LET THE CHINESE LOGGERS ENTER THE DOMESTIC MARKET FOR HARDWOOD

Aug 12, 2014 Features / Columnists, Peeping Tom

A few weeks ago a visitor asked me, “With all those forests that you have in Guyana hardwood must be very cheap.”
I asked him to repeat the question, and when he did, my answer was a loud “No!”
The price of hardwood in Guyana is far from cheap. In fact, despite increased forestry activity by local foresters, the price of the most durable hardwood, greenheart, remains prohibitively high.
Right now, the cost of greenheart is around $350 per BM. Do not expect, however, first grade green heart at that price. If you are lucky you will obtain second quality.
Georgetown used to be a wooden city. The use of local woods helped to keep the buildings cool. And in the old days, the wooden houses lasted very long before they needed repairs.
This was because the sawmills did a good job in drying the lumber before they sold it. And the carpenters also applied their own treatment which led to the wood taking a long time before it went bad.
You could, back in the old days, build a greenheart house and thirty years after that house would still be standing tall, without any significant repairs.
You cannot take that chance these days with wood. The hardwood is not always properly kiln-dried, and those that are cost a premium price. In fact the price of hardwood is so prohibitive and the lifespan of the lumber is now shortened.
This is one of the reasons why so many persons are switching to concrete structures. They are running away from the high construction and maintenance costs associated with wood.
So Guyana has a great deal of forest resources, yet most people can no longer afford to build their homes with wood which is so much more beautiful and cool than a concrete home.
We have a great many foreign investors that are coming to Guyana and exporting both lumber and logs. But many of these foreign investors were in the past and may be still today prohibited from entering the domestic market, small and unattractive as it may be to large forest companies.
Barama, for example, had a specific clause that required it to not try to enter the domestic market for plywood without first negotiating an agreement on costs with the government. This clause was no doubt inspired by the heavy lobby of local forest producers who were afraid of losing out on the domestic market given their small and higher cost of production when compared with foreign companies engaged in large scale logging.
The consumers in Guyana need cheaper lumber. It is a great burden for a poor man to build small one-bedroom wooden structure. The cost of the wood is high. This places a great deal of pressure on the small man and forces him to ask how it is that Guyana has no much wood and it costs so much for a piece of wood to make a cricket bat.
The government should establish a team to examine the cost of local building materials, especially the cost of lumber to determine why it costs so much money, as much as US$2 per BM for greenheart.
Extractive costs are high. But should it be that high as to cost so much for a resource that is found in Guyana? Cheddi was deeply concerned about the cost of building materials, because he understood how this could impact on his own drive for low cost housing.
Today, instead of offering grants for low income families, the government is granting discounts to homeowners who buy their supplies from certain dealers. This in effect amounts to a transfer to the hardware dealers and benefits the hardware dealers more than the low income owners.
What is needed is for more persons to be encouraged to use local supplies when building. But they can only do so if the cost is reduced and it is for the government to undertake a study to determine whether lumber is overpriced in Guyana.
Secondly, experience has shown that the best way to bring down prices is to encourage competition in the sale of building materials. One way of doing this is to insist that those Chinese loggers who are exporting logs out of Guyana be required to satisfy at the most, 50% of the domestic market. They should be capped at 50%, so as not to totally put domestic forest producers out of business. A 50% cap would be enough to stimulate competition and protect local forestry operators.
If the Chinese are allowed a regulated entry into the domestic market for lumber, they should be able to bring down the prices for hardwood, because while a great deal of emphasis at the moment is on exports, there are plans in stream for wood processing plants to be established as part of the investment deals with these Chinese companies.

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LET THE CHINESE LOGGERS ENTER THE DOMESTIC MARKET FOR HARDWOOD

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LET THE CHINESE LOGGERS ENTER THE DOMESTIC MARKET FOR HARDWOOD

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