Post report left out key points

Letters, Normal

The National, Friday 11th November 2011

THE reporting of comments by Dr Bob Danaya yesterday (Post-Courier, Nov 9) failed to mention a number of key points about the benefits that flow to landowners from logging operations.
The article suggests that resource owners should get a fair price in the region of K500 per cubic metre.
Here are the facts.
Most concessions in PNG have many timber species.
The average price for these species is K250 per cubic metre.
Of this, the PNG government receives 28.5% of the FOB value as export taxes.
At K250 per cubic metre, this is K71.25, lea­ving K178.75.
The government re­ceives an additional K8 per cubic metre as export development levy, taking us to K170.75.
Landowners then re­ceive royalties ranging from K10 to K30 per cubic metre, depending on species.
The average royalty is about K14 per cubic metre.
This takes us to K156.75.
Landowner companies and local level governments receive premiums, levies and other payments.
Average payments in this category are K15 per cubic metre, bringing the total now to K141.75.
Landowners and the government receive K108.25 per cubic metre.
The forestry company gets just K141.75 per cubic metre on average.
This covers operational costs, labour, infrastructure, fuel, extraction costs and other costs such as marketing.
Log prices, like all commodities fluctuate wildly.
Market prices are published fortnightly by the International Tropical Tim­ber Organisation and are publicly available, also from
If Dr Danaya is able to get average prices of K500 for PNG timber on the international market, the entire forest industry as well as the government and landowners – would be grateful.
However, the Post-Courier should have checked the current state of the market prior to reporting Dr Danaya’s comments.

Bob Tate
Executive officer
Forest Industries Association of PNG