doesn’t know how it will relay required EUDR information to the authorities. “Our main concern is the EUDR IT system, which is still in development. Nobody seems to know how it will work, or what it will look like, plus the EU does not seem to be sure yet what questions it should be asking business,” said Mr Pfannkuch. “If the system and process are too complicated, we’ll need to recruit more staff. For instance, we currently provide up to 50 pages of documentation to customers with each consignment, but only 5-10 pages change with each order. The rest is the same from January to December. If every page is different under the EUDR, that obviously increases the workload.”
The harvest period information required by the EUDR, however, will also not be an issue. “We can say when a tree is harvested, but can’t attribute a piece of lumber that arrives in a bundle to a specific tree,” said Mr Pfannkuch. “However, we can relate the lumber inside a bundle to the specific harvesting periods.”
Another worry is that the EUDR may turn some buyers and specifiers against tropical timber, with it being seen as too high risk, perceived as involving a greater chance of breaching the rules and being fined. “There is the possibility the EUDR may lead to some people turning to substitutes,” said Mr Pfannkuch.
As for the effect of the additional listings of tropical timbers in CITES Appendix II, MIL has a year to adapt as a 24-month transition period was secured for South American species, including ipé and cumaru. Additionally, said Mr Pfannkuch, Brazilian authorities have a good track record of managing the studies and certificates required
under CITES. Gabon, however, had just three months to adapt to padouk’s and doussie’s listing. “We have a pre-CITES listing stock of padouk, for which we’re getting export permits one by one, but there’s lack of clarity on timber harvested after the CITES deadline,” said Mr Pfannkuch. “It’s complicated to get the necessary studies done and the change in Gabon’ government may hold up the process for a while.” Adding to the issues with CITES is the EU’s additional requirement for import permits for listed species under Council Regulation 338/97. This has categories A, B and C covering species listed under CITES Appendices I, II and III, with category D comprising species effectively on a watch list. “There’s an overall feeling that the approach is to limit trade in agricultural and forest products from the tropics and particularly a fear that the EU will make it less attractive to import tropical timber,” said Mr Pfannkuch.
Despite the obstacles, however, Precious
Wood has further development projects in the pipeline for 2024/25 and remains upbeat about the longer term, with the growth in global wood consumption leading to a resurgence in tropical trade.
“Some operators may disappear due to current market conditions, but people are saying there will be recovery in six to 12 months,” said Mr Pfannkuch. “So short term our sector may shrink, but then it will grow again. We can’t and shouldn’t put all the tropical forest in conservation. That would be way too expensive and hamper the development of entire countries. Moreover, the world needs more wood, so we will have to sustainably manage and use this resource in the tropics to protect its integrity.” ■
Above left:MIL Madeiras Preciosas manages 599,597ha of its own forest Above right:On the way to the mill in Gabon PHOTO: ATIBT
www.ttjonline.com | November/December 2023 | TTJ
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