Timber products export until this month fetched over $100 million more than 2014-15 fiscal year, Ministry of Commerce data shows.

In 2015-16 through March, state-owned businesses have exported forestry products worth $5 million and the private sector exported products worth $169 million.

Comparing with the same period of 2014-15, the state-owned enterprises’ export figure is $6 million lower, however, the private sector exports went up by $111 million.

The export of raw timber was banned by the government starting April 1, 2014 in a bid to stem illegal logging and save Myanmar’s dwindling forests. Myanmar Timber Enterprise now sells finished timber goods through a tender system.

The Ministry of Environment and Forestry had fixed the market price of Myanmar timber in cooperation with the Ministry of Commerce starting from the end of 2015.

However, Dr Sein Win, chairman of Myanmar Forest Products Business Owners Association, fixing the price has its downside. “Fixing market price is important in exporting to the international market and it also impacts the price of locally-produced furniture. However, the government should not just fix the price by guessing from the internet. They have to take market dynamics into consideration. If the price is much lower or higher than the actual market price, it could cause a problem.”

Currently the demand for locally-produced furniture is rising and the local furniture producers expect an increase in production as many condominiums and apartments are in the pipeline in major cities including Yangon in 2017-18, said U Nyan Win, chairman of Timber-based Furniture Business Owners Association.

Some of the furniture producers said the government should coordinate with private business owners in order to create new markets for timber products as stated in the National Export Strategy undertaken last year. They say the government should provide more factories with modern equipment to produce quality timber furniture.

On the other hand, private furniture makers still grapple with raw material, labour and land issues, and the government should take measures to tackle the issues, U Nyan Win said.

Forest products export has been a rare bright spot for Myanmar’s flagging exports, but key markets such as the EU are still served via Singapore. Exporters say Myanmar should sign the Voluntary Partnership Agreement with the EU as soon as possible by quickly finishing the ongoing negotiations.

A Voluntary Partnership Agreement (VPA) is a legally binding trade agreement between the European Union and a timber-producing country outside the EU. The purpose of a VPA is to ensure that timber and timber products exported to the EU come from legal sources. The agreements also help timber-exporting countries stop illegal logging by improving regulation and governance of the forest sector.

Source: Myanmar Business Today