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PAPUA NEW GUINEA RAINFOREST CAMPAIGN NEWS

Timber Industry Demise? Loggers Hit Hard by Asian Crisis

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Forest Networking a Project of Ecological Enterprises

http://forests.org/

2/17/98

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RELAYED TEXT STARTS HERE:

Title: Loggers hit by low prices, Asian crisis

Source: The National

Status: Copyrighted, contact source to reprint

Date: February 19, 1998

Byline: Daniel Korimbao

PORT MORESBY: Falling log export prices and the depressed market

situation in Asia were compounding the woes of the forest industry in

the country, the National Forest Board said yesterday.

And the freefall the kina was experiencing against the US dollar,

together with the recent collapse of neighboring Asian economies were

not helping the situation, the board's deputy chairman Gabriel Samol

said.

Mr Samol said in a statement the board was concerned at the downturn

in the forest product export market and the general economy of the

country, and attributed the situation to the crash of the Asian

economies which were the major buyers of PNG logs.

"The log export prices have dropped markedly in the last quarter of

1997 from an average of US$124 (K225) per metre to US$60 per cubic

metre this month," he said.

"The industry woes are further compounded by the devaluation of the

kina against the US dollar, high levels of kina-based export tax, and

increased operational costs.

Mr Samol revealed that as of January 1998, 26 (or 36 per cent) of the

72 approved timber projects were not operating, 29 (or 40 per cent)

had scaled down operation, while only 17 (or 24 per cent) were

maintaining normal operations.

He said the current uncommitted stock was between 200,000 and 300,000

cubic metres of logs, and urged the timber industry to do all it could

to sell these logs before they deteriorated and further lost their

value.

Mr Samol said the board further attributed the downturn to the

consumers shifting from tropical hardwoods to plantation grown

temperate softwoods and other substitutes, and warned this may have

long term implications for the industry.

Landowner benefits such as royalty payments, infrastructure

development, and employment were being adversely affected by the

market situation.

He said the board has commissioned studies to be completed next month

from which policies aimed at addressing the future of the industry

could be derived, and called on concerned parties including the

Government and the World Bank to help find ways to prevent the demise

of the timber industry.

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