Following the fluctuating rates and depreciation of the cedi, which has resulted in the increment in production prices, the Chief Executive of Forestry Commission (FC), Mr. John Allotey, has met with stakeholders in the plantation timber industry. These stakeholders were mainly made up of members of Private Afforestation Developers Organisation (PADO) and Forest Plantation Timber Exporters & Loggers Association (FOPTELA), to discuss an upward review of prices of plantation timber, to give value for money to producers.
Most buyers of plantation products such as Teak, Cedrela, Gmelina and Eucalyptus use FC’s prices as the benchmark to negotiate for price of plantation timber purchased from private developers. Hence, low prices from FC meant low returns to private developers , leading to losses and disinterest in forest plantation development by the private sector.
According to the Chief Executive, there is the need to give value to producers so that buyers can use a bargaining chip to pass on additional cost from their end, to the end user. This means that, the prices given by Forestry Commission can be adjusted by producers.
According to Mr. Kwame Agyei, Regional Manager for Plantations, Forest Services Division (FSD), the value of the Cedi has declined considerably. Consequently, the current price of major plantation timber species is far less than the cost involved in their production.
In his presentation, he referred to a Communique issued at the 4th World Teak Conference 2022, which highlighted the low prices of plantation timber as a major disincentive for forest plantation development in Ghana, particularly for private plantation development.
Some of the reasons that justified the need to review the prices were the prevailing prices paid for plantation timber, which is far less than the corresponding cost of establishment, cost of maintenance of forest plantations, and the growing agitations from private plantation developers concerning the low prices charged by FC which makes their businesses unprofitable. In view of this, FC proposed prices for plantation timber to give value to producers and buyers.
During a discussion by participants from Private Afforestation Developers Organisation ( PADO) and Forest Plantation Timber Exporters & Loggers Association (FOPTELA) , they had disparity on the pricing. PADO wanted the price to be increased while FOPTELA wanted the prices to be reduced. The Chief Executive however , reiterated the fact that the prices proposed are just benchmark prices which can be adjusted by the producers .
Mr. Allotey used the opportunity to appreciate the private sector for their contribution to plantation development.
“We are in a place where we depend largely on the private sector for the development of our plantations. You are doing a lot to ensure plantations are well taken care of, harvested and exported. I have seen the figures, and I am very happy with it”, he concluded