Managing the sales of certified timbers from DERAMAKOT: issues and challenges for the future

Andurus Abi, . and Kugan Frederick, . (2004) Managing the sales of certified timbers from DERAMAKOT: issues and challenges for the future. [Proceedings Paper]

Deramakot is among the few natural tropical forests area that has been certified and bears the FSC logo in its products within this region.Such an achievement however is not without a price as it involves considerable investments and high management inputs in order to bring and maintain Deramakot as its current status. The undertakings to support such activities are very much dependent on the proceeds from logs productions. In this regards the Forestry Department has been closely monitoring the development of logs sales from Deramakot especially during the phase when certification is in place. This paper hightlights the experience of the Sabah Forestry Department in managing the sales of logs produced from Deramakot. Bidding system through auction has been introduced with the expectation that it will increase competitiveness and hence promote better pricing. After more than five years of dealings in Deramakot it is noted that the certification alone will either guarantee greater demand or continuously offer good prices for timbers derived from certified sources. Like any other goods the demand for certified timbers and its prices are equally influenced by many other factors such as the sorting of species the location of stumping points and background of bidders participating in the auctions.Despites various effort taken to deal with these factors the price performance of Deramakot logs have been mixed and the so-called green premium could not be sustained. One of the main reason is the sudden turnaround of buyers interest of Deramakot logs due to amongst others the availability of cheaper certified timbers elsewhere difficulty to establish long-term business relationship limitations on the use of foreign currencies and the transfer of funds and the world timber market situation. Constraints on the part of the Forestry Department in marketing were also identified as a contributing factor. Drawn from these experiences these paper recommends that there is a need to further explore other possible approaches and strategies to improve future handling of these commodities so as to fully realise the benefits of timber certification at the forest management unit level.

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Abstract

Deramakot is among the few natural tropical forests area that has been certified and bears the FSC logo in its products within this region.Such an achievement however is not without a price as it involves considerable investments and high management inputs in order to bring and maintain Deramakot as its current status. The undertakings to support such activities are very much dependent on the proceeds from logs productions. In this regards the Forestry Department has been closely monitoring the development of logs sales from Deramakot especially during the phase when certification is in place. This paper hightlights the experience of the Sabah Forestry Department in managing the sales of logs produced from Deramakot. Bidding system through auction has been introduced with the expectation that it will increase competitiveness and hence promote better pricing. After more than five years of dealings in Deramakot it is noted that the certification alone will either guarantee greater demand or continuously offer good prices for timbers derived from certified sources. Like any other goods the demand for certified timbers and its prices are equally influenced by many other factors such as the sorting of species the location of stumping points and background of bidders participating in the auctions.Despites various effort taken to deal with these factors the price performance of Deramakot logs have been mixed and the so-called green premium could not be sustained. One of the main reason is the sudden turnaround of buyers interest of Deramakot logs due to amongst others the availability of cheaper certified timbers elsewhere difficulty to establish long-term business relationship limitations on the use of foreign currencies and the transfer of funds and the world timber market situation. Constraints on the part of the Forestry Department in marketing were also identified as a contributing factor. Drawn from these experiences these paper recommends that there is a need to further explore other possible approaches and strategies to improve future handling of these commodities so as to fully realise the benefits of timber certification at the forest management unit level.

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Item Type:	Proceedings Paper
Additional Information:	12 refs.
AGROVOC Term:	FORESTRY
AGROVOC Term:	FOREST MANAGEMENT
AGROVOC Term:	LOGGING
AGROVOC Term:	FORESTRY POLICIES
AGROVOC Term:	FORESTRY DEVELOPMENT
AGROVOC Term:	MALAYSIA
Geographical Term:	MALAYSIA
Depositing User:	Ms. Norfaezah Khomsan
Last Modified:	24 Apr 2025 05:27
URI:	http://webagris.upm.edu.my/id/eprint/16244

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