Timber Trade Forums: Changing International Markets For Timber

Illegal logging and its related trade have emerged as burning issues in recent years, especially in Europe. In attempts to address these issues, legislation, as well as public and private sectors purchasing policies have been formulated or are being proposed to require legal and sustainable timber. Europe has been a major market for Malaysian timber and timber product exports for many decades. In 2005, Malaysia's exports of timber and timber products to the EU amounted to RM2.8 billion, representing 13% of ivlalaysia's global export. Currently, the UK, Denmark, The Netherlands, France and Belgium have put in place official public timber procurement policies which require minimum proof of legality. Other European countries like Germany are also in the process of drawing up their own official timber procurement policies.

MTC, together with the Dutch Timber Trade Association (WNH) and the UK Timber Trade Federation (TTF) have joined forces to implement a programme of market research and trade forums

to communicate changes in requirements for legal and sustainable timber. TTF, WNH and MTC are core partners in the European-funded Timber Trade Action Plan which is managed by the Tropical Forest Trust. This Euro 3.5 million programme provides financial assistance to companies in Malaysia wishing to get independently verified chain of custody for their wood products.

The trade forums organised by MTC, WNH and TTF were held in Kuala Lumpur (15 January 2007), Kuching, Sarawak (17 January) and Kota Kinabalu, Sabah (19 January). Themed "Changing International Markets for Timber: What Malaysian Producers Can Do", the objective of these trade forums was to facilitate the exchange of information and sharing of lessons between producers in Malaysia and buyers within the EU markets.

Speaking at the forum in Kuala Lumpur, MTC's Senior Director for Trade Promotion and Marketing, Mr. Cheah Kam Huan said at the private sector level, eight timber trade federations in

Europe including the UK, The Netherlands, Germany, Belgium and France have adopted Codes of Conduct with commitment to trading in legal timber as a minimum requirement and promoting sustainable forest management and certification. "On the EU level, the European Commission (EC) is actively pursuing the EU FLEGT Action Plan and a delegation from the EC was in Malaysia on 16-21 January 2007 to initiate formal negotiations with Malaysia on a Voluntary Partnership Agreement (VPA)," he added.

Several topics on the changes in international markets such as Europe and Japan, EU FLEGT VPAs, EU consumer markets, log tracking, verification and audit systems as well as the Malaysian forest sector were presented at the trade forum in Kuala Lumpur. Several case studies were also presented and discussed.

About 100 participants from Malaysia, Europe, Japan and other countries attended the trade forum in Kuala Lumpur. From the trade forum, the Malaysian participants have gained a better understanding on the changing market requirements of the European markets, in particular, the requirements for legal and sustainable timber. Participants from other countries, on the other hand, have a deeper appreciation of the present efforts and difficulties faced by the Malaysian timber industry in meeting the challenges of the environmental demands of the European markets.