Wednesday, April 1, 2009

ILLEGAL WOOD TRADE BAN IN THE US

The U.S. House of Representatives passed landmark legislation to address the global illegal logging crisis. The law would make the United States the first country in the world to prohibit the import, sale, or trade in illegally-harvested wood and wood products.
The law made changes in the wildlife trafficking regulations, the Lacey Act, to include timber, wood products and other plants. The Environmental Investigation Agency (EIA), the leading environmental organization providing expertise to policy makers on illegal logging and associated international trade, estimates that 10% of annual wood product imports into the U.S. - worth some $3.8 billion dollars - are derived from illegally logged timber.
EIA claims that Vietnam is a hub for processing Asia’s illegal wood logs, much of which is imported to the United States as furniture. Vietnam exported 2.4 billion USD worth of wooden products last year. The agencies estimate that 500,000 cubic meters of logs move illegally from Laos to Vietnam every year. Large volumes of timber from Laos also go to China’s burgeoning wood-processing industry, researchers say. The ‘Vietnam Wood and Forestry Association’ have sent a document to EIA denying the report findings and have requested the author make corrections and publish an apology.
China is considering various measures to reduce logging of their own forests, while import’s wood from neighboring countries for growing wood-processing industries in China.
According to the World Wildlife Fund (WWF), China’s demand for imported industrial wood — timber, paper and pulp — will grow by at least 33 percent within the next five years, from the current 94 million cubic meters to 125 million cubic meters.
I believe that going forward ,international pressure will force Asian countries to be ethical in restricting illegal usage of natural resources, at least to the extent of exports to International markets. Growing awareness will encourage more certified wood usage, but limited wood supply will affect wood and wood product prices. Even the EU would extend its environmental support soon just as the US did. Imports of illegal wood products from regions like china and Vietnam will affect these regions as the percentage of illegal wood consumption is very high. China is already surrounded by several issues with respect to environment, labor, subsidies etc., these will affect china going forward as it is the leading manufacturer of paper and furniture products. A rise in timber prices has prompted some wood-producing countries, such as Indonesia, to clamp down on illegal logging.

MISCH METAL MARKET OVERVIEW

From the late 1990s to the present, there have been significant changes in both supply and demand for individual rare earths. In the past year, prices for all elements except for europium (used in phosphors) have increased. Rechargeable NiMH batteries are the battery of choice for hybrid vehicles and the Global demand for hybrid-electric vehicles (HEVs) is expected to reach 3.9 million by 2015. If the number of NiMH batteries increased from the hybrid vehicles demand, then it could touch 20,000 metric tons of rare earth by the year 2010. Chinese Export Quota for Rare Earths has been reducing from 2004 in a considerable manner. For this Year, it has been cut by 22% by the government. This could create some imbalance in Global Rare Earths Market. Chinese consumption has risen from 40% to 36,000 metric tons REO (Rare Earths Oxide) in 2004 to 60% of 73,500 metric tons REO in 2007. This growth is due to a combination of production quotas, restrictions on foreign investment in the rare earths industry, export taxes and export quotas. In addition, China’s dominance over world supply which is currently 92% means it has significant influence on the future of the rare earth industry. Currently the substitution for Li ion batteries is NiMH batteries are minimal. Li batteries could replace NiMH batteries in future; this may bring down the demand for rare earths from this segment. Toyota’s Prius is the largest selling brand of hybrid vehicles in the world. Toyota is expected to produce 1 million hybrid vehicles in 2010. Moreover the total hybrid vehicles by the year 2012 are predicted to be around 3 million.

WHY PROCUREMENT INTELLIGENCE!

“Most World Class Organizations have realized that procurement is a key component for sustainable business success.” James Yates, COO of Cutting Edge Commerce.
Only 1 in 10 procurement professionals can extract critical information.
Managing spend across the supply chain would require expertise with understanding supplier strategies, competitor analysis and more importantly ,customized (Companies today need a service that collects business and market intelligence from multiple data sources across the world and delivers only relevant and customized information) real-time and confidential information in order to ensure sustainability. Market intelligence with emerging sourcing, planning, procurement, monitoring, and analytics have become extremely crucial in effective cost control.
The emergence of procurement intelligence providers can be primarily attributed to a critical gap that had been discovered, lack of good quality research as a result of data overload. Procurement executives spend approximately 45- 50% of their time on data analysis. A procurement intelligence provider’s role hence is crucial in the sense that they provide customized research that can be instantly integrated in to the organizations strategic plans. Procurement intelligence therefore— provides a “single point of truth” for all procurement-related data, analysis and intelligence.