Log trade policy under review

Log exports from Guyana may soon attract higher commissions, or even face an eventual ban, as forestry authorities are currently reviewing the National Log Export Policy with an eye out for all measures that would encourage locally advanced value-added timber activities.

Agriculture Minister Robert Persaud, who holds responsibility for forestry, said the Guyana Forestry Commission (GFC) is still consulting with all stakeholders, both locally and externally, to come up with a definitive position on adjustments to the policy.

He made it quite clear that the authorities are considering ‘all options’ with regard to log exports while the engagement and assessment continues.

Thus far, Persaud said, he is very pleased with success of the policy, since he believes that it has fuelled the emergence and growth of the value-added wood sector.

However, he observed that the value-added wood sector has only grown to an extent within its limited capacity. Hence, all efforts now focus on pushing this sector beyond where it now is, so there could be more opportunities for value-added forestry investments in Guyana.

There are currently several well-established Guyanese industries engaged in the manufacturing of various wood products for export to the United States of America, Europe and other markets.

Additionally, the minister highlighted that the policy, established in 2007, has been a trial initiative, with various stages of implementation over the period up until 2012. The first part of the policy, which took effect from January 2009, raised the export commission rate to seven per cent, 10 per cent from January 2010, and 12 per cent from January 2011 up to December 2011.

As such, the current consultations and review are to carefully analyse the impact of the strategy over the past four years, and chart the way forward for log exports in 2012 and beyond. Popular woods such as purpleheart, red cedar, greenheart, hububalli, silverballi, wallaba, mora and fukadi are among the main species that have attracted higher export commission rates with the policy in place.

The authorities designed the policy to reflect a differentiated regime for the export commission by log species, and to encourage the utilization of lesser-known wood species of logs in Guyana’s classes two and three. Forestry stakeholders, during consultations back in 2007, agreed that the GFC would implement the policy, assess it, and make adjustments when necessary; while, in 2012, there would be a complete revision. Considerations were also given back then to the possibility of banning the export of certain log species.

To date, a large number of tropical timber-producing countries around the world have implemented a ban or restriction on the export of logs. Those that have completely prohibited the trade include neighbouring Brazil, which has banned the export since 1969, Bolivia, Costa Rica and Cameroon. Other states such as Indian, Ghana, Venezuela, United States of America, Canada and Malaysia have either banned certain species and/or imposed restrictions on log exports.

In Guyana, the export of logs has been an issue of controversy for decades, with some sections of society and the forestry sector often decrying the trade and its impact on the country and its forests.

More recently, the issue came to fore when the state and forestry authorities were criticized for granting a State Forest Environmental Permit (SFEP) to an Indian firm, Vaitarna Holdings Private Inc. (VHPI).

The international media had reported that VHPI would be transporting cut logs on chartered ships from Georgetown, Guyana, to the Mangalore Port, and then carry them via road to the Coffee Day Group’s furniture plant in Chikmagalur. The reports also stated that Amazonian hardwood varieties coming to Indian shores through this route would include greenheart, purpleheart, wallaba and bulletwood. Guyanese authorities have since refuted such claims. Just last year, Guyana earned in excess of US$51 million from forest exports, reflecting a modest growth of 1.4 per cent with increased production of logs, lumber, sawnwood, and plywood.

However, while international prices still remain favourable for logs, Guyana has seen increases in the export of sawn wood and a variety of value-added wood products.

On the domestic market, wood prices have also seen a steady increase over the years. While the forestry authorities have attributed this to the huge demand for wood and wood products locally, a few forest producers have claimed that the reduction of allowable cut quotas on forestry concessions is responsible for a decline in production. A few months ago, the forestry authorities called in all concessionaires, wood producers, saw millers and others, urging them to increase production or face losing their wood cutting permits and timber concessions.