Guyana’s iconic timber species over-harvested, under-priced

Guyana’s iconic timber species  over-harvested, under-priced

The author of the Peeping Tom column in Kaieteur News on Sunday 26 April 2015 (‘The Chinese are not the problem&rsquo complained about the high domestic price of greenheart sawnwood, which he/she thought was the cause of the shift from traditional wooden to concrete houses in the coastland. The author attributed the price of US$638/m3 (G$300 per Board Measure, 1/12th of a cubic foot) to the inefficiency of the family-sized Guyanese-owned timber processors and their inability to form consortia to compete with modern companies exemplified by the tax-assisted Chinese transnational loggers.

US$636/m3 as a domestic price is the same as the lowest grade of rough-sawn export lumber (‘merchantable&rsquo declared by the Guyana Forestry Commission to the fortnightly Tropical Timber Market report of the International Tropical Timber Organization for the last fortnight of March 2015, while the premium grade of rough-sawn export lumber (‘prime&rsquo was selling for twice the price – US$ 1236/m3. These figures conform to economic theory; the best grades and highest price go to the market which can transform the lumber most profitably into even more valuable products such as furniture, with a multiplier factor of 14 or more compared with the price of the unprocessed log.

There seem to be three questions:

Q1 – can we continue to supply to the export market our excellent sawn timber properly priced and appropriately taxed?

 Q2 – if we continue to send our best timber overseas for value-added processing, how do we satisfy the local market?

Q3 – instead of having our timber improved in value by overseas processing, could we add value domestically and sell more processed products in the export market?

In this letter, I address Q1 – continuity of supply. Our approved National Forest Policy (1997) and National Forest Plan (2001), both revised in 2011 but not approved by the National Assembly, and the GFC Code of Practice on Timber Harvesting (1996/2002/2014), promote and require a sustained supply of forest products. Sufficient seed-bearing trees of each commercially desirable species should be retained in all logged forests to ensure the survival of those species in those same areas.

In contrast, it has been evident for years that the Guyana Forestry Commission’s casual approach to the required conservation of individual species among our 1000+ tree species has been allowing massive over-harvesting of the commercially-preferred timbers. The following table shows that there is still a tremendous concentration for the export market on a very limited number of tree species. Unlike the practice in Suriname, the GFC only provides aggregate (total) volumes of log and lumber production and exports; it does not disclose any information by species or concession. In consequence we only have the information disclosed to the ‘annual review and assessment of the world timber situation’ produced by the International Tropical Timber Organization (ITTO) although that review is always some years out of date.

 Log exports reported by GFC to ITTO, 2000 –2011 20150430Bulkan5

For the years 2012-2014, the GFC’s Forest Sector Information Report (FSIR) confirms this concentration. In 2012, the top three species for log production were greenheart, wamara and purpleheart and the top ten species accounted for 76 per cent of total log production (page 30). In 2013, the top class 1 timber was wamara (page 26), with no information about greenheart or purpleheart. In the last published FSIR, for January-June 2014, wamara and greenheart were the top two timbers and purpleheart was fifth in log production (page 23).

The figure in the table show two marked trends: firstly, the trend of forest degradation is evident in the rise and fall in exports of commercially desirable timbers. Guyana’s iconic species – greenheart, purpleheart and more recently, wamara (and itikiboroballi) – are overharvested, and are extinct or approaching commercial extinction in accessible forests. The ratio of their log volumes to total log volumes far exceeds the ratio of the volumes of the standing trees in the forest to total forest volume.

Secondly, these four species together comprised more than 50 per cent of total log exports in all but one year (2004), and more than two-thirds of all log exports between 2007 and 2010.

The remarkably large difference between the declared FOB prices for logs exported from Guyana compared with the declared CIF prices for the same or similar timbers landed in China and India is conventionally a signal of transfer pricing. This practice involves incorrect Customs declarations.   In addition, taxes for our excellent timbers are notably much less than for equivalent timbers in Malaysia.   So the answers to Q1 are that harvesting is excessive and unsustainable, pricing is wrong and taxes are too low.

Corroboration about Customs fraud is in the report on ‘Illicit financial flows from developing countries: 2003-2012’ from the Washington-based Global Financial Integrity (December 2014). These flows are estimated for Guyana at US$84 million in 2003 rising almost continuously to US$440 million in 2012. Around half of the illicit flows (US$ 1464 million for 2003-2012) are attributed to export under-invoicing.

The Asian log exporters will continue to cream Guyana’s fragile forests of commercially desirable species until the last tree is harvested. They are supported in their quest by the explicit statements of the President (KN, 28 August 2014, ‘President Ramotar condemns “attacks” on Chinese investment&rsquo, the Minister of Natural Resources and the Environment (SN, 6 September 2014, ‘Natural Resources Minister blames energy cost for lack of value-added forestry&rsquo and the GFC (Guyana Forestry Commission’s Fact Sheet on Forest Management – debunking misrepresentation. Part 2. 16 August 2014; accessed on Ministry of Natural Resources and the Environment’s website on 17 September 2014).

I will address questions 2 and 3 in subsequent articles.

 Yours faithfully,

Janette Bulkan

Original Post

Seems like these species of lumber Greenheart, Purple heart, Wamara, will eventually become extinct at the rate that it is being exported by the Chinese.

 

Building a house in Guyana, most people will agree that finding choiced lumber in the Guyana Sawmills are very scarce and when found can be very expensive, and in some cases non existent like for example the species Wamara.....class by itself for beauty, a specie similar to Purple Heart but a harder and heavier material, mostly used for floors and ceilings, sometime walls,

Exotic, pricey wood species being shipped out of Guyana

August 17, 2014 | By | Filed Under News 
 

As the controversy surrounding Bai Shan Lin’s operations in Guyana

 

continues, the main question is why the company is exporting large quantities of exotic woods such as “Locust and Wamara”. Conservationists have been arguing that countries where these “exotic” woods are found should not export large quantities since they are considered an “invasive species”. Invasive species, also called invasive exotics or simply exotics, is a nomenclature term and categorization phrase used for flora and fauna, and for specific restoration-preservation processes in native habitats, with several definitions. Sometimes called Guyana Rosewood for its lustrous, dense, and colour, Wamara technically isn’t true rosewood (Dalbergia genus), but is in what could arguably be viewed as one of the most under-appreciated genera of tropical hardwoods: Swartzia. This genus is filled with a variety of colorful and striped woods, most of which remain obscure. It is considered an “exotic wood” in many parts of the world. The Locust tree is native to the southeastern United States, but has been widely planted and naturalized elsewhere in temperate North America, Europe, Southern Africa and Asia and is considered an invasive species in some areas. Pricing for the species… Bai Shan Lin on July 2009, last, exported 558 pieces of Locust Sawn Timber from Guyana. In October 2009, the company also exported Wamara Sawn Timber. A total of 5303 pieces were sent out in two PAGE 15containers. World Market demand for these two species of wood could fetch a heavy price.  The “Wamara” which is being sold by the cubic meter can fetch a price of between US$200 and US$600. Kaieteur News was told that the “Wamara” logs can be sold from between US$260 and US$290. Depending on the demand, the prices can triple, making it one of the best selling timber products being exported. It is believed that Bai Shan Lin and other logging companies have not been declaring “Wamara and Locust” when exporting. Rather they have been passing this off as mixed hard woods. Several sources within the Ministry of Natural Resources have said that the Wamara business is among the most lucrative business ventures that Bai Shan Lin is currently involved in. This newspaper was also told that low level ministry workers along with forestry officials who are tasked with monitoring the export of timber are not able to complete their task. It is being reported that since Bai Shan Lin along with several others entered into joint ventures, it has been “almost impossible” to keep a tab on how much timber is being exported from Guyana. Bai Shan Lin, a Chinese logging company, has big plans for Guyana: forest concessions covering 960,000 hectares; a 20-kilometre river gold mining concession; a 500-hectare Guyana-China Timber Industry Economic and Trading Cooperation Park and a 160-hectare real estate development. Despite the scale of the planned operations, Bai Shan Lin’s agreements with the government of PAGE 16 AND 57

Guyana are not public and there has been no discussion in the National Assembly about the company’s plans. In Guyana, it is illegal for a logging company to take over another logging company’s operation, unless officially authorised by the President. Yet Bai Shan Lin has managed to enter into large scale joint ventures with a number of locals.

Iconic timber species overharvested, near commercial extinction

- Bulkan

Guyana’s greenheart, purpleheart and more recently, wamara and itikiboroballi species are overharvested and are extinct or approaching commercial extinction in accessible forests, according to forestry expert Janette Bulkan, despite denials by the Guyana Forestry Commission (GFC).

“The ratio of their log volumes to total log volumes far exceeds the ratio of the volumes of the standing trees in the forest to total forest volume,” Bulkan wrote in a recent letter to Stabroek News. Bulkan said that it has been evident for years that the GFC’s casual approach to the required conservation.

Originally Posted by Jay Bharrat:

Wood too expensive on the local market and you can't get greenheart at most lumber yards.

 

Even the cheap form board is expensive.

I hear you Jay, why most people is resorting to concrete structures, but then again the local species of lumber is required for walls (now people are forced to use Sheet Rock) need species for roofing (Greenheart) and even for flooring.

Wood should just me one of the mixes in property construction.  It's also not bad to export exotic high-priced species which will be used in luxury villas and import lower priced pressure treated, water proof, rot-resistant building lumber from the US.

Forester slams sustainable forest  management claims

“It is contrary to all national policies for timber logs to be exported instead of processed in Guyana, yet the GFC appears to be happy to allow tens of thousands of cubic metres to leave Guyana each year at sub-normal declared prices even while there are claims of local lumber shortages,” said Palmer in a letter to this newspaper which was published on Sunday.

Concerns have been raised recently about the exports of high volumes of unprocessed logs and Palmer has expressed concern at incomplete forestry data put out by the GFC but noted that Guyana has committed to improvements including transparency of operations and reporting under its MoU with Norway, and has also applied for a voluntary partnership agreement (VPA) with the European Union under the EU’s Forest Law Enforcement, Governance and Trade action plan. “Integral to a VPA is independent forest monitoring which implies also greater transparency and an end to government censorship of information,” he observed.

Focusing on purpleheart and citing several studies, Palmer said that clearly there has been a rise in selective over-cutting of purpleheart at least from 1996. He noted that there was concern even in 2002 “The question is, however, can Guyana’s forest sustain this level of extraction in the near future.

This practice [the focus on timbers in the special (highest) class for royalty – greenheart, purpleheart, red cedar, brown silverballi, letterwood, bulletwood] can pose a threat to the Guyana’s forest,” he quoted from the GFC’s ‘Forestry in Guyana – Market Report for 2001.’ But no precautionary action was taken, Palmer said.

The selectivity of focus on purpleheart is even more striking in relation to the log exports, Palmer said. He pointed out that purpleheart volume as a percentage of total log and chainsawn production rose from 2 in 1996 to 8 in 2006, the last year for which specific data was published.  Purpleheart volume as a percentage of total log export volumes rose from 8 in 1999 to 33 in 2010 and for the period January to September last year, stood at 20%.

Citing several reports, Palmer said that purpleheart is widespread but not common.  “It is one of the species which grows in clumps or ‘reefs’, so the ‘average’ tree stocking is actually misleading.  Purpleheart reefs contain more trees than the average stocking but then there are wide areas with no purpleheart until the next reef.

Thus purpleheart needs special protection against over-harvesting, provided by a rule to not fell trees within 10 m of each other, according to the GFC Code of Practice for Timber Harvesting (2002).  This 10 m rule is based on abundant research on tree gaps by the Tropenbos Guyana Programme,” he wrote.

However, he noted that the GFA Consulting Group scoping study on independent forest monitoring noted in December 2011 that the GFC had relaxed informally this critical distance to 8 m, thus allowing more trees to be cut in a reef.  “The GFC cited higher-level ‘policy direction’ although there is no published research to justify this relaxation.

The then junior Minister for Forestry at the time of the GFA study in October 2011 made no public explanation for the ‘policy direction’ to ignore the Tropenbos research,” he noted.

“Given that purpleheart is a commercially desirable timber but a not-common tree, a citizen (and thus a stakeholder in the national forest estate) might reasonably expect conservative management by the GFC,” he said but noted that this has not happened.

.

Originally Posted by baseman:

Wood should just me one of the mixes in property construction.  It's also not bad to export exotic high-priced species which will be used in luxury villas and import lower priced pressure treated, water proof, rot-resistant building lumber from the US.

Agree with you on your first sentence Bro, but we do have a case where years after years, Guyana's exotic species such as Wamara, Purple heart, and a few others, has been exported to the detriment of extinction. The building Lumber that is being imported Guyana is Pine/Oak which is inferior to our Green heart, using US imported Lumber has so many disadvantages, for example there is the concern of Wood Ants, which would make meals of Pine/Oak lumber despite being insect treated.

Originally Posted by asj:
Originally Posted by baseman:

Wood should just me one of the mixes in property construction.  It's also not bad to export exotic high-priced species which will be used in luxury villas and import lower priced pressure treated, water proof, rot-resistant building lumber from the US.

Agree with you on your first sentence Bro, but we do have a case where years after years, Guyana's exotic species such as Wamara, Purple heart, and a few others, has been exported to the detriment of extinction. The building Lumber that is being imported Guyana is Pine/Oak which is inferior to our Green heart, using US imported Lumber has so many disadvantages, for example there is the concern of Wood Ants, which would make meals of Pine/Oak lumber despite being insect treated.

Now, I speak totally in the context of "sustainable" harvesting.

 

FYI, I know people doing well importing pressure treated and water proof (Marine) lumber and plywood.  It's not the answer to everything, but a consideration, part of the mix.

Wamara logs export as an example of Customs fraud

June 20, 2015 | By | Filed Under Letters 
 

DEAR EDITOR,

The price range for exported wamara logs was reported as being between US$200 and $220 per cubic metre during January to March 2015 (FPDMC Market Export Report, April 2015, page 10). However the CIF import price for wamara logs into China was US$760 per cubic metre, as reported in the latest edition (19 (11) 1-15 June 2015) of the Tropical Timber Market Report of the International Tropical Timber Organization (ITTO). This difference of US$500 per cubic metre provides an indication of the scale of Customs fraud, which was estimated for Guyana at US$84 million in 2003, rising almost continuously to US$440 million in 2012. Around half of the illicit flows (US$1,464 million for 2003-2012) were attributed to export under-invoicing (Global Financial Integrity 2014). The transfer pricing in wamara log exports is a very good example of why forensic audits in the natural resources sector are urgently needed. Incidentally Guyana is also exporting fire ants to China, according to the same ITTO report: “Fire ants found at Fujian port – Recently fire ants were found in Pau rosa [wamara] logs from Guyana for the first time by the Fujian Entry-exit Inspection and Quarantine Bureau. The batch of Pau rosa logs was sealed after fumigation treatment to prevent ant infestation. The fire ants are found in tropical and subtropical areas of South America. They can be a serious problem for livestock. It has also been found that fire ants can damage power supply systems by biting cables.” The Ministry of Agriculture provides a phytosanitary inspection and fumigation service, and exporters should be showing the phytosanitary certificate when they apply to the Guyana Forestry Commission for an export certificate. So how would it be possible for log exporter BaiShanLin to be exporting infested logs? Surely it could not be because they have bypassed the phytosanitary service and the GFC and the GRA inspections prior to the sealing of the shipping container? Did not Minister Robert Persaud promise 100 per cent verification of all exports? (‘Forestry transfer pricing probe on –Commissioner Singh – Barama, Jialing to come under closer scrutiny’, Stabroek News 09 December 2006). Janette Bulkan

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