Pine importation last year exceeded production of local lumber - GFC

Pine importation last year exceeded production of local lumber – GFC

Mar 01, 2018 News

Pine wood importation last year was so big that volumes eclipsed that of locally produced lumber, GFC said.

There are indications that pine wood imports last year outstripped the production of local lumber, an alarming situation.
According to a recently released report of the Guyana Forestry Commission (GFC), the imports of pine wood were over 60,000 cubic metres annually.
The effects of pine wood were felt especially last year.
“For 2017 imported pine will exceed primary production of local lumber which is approximately 40,000 cubic metres. This has placed local producers at a disadvantage and is even pushing operators out of business. Notwithstanding the issue of quality of local lumber, the imported pine selling price and other factors such as reliable domestic supply was disadvantageous to local operators,” the GFC report released to the media said.
Following complaints by local lumber yards and other forestry stakeholders about unfair competition, Government announced a number of measures from this year.
Pine wood was especially popular in the construction of the interior of homes and buildings.
GFC has been insisting that there are better woods available in Guyana, but there are accusations that lumber yards and sawmills are failing to offer the quality of dressed wood at a good price, as compared to pine.
A number of importers have complained that consumers locally are not getting what they want from local sawmills and lumberyards.
The restrictions of pine imports were designed to streamline trade into Guyana and also allow more effective monitoring of pine lumber.
Another reason advanced by GFC for the restrictions was that under Guyana’s commitment to the European Union’s Voluntary Partnership Agreement (VPA), all forest produce, whether local or imported, must show evidence of a system of chain of custody and legality.
“The import licence will address this issue as well as assist to address the issue of competition with local forest produce.”
It was explained by GFC that following strong representation at a recent meeting of the Council for Trade and Economic Development (COTED), an organ of CARICOM, Guyana’s request for suspension to increase the Common External Tariff (CET) on pine wood and pine wood products, from five percent to 40 percent, was approved.
The new tariff will be in effect from January 1, 2018 to December 31, 2019.
GFC assured that the raising of the CET is not intended to stop the importation of pine neither it is a restriction on the importation of pine.
“This measure will enable more competitiveness in the sector and also encourage and drive efficiency, quality and increase in production of local lumber. This will in turn lead to more job creation, income generation and rise in GDP of the forestry sector.”
GFC also noted that there were other measures to jumpstart the lumber trade locally.
“With effect from January 1, 2018, VAT charge will be exempt for logs and rough lumber to the sawmilling industry. This would improve the cash flow of operators in the industry by at least $80 million.”
Logs and rough sawn wood account for over 75% of Guyana’s national production (National production = 350,000 cubic metres annually on average).
“VAT was being charged on logs and rough sawn lumber and this was proving to be a burden on the forestry operator resulting in severe cash flow difficulties and the lowering of production. The removal of VAT on logs and rough sawn lumber will therefore allow more competiveness in the price of locally produced lumber, the easing and freeing up of cash flows as well as drive local production.”