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Local Timber Traders Held As Malawi Changes Law
[June 24, 2011]

Local Timber Traders Held As Malawi Changes Law

Jun 24, 2011 (Business Daily/All Africa Global Media via COMTEX) -- Pressure is piling on the government to use diplomatic channels to secure the release of timber merchants arrested in Malawi recently for violating the country's export ban.

Industry players said the move by the Malawian Government to suspend timber export for one month caught the traders unawares.

"These are people who have taken advantage of Kenya's membership of Comesa to import timber from Malawi in the last seven years without any problem," said Mr Joshua Cheboiwo, a principal researcher at the Kenya Forestry Research Institute (Kefri).

When it announced the suspension of timber export on June 6, Malawian natural resources ministry said the move would allow the southern Africa country to develop export mechanisms that are beneficial to both government and exporters.

The ban came after weeks of complaints from Malawian government officials that almost 80 per cent of timber exported from Malawi to east Africa was unrecorded, denying the government opportunity to collect export duty.

"This is a big blow to the local timber industry but one which can easily be solved diplomatically," said Mr Cheboiwo.

Kenyans get most of the timber from Tanzania but Uganda, Democratic Republic of Congo, Angola and Malawi have also emerged latest key sources of imports.

Data from Kefri indicates that Kenya has been importing between 13,000 to 21,000 tonnes of sawn wood Malawi and compared to between 49,000 and 53,000 tonnes that comes from Tanzania.

The local timber manufacturers have lately been at loggerheads with Malawian government for introducing the 100 per cent export duty on what had traditionally been a free trade between the two Comesa member states. Kenyan importers view the 100 per cent duty as a tariff measures aimed at diverting trade in favour of South African and Mozambique importers.

Malawi, South Africa and Mozambique have a free trade area treaty as members of the Southern African Development Community (SADC). For the many years that Kenya served as the only export destination to Malawian timber, the importers never experienced any problem in the timber trade, importers said "The latest move is a culmination of the many tariff and none tariff barriers that Kenyans have had to put up with in their trade with Malawi in the last six years that South Africa has come out aggressively to scout for the same resources," said a member of the Kenya Timber Manufacturers Association (KTMA).

The association officials put the value of timber imported into the country in 2010 at Sh3 billion, a figure which partly covers the manipulated prices.

On Thursday, however, both the trade and foreign affairs ministry officials would not respond to queries from the Business Daily on the plight of Kenyans held in Malawi.

George Gitonga, the proprietor of Elburgon-based Gachagua Saw Mills, says the strained supply of timber in the local market has driven procurement cost to Sh40,000 per tonne, six times the Sh7,500 per tonne market price that prevailed before the 1999 logging ban.

On Thursday, Mr Gitonga who is the immediate former chairman of KTMA also declined to comment on the Malawian saga.

These sentiments have lately come from local furniture makers. Albert Muasya, the project manager at the Nairobi based Likoni Quality Furniture says high cost of timber has pushed up cost of locally made furniture, making public offices to prefer the cheaper Malaysian ones made of chipboard.

"Without government procurement rules that now favour local enterprises, we cannot compete against Asian suppliers that use fine technology to transform chipboards into cheap office furniture but in the long run, public offices stand gain because local furniture made from expensive hard wood is durable," said Mr Muasya.

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