Ginès Maldonado is an agricultural engineer
specializing in tropical forestry.
He is based in Montpellier, France.
Dominique Louppe is a research expert in the Forest
Department of the International Cooperation
Centre on Agrarian Research for Development
(CIRAD), Montpellier, France.
The development of Ivorian teak, and its trade and marketing in a changing national and international context.
The physical and aesthetic quali-ties of its timber have given teak (Tectona grandis), originally from Asia, its worldwide reputation. It is highly sought after for shipbuilding and both interior and exterior luxury furnishings. With current total production of only 1.5 to 2 million m3 per year (Wint, 1995), teak occupies a marginal position in terms of the total volume of world timber production; yet it competes in high-value hardwood niche markets and is a major strategic element in the forestry economies of the main producing countries (Myanmar, Indonesia, Thailand and India). According to Keogh (1996), teak represents the best opportunity for many tropical countries to produce quality timber.
The growth in international demand has broadened the traditional teak supply base to include plantation-grown small-diameter logs, especially from Africa and Latin America. Côte d'Ivoire occupies first place among the new producers in volume of wood production, with exports of nearly 130 000 m3 of teak timber in 1997 (Maldonado, 1999).
This article seeks to analyse the choices made by Côte d'Ivoire with regard to teak production. It looks at relevant issues of national forestry policy (a changing sector) and international trade (new markets and commercial flows).
A village teak grove in central Côte d'Ivoire
- G. MALDONADO
Teak is the main plantation species in Côte d'Ivoire. Teak plantations covered almost 52 000 ha in 1998 (SODEFOR, 1998), accounting for half of the country's forestry plantations. In terms of the extent of teak plantations outside Asia, Côte d'Ivoire is second only to Nigeria, which has 70 000 ha (Béhaghel, 1999).
Introduced in 1927 with seeds from Togo (Belouard, 1957), by 1929 teak was established in the border zone between closed forest and savannah (Bouaké), spreading rapidly from there. Village teak plantations appeared on the edges of colonial plantation areas.
After Côte d'Ivoire obtained independence in 1960, the State-owned Forestry Plantation Development Company - later renamed the Forest Development Company (Société de développement des fôrets, SODEFOR) - was created in 1966 to conserve and manage the country's forest resources and promote reforestation and plantation establishment. SODEFOR established large mechanized teak plantations in State reserved forests, speeding up the rate of planting.
After a halt between 1974 and 1984 resulting from an economic crisis and major trading difficulties (in particular the near impossibility of selling timber from the first thinnings), the rate of teak planting picked up again, with the expansion of the main plantation sites and the opening of new ones. Interest in the species was renewed after severe fires in 1983 destroyed many plantations of various species, but not those of teak; teak's relatively good resistance to fire was an important attraction. Following the introduction of the Forestry Master Plan in 1992, together with the Forestry Sector Project, teak took the definitive lead among plantation species in Côte d'Ivoire.
A number of phases in the establishment of Ivorian teak resources can be distinguished (Figure 1):
FIGURE 1:
Evolution of teak planting in Côte d'Ivoire, 1929 to 1998
The compulsory reforestation dates from the forestry reform of 1994; companies are obliged to plant 1 ha for every 250 m3 harvested. Companies prefer teak for reforestation because of its ease of establishment. Most of the plantations in this last group are very young, with 40 percent under ten years old (SODEFOR, 1998).
Approximately 90 percent of the country's teak plantations belong to the State, with the remaining 10 percent made up of small private and village plantations (excluding the plantations established by private companies since 1998 in the Bouaké region; these are so young that they are not yet taken into account). The main teak plantations are located in a dozen reserved forests, and more are rapidly being established with the involvement of private individuals, companies and associations. The number of sites and their scattered locations make management difficult for SODEFOR, whose staff and resources are limited.
Because of their geographical dispersion, teak plantations in Côte d'Ivoire are subject to a range of environmental conditions. Growth, which is influenced primarily by rainfall and depth of soil, thus varies considerably. Initial production ranges from less than 5 m3 per hectare per year to more than 16 m3 per hectare per year under the best conditions (Dupuy and Verhaegen, 1993).
The quality of planting stock is a fundamental factor in establishment of teak plantations. The extent of plantation work has forced SODEFOR to use unselected seed for the most part; seed from seed orchards or from selected seed stands (Bamoro, Matiemba) is sufficient for only a few hundred hectares per year. A programme for clonal selection and large-scale propagation is under way, with financial support from the International Tropical Timber Organization (ITTO) (SODEFOR, 1998).
To date, improvement in the growth and form of teak trees has been the breeders' main concern, while wood quality has seldom featured among the selection criteria - even though manufacturers have complained of considerable variation in timber quality. Teak from La Séguié (Rubino), for example, is paler and less dense than that from Bamoro (Bouaké), which is veined and golden, aesthetic qualities much appreciated by manufacturers (Durand, 1984). These two locations have very different climatic and environmental conditions. Large differences in density and colour have also been noted in wood from a single plot or from neighbouring plots in the same area (Société Forestière Tropicale, 1994). Whether these variations are caused mainly by genetic factors or by site or silvicultural factors remains to be studied.
Quantitative and qualitative variations are an impediment to the development of the teak industry in Côte d'Ivoire. Manufacturers also criticize young Ivorian teak for having too many visible knots. Nevertheless, the international market for Ivorian teak grew considerably at the beginning of the 1990s.
There has been considerable controversy over the quality of plantation teak and the effects of shortening the growth
cycle. The main qualities of teak are durability and aesthetic appeal. Various studies have come to different conclusions as to whether there are physical differences between plantation-grown timber and timber harvested from natural forests. Bhat (2000) maintains that shortening the cycle does not affect teak's physical properties, while Durand (1984) reported that it had a decidedly negative effect on the timber's natural durability. In terms of aesthetic properties, timber that grows quickly and is felled when young does not have the desired qualities: it is duller, paler and more uniform, less oily-looking and less pleasant to the touch. The major problem is that short cycles do not allow for heartwood formation, which is a slow process; in young trees, the proportion of sapwood can be as high as 50 percent (Société Forestière Tropicale, 1994).
Variations in quality between natural and plantation teak could have economic implications, and some European manufacturers are starting to express concern in this regard (P.Y. Durand, personal communication).
Both domestic constraints and changes in the global teak market have prompted Côte d'Ivoire to develop a successful teak export trade.
The marketing of teak logs started to pose a problem for SODEFOR at the end of the 1970s, when the volume of thinnings grew larger. Domestic outlets for small-diameter logs were limited to electricity and telephone poles, a sector in which teak would soon be challenged by materials such as concrete and aluminium which were more cost-effective and less susceptible to bushfires.
Furthermore, over the past 30 years, domestic consumption of timber has dropped steadily, while the timber
industry, 85 percent dominated by foreign companies (ITTO, 1998), has been geared mainly towards exports. Prices are not differentiated on the domestic market, and teak has a low market value associated with its sale as fuelwood in urban markets near production centres.
Local people have, on their own initiative, developed a range of wood and non-wood uses for teak (Maldonado and Louppe, 1999), particularly the use of roundwood (poles, stakes and posts) for building as well as agricultural and household purposes (use of the leaves as wrapping for meat in the markets, dyes and pharmaceutical uses, e.g. in baths for anaemic children). These products are still less profitable than timber logs, but they are nonetheless useful as substitutes for more expensive products.
For a long time Ivorian processing companies ignored teak and, more generally, the production of plantations as being outside their natural domain. On the whole, they felt that teak occupied an irrelevant and marginal position in a national production exceeding 2 million m3 per year (ITTO, 1996).
People have developed a range of local uses for teak, especially roundwood (poles, stakes and posts); the photo shows a shelter set on teak poles in a village in northern Côte d'Ivoire
- G. MALDONADO
However, especially since the devaluation of the CFA (Communauté financière africaine) franc (CFAF) in 1994, reviving the forestry industry has taken priority over the vital need to conserve forest resources (Thiam, 1999), and as a result the natural forests have shrunk rapidly. The scarcity of timber has led to an inevitable decline in the processing sector, which accounted for only 1.3 percent of gross domestic product (GDP) in 1997. The industry's main concern has been obtaining sufficient supply, despite a steady expansion in the range of species used.
A few forestry companies have taken advantage of the growth of market opportunities and have moved into the teak market, which saw some very profitable openings in the mid-1990s. However, existing processing units are technologically outdated, and investment in the industry has been blocked by quantitative and qualitative insecurity - there being no guarantee of a regular supply or of a standard quality of processed timber. In addition, overcapacity of the processing industry has worsened the crisis in this sector. A far-reaching forestry reform launched in 1995 has helped bring about a drastic reduction in the number of operators, from 400 in 1995 to 180 in 1996 (Ibo and Kesse, 1998) and 100 in 1999 (Louppe, 1999).
The Asian region has long dominated the production and marketing of tropical woods. This is especially true for teak: Asia holds 88 percent of the world's stocks, with Indonesia alone containing over 40 percent of the world's teak plantations. Thus it is likely that the teak market will continue to be governed by trends in the Asian market in terms of both producing and consuming countries.
Domestic demand in Asian teak-producing countries has grown considerably in recent years, so that most of them have turned to imports of African and Latin American plantation teak, which is available at a lower cost - from US$150 to $250 per cubic metre (US$140 to $150 in February 2000). In Asia, local processing units are often artisanal and are much better suited to working with smalldiameter logs. Countries such as Côte d'Ivoire, Ecuador and Trinidad and Tobago have for some years been feeding the Asian demand for teak logs (to the detriment of the marketing of finished or semi-finished products). Traditional producers of teak logs in Myanmar have been affected to some extent by the new competition, with the loss of some Indian customers since 1995 (TEAKNET, 1998).
Given the inadequacies in the domestic market and wood industry, market studies and promotional activities were initiated by the Centre Technique Forestier Tropical and some manufacturers in the 1980s with a view to opening up outlets for plantation timber (specifically teak, Gmelina spp. and pine). These activities helped to make Ivorian teak better known on the international market.
While European and American teak markets have for the most part stayed faithful to Asian sources of supply (mostly teak logs), there is a strong and rapidly growing demand from India for teak logs from Côte d'Ivoire (Figure 2). In the space of a few years India has become Côte d'Ivoire's almost exclusive customer, accounting for 99 percent of exported Ivorian teak logs. The free on board (f.o.b.) price of Ivorian teak has risen rapidly, from US$60 per cubic metre (CFAF 35 000) in 1993, to more than US$300 per cubic metre (CFAF 160 000) by the end of 1997 (Figure 3) (Maldonado, 1999).
Teak log exports have proved a very profitable market. The volume exported has followed price movements in the international market, increasing, for example, with price increases in 1996 and 1997 and decreasing with the lowering prices in 1998.
SODEFOR and the forestry authorities have been sympathetic to this new market and have made a special effort to meet the Indian demand. Legislation has been modified to allow trade in teak logs, whereas the export of unprocessed logs is forbidden for all other species. The State company has joined with several forestry companies seeking exclusive trading rights, thus establishing strategic and commercial control of the sector.
FIGURE 2: Teak exports from Côte d'Ivoire, 1986 to 1998
FIGURE 3: Prices of Ivorian teak logs, 1990 to 1998
In the past ten years, one of the factors that has encouraged private investment in teak in India, Ghana and tropical America (Costa Rica, Brazil, etc.) has been the development of a marketing strategy suited to products from young and small-dimension timber. Companies in Costa Rica, for example, are processing small-dimension teak and marketing parquet, furniture components and furniture at prices as high as US$1 000 per cubic metre (roundwood equivalent) on the North American market. However, the present Ivorian industrial set-up is ill adapted to processing small-diameter logs, making it difficult to develop a market for teak from thinnings.
A partial readjustment of teak trade flows is under way, with the appearance of new producers on the scene. Asian countries, with Myanmar and Indonesia in the lead, are maintaining their monopoly on premium-quality products in the high value-added luxury market. Growth in this market is limited by supply.
Côte d'Ivoire has chosen to continue to respond to opportunities presented by the Indian market. SODEFOR is even planning an intensification of silviculture by converting to clonal forestry (Martin, Kadio and Offi, 1999), an approach broadly shared by new producing countries, including those in Asia (e.g. Malaysia). However, it seems important to curb this rush of enthusiasm, for plantation teak is often dismissed on the international market, especially when it is of small dimensions (TEAKNET, 1998).
Most of the countries investing in small-dimension teak today have decided to engage in processing and to market finished or semi-finished products. However, unlike these new producers, the main African planters have plantations large enough and old enough to enable them to seek access to a higher-quality market.
Ivorian teak does not yet have a high-quality image on the international market; creating this image will be one of the challenges facing teak producers in Côte d'Ivoire (and in other countries outside Asia) in the twenty-first century.
As large logs from the natural forests in Côte d'Ivoire disappear, the development of the country's processing industry is inevitably focusing on small- and medium-diameter plantation timber. However, Côte d'Ivoire's decision to produce small-diameter logs for export could compromise the medium-term emergence of high added-value local processing.
This said, the current enthusiasm for teak plantations in many tropical countries and the economic necessity for a high rate of return are likely to lead to a significant medium-term increase in the supply of small-dimension teak on the international market, which will "democratize" this wood. Such a trend raises the question of Côte d'Ivoire's place in this changing market, where it will soon encounter strong competition.
In the wake of the 1997 Asian crisis, teak exports from Côte d'Ivoire suffered a downswing: 97 800 m3 in 1998 as against 130 000 m3 in 1997 (Maldo-nado, 1999). Since India is the main purchaser of Ivorian teak, the market is naturally dependent on fluctuations in the Indian timber market. Political and economic instabilities in the two countries make it hard to count on a regular trade. Côte d'Ivoire will therefore need to diversify its outlets.
As SODEFOR controls more than 90 percent of the teak timber resource, harvesters and exporters inevitably have to deal with the company. The situation is entirely new: previously, timber companies paid the State a fixed price for harvesting of timber resources. Now, they buy the wood standing and its price fluctuates with the market. The State com-pany's new commercial role runs counter to the interests of the industry, which would like to see SODEFOR confined to the role of producer. The company's wish to regulate and control management has led to the classification of all plantations as reserved forests.
Nevertheless, as a result of various constraints, teak exploitation may already be exceeding the productive capacity of the country's teak plantations (Maldonado, 1999). Rapid exhaustion of the best village plantations has shown the limits of the resources, as well as the deleterious effects of free access to them. These plantations were completely unmanaged, and the wood was sold directly by the villagers; not recognizing its value, they generally sold it at a very low price compared with that demanded by SODEFOR. Because of the price difference, harvesting companies rushed in and the village plantations disappeared in two or three years.
The rapid growth in exports of teak logs both from SODEFOR plantations and from village lands has produced a number of reactions from local actors. The grip of the State and industrial operators and manufacturers on timber from natural forests in rural areas has resulted in a general lack of involvement of local people in the management of their wood resources.
The villagers' apparent lack of interest derives mainly from the fact that they do not own the trees found on village lands. This factor, together with their lack of knowledge of the true monetary potential of teak wood and of its marketing, has often resulted in careless exploitation; villagers have effectively been robbed of the value of the resource. Thus it has been difficult to motivate most of the rural actors towards a market strategy, and villagers' interest in teak has primarily remained focused on its suitability for local uses.
With the stagnation of the domestic market for teak, legislation has been modified to allow trade in teak logs to meet the Indian demand
- J.-C. BERNARD
Awareness that teak can produce a sizeable income does not fundamentally change the expectations of most farmers, who doubt that they will reap the economic benefits of teak exploitation. Moreover, apart from the technical problems involved, the long time frame of teak production often discourages rural actors from the investment.
The wide range of rural conditions makes any generalized conclusion impossible. It may be observed, however, that although villagers' interest in teak focuses mainly on local requirements and current uses, the aim of producing timber is the main reason for the recent enthusiasm for private-sector investment in teak plantations. This newly awakened interest in teak must be seen in relation to the local actors.
In August 1999, the Government of Côte d'Ivoire adopted a new forest policy framework which will be progressively put into operation in the coming months (Thiam, 1999; Kouassi and Thiam, 1999). Some of the main decisions will radically alter the country's forestry system:
This new policy is intended to encourage the rural population to assume responsibility for wood resources, so that it will manage them better and increase them through planting. The ban on the export of teak logs will create difficulties for SODEFOR by reducing its financial resources.
Villagers' interest in teak has primarily been focused on its suitability for local uses; here, teak is coppiced for poles, posts and fuelwood
- G. MALDONADO
Teak production is still closely linked to Asia, which holds most of the world's teak plantations. The market is, and will remain, determined by the forestry policies of the major producing countries - Myanmar, Indonesia, India and Thailand. For many specialists, teak plantation is an attractive alternative in the face of the declining production of quality timber from natural forests. However, even though prices have shown a marked increase in recent decades (Krishnakutty, 1999), it is hard to predict future market developments. This is well illustrated by the abrupt suspension of exports of Ivorian teak logs to India with the 1999 log export ban.
Village teak woodlot, with teak posts used in fencing
- G. MALDONADO
Côte d'Ivoire will have to look for additional markets for its teak and will have to reorganize its industry to process small-diameter plantation timber. Good-quality Ivorian plantation timber should be able to find a market somewhere between the market for teak from Myanmar and Indonesia and that for small-dimension teak. The latter is expanding fast and has little in common with the main teak market.
Storage of teak poles in northern Côte d'Ivoire
- D. LOUPPE
In West Africa, Côte d'Ivoire is still a strong exporter of timber. But for how long? The timber sector has been showing structural problems for a long time. There is a danger that the serious supply problems could spread to the domestic market in the near future. The problems that are the daily concern of such countries as India, Thailand and the Philippines - formerly exporters of tropical wood, but now among the largest importers of forest products - are likely to become Côte d'Ivoire's problems too. In the long term, plantation timber, especially teak, can be expected to assume a more important position in Ivorian timber markets.
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