Myanmar: Aftermath of the log export ban

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The export trade for Myanmar timbers became very quiet after the 31 March coming into force of the log export ban. A substantial volume of logs purchased for export was not shipped before the deadline and remains in Yangon depots but the Myanmar Timber Enterprise (MTE) has yet to determine the exact unshipped volume.

Observers say that companies with huge volumes of unshipped logs are considering a petition to the authorities. The MTE is saying it began advising exporters to clear logs quickly once it became clear in October 2012 that the ban would be implemented.

Analysts point out that factors such as the weak Indian rupee, high stocks and congested log-yards in India and tight financing hindered prompt shipments to India, the main market for Myanmar logs. It was only in October 2013 that export shipment started to rise, peaking in March 2014.

Export shipments of logs for the 2013-14 financial year were around 661,000 cubic metres of teak logs and 2,013,000 cubic metres of other hardwoods.

Analysts say around 50% of the years' teak logs and 46% of the total hardwood logs were shipped out in just the last quarter of the financial year (January to March).

As the regulations stand at present, unshipped logs will have to be processed locally after which products meeting the required level of processing could be exported. Analysts anticipate lower log prices in upcoming auctions because of the large volumes that will be for sale.

However, once the stock of unshipped logs are utilised prices will better reflect mill requirement s for the domestic and international market. Looking ahead, the plan by MTE's to reduce annual log harvests will likely firm up log prices.

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