CHINA ACCOUNTS FOR 89 PERCENT OF PNG LOG EXPORTS

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PNG log exports to China tripled since 2000

By Anton Huafolo

PORT MORESBY, Papua New Guinea (The National, July 4, 2008) –China is the main destination of Papua New Guinea’s round logs, accounting for more than 80 percent of total exports, and there is still room to accommodate additional investment to increase production for more timber exports to China and other countries.

Participants at the PNG-Sino Trade and Investment symposium were told yesterday that PNG’s exports of round logs to China tripled since 2000 as a result of increased demand, which saw a shift in which China replaced Japan and South Korea as the top nation for PNG’s round log exports.

Managing director of National Forestry Authority Kanawi Pouru said 88.9 percent of total exports went to China last year, and the export receipts for round logs to China totalled PGK2.6 billion [US$1 billion].

But he said current output is still below the national sustainable allowable cut of 3.5 million cubic metres, and urged Chinese investors to explore opportunities to invest in the forestry sector, including wood processing and plantation forestry in PNG. Mr Pouru said those who invest would benefit from the PNG Government’s 25 percent State purchase options which is the volume of areas available to the State for forestry; zero tax on the export of processed products; tax incentives on onshore investments, and to take advantage of clean energy available from the country’s hydro and gas resources.

He said the main exports to China were Rosewood, Kwila, Taun and Teak, but interestingly, the export of Balsa mainly from East New Britain-based companies increased exponentially over the years, driven chiefly by demand for the wood as it is increasingly used in the art of modelling. Exports of logs and processed wood products account for 6 percent of GDP, providing K350 million-K450 million to the national coffers, K120 million-K130 million in taxes, K35 million-K40 million in royalties and levies to landowners annually, as well as providing community services and employment.

The National: www.thenational.com.pg/

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