26 May 2016

8 Jan 2013

New rules on Burmese Teak imports already affecting market

By

New legislation governing the importation of Burmese Teak is already taking its toll on the teak supply market despite not being enforced until 2014.
 
In October 2012 the Myanmar Ministry of Forestry announced it will ban the export of raw teak from 2014 in a bid to increase exports of higher-earning finished products.
 
Teak Solutions’ Mike Kimble is seeing an impact now, with suppliers stockpiling supplies in anticipation of shortfalls of finished wood currently sourced in India, Thailand, or Malaysia, driving prices up. He predicts prices will get even higher from 2014 because the legislation will enable Myanmar-based businesses to charge a marked up price for the labour involved in milling and finishing their teak, rather than simply selling the raw log at a much lower cost.


 A Myanmar workman loads up logs for sale and export, only possible until 2014

The other development impacting the supply chain is the enforced reduction in logging to preserve the country’s teak forests. The Ministry of Forestry's U Win Tun told The Myanmar Times that teak production fell 15 per cent in 2011-12 and is expected to decline by 15 per cent in the 2012-13 financial year. This can only contribute to the scarcity of teak, and therefore its higher price, whilst Kimble has also noticed a decline in the quality of some teak he has recently been receiving. “If that’s an indication of the deforestation laws then yes, it is having an effect,” he said.
 
The 2014 legislation on raw logs, whilst creating more jobs for the Myanmar people, is a further factor feared to lower the quality of the teak.
 
“If you ask a wood trader he’ll tell you they can’t cut wood in Myanmar,” said Peter Bakker at Gemini Teak. Kimble is considering opening a mill in Myanmar itself to ensure good quality finishing, but political unrest and uncertainty over how regulations will pan out in practice mean this is not yet a straightforward option.
 
Sanctions were lifted by the EU on the importation of teak from Myanmar in May 2012 and the US has also since lifted sanctions on teak. But despite this, unlawful trade has continued to occur, with operators smuggling timber through China, under the auspices of the separatist Kachin Independence Army (KIA), which finances its military campaigns through control of the timber trade through the north Myanmar–China border where it holds its headquarters.


 
However, a second piece of legislation, the EU Timber Regulation (EUTR), due to come into effect in March 2013, is predicted to clamp down on this and add to the market's price hike concerns.
 
The ruling will make it illegal - and fineable - to import teak that has been cut without permits or to import with a non verifiable, traceable supply chain, such as those run by the KIA.
 
“Our timber products will be weak in the global market if we can’t follow the Timber Regulation,” Win Tun said, showing there is pressure for Myanmar to comply with legislation.
 
Indeed Bakker is already bracing for a sea change.
 
“Smuggling will be impossible; there’s a lot of smuggling towards China and I think that’s what they want to prevent. That would be a problem for us if it changes.”
 
Either way, there is no alternative to teak from Myanmar for the best superyacht decking, so the industry will therefore have to work within the new legislations, even if that means paying a higher price for the pleasure of a beautiful, durable teak deck.
 
“There is no other teak for us, we have high standards of quality and it’s only natural grown from Myanmar,” summarised Bakker.


Related Links

Myanmar Times Article
EU Timber Regulation Law outlined on the EUR-Lex Website
'EU to halt illegal importation of Timber' Article on SuperyachtNews.com
Gemini Teak Profile | Gemini Teak Website
Teak Solutions Website
The Superyacht Management Meeting: Environment & Marpol is on 25 June in Barcelona

Comments

Add a comment

1800 character limit

Having problems? Let us know editor@superyachtnews.com

Other Business News

Greek VAT increase to affect charters

As of 1 June the Greek VAT rate will increase from 23 per cent to 24 per cent. This is the sixth VAT increase in as many years and will continue to drive up charter costs. More

MEPC 69

In April the IMO gathered for the 69th session of the Marine Environment Protection Committee. During the committee the status of the BWM Convention was confirmed, further regulations for large vessels were announced and, in principle, the creation of a P More

Rogue frequency disrupts Barcelona's infrastructure

Spanish Police have inspected Barcelona's superyachts in order to determine which vessel's radio communications were disrupting the local rail network. More

Portonovi enters second phase of construction

Azmont Investment and One&Only Resorts have begun the second stage of the One&Only Portonovi development in Montenegro More

business News Archive

Most Recent Comments

  1. Italian export formalities clarified More
  2. New marina opens in Halkidiki More
  3. Win, win More
  4. An Amazing ASEAN Opportunity More
  5. BWA blazes a trail to Albania More
SuperyachtNews app available now. Click here to download.
The Superyacht Intelligence Annual Report is out now. Subscribe today and access your digital copy instantly. Subscribe now.

E-Newsletter

Get regular updates from SuperyachtNews with our weekly Email Newsletter.

Submit

SuperyachtIndex.com

Latest Premium Listings

Cantalupi Lighting Srl

Cantalupi Lighting Srl

Blue Haven Resort and Marina

Blue Haven Resort and Marina

Robert Allen Law

Robert Allen Law

International Crew Training

International Crew Training

McMaster Yacht Management

McMaster Yacht Management

Van Berge Henegouwen

Van Berge Henegouwen

Clean Exhaust

Clean Exhaust

Directory. Add your logo here with a premium listing.
 
 
 
 
 
 
 
 
 
 

Featured Listings

Shore Power Convertors

ASEA POWER SYSTEMS
ASEA POWER SYSTEMS is the Marine Industry Leader for Shore Power Conversion equipment ranging in power from 8kVA - 1000kVa.
www.aseapower.com

Tenders & Toys

Superyacht Tenders & Toys
Superyacht Tenders & Toys have a high level of expertise in providing new build and custom tenders, chase boats, RIBs & all popular yacht toys. With an unrivalled global service network, maintaining a personal & bespoke service, wherever you are in the world, Superyacht Tenders & Toys can help.
www.superyachttendersandtoys.com

Satellite Communication

BestVSAT.com
Over 40 VSAT providers want your contract. BestVSAT.com is a 100% free service. We find the best deals for you - saving you time and money while increasing internet speed and quality aboard. Give it a try - it is absolutely free.
www.bestvsat.com

Navigation

Raytheon Anschuetz
Integrated Navigation Systems based on state-of-the-art technology and decades of experience in the superyacht industry. Ultimate knowledge and flexibility in system integration. Dedicated customer care throughout the whole project and beyond.
http://yacht.raytheon-anschuetz.com

Recruitment

Viking New Zealand Limited
VIKING is the leading Large Yacht Recruitment Specialists and is continually looking for qualified and experienced Deck, Technical and Hospitality Crew. Also providing Full Crew Management Functions including: Offshore Employment, Payroll Services, Crew Administration, Pre-employment Medical Screening and a dedicated Marine Travel Service.
www.vikingrecruitment.com

Shore Power Convertors

ATLAS MARINE SYSTEMS
Atlas Marine Systems, the world leader in the design of marine electrical power systems, offers a full range of engineering services necessary to define the onboard electrical distribution system or simply the application of the Atlas power conversion products.
www.AtlasMarineSystems.com

Satellite Communication

Marlink AS
Marlink offers seasonal, flexible contracts to match regional sailing requirements. Through our dedicated account managers & customer services, we develop personal relationships with customers & drive innovations to develop digital solutions & smart applications that take you beyond just connectivity.
www.marlink.com

Paint & Protection

Wrede
WREDE Consulting is an independent paint consultant and paint surveyor company who has worked for most of the 200 largest yachts worldwide in coating, paintwork and equipment areas. WREDE Consulting engages in quality management and objective quality assessment for the coating of mega- and superyachts. www.wrede-consulting.com
www.wrede-consulting.com

Engine Room

ABB Marine
ABB is a leading supplier of electrical power and propulsion systems for ships. We provide innovative, safe and environmentally-friendly solutions and qualified services worldwide. Our Azipod® propulsion has proven its efficiency and reliability on yacht vessels with its ultimate silent and ecological solution.
www.abb.com/marine

Add your company listing here

Add a featured listing here and your advert will appear on every page of SuperyachtNews.com, SuperyachtIndex.com, TheSuperyachtReport.com and TheCrewReport.com.

Add my company listing