New Solomon Islands Benchmark For Determined Logs

PRESS RELEASE

New Solomon Islands Benchmark For Determined Log Price

The Solomon Islands Minister for Finance and Treasury, the Hon Gordon Darcy Lilo, today announced that there will be a new benchmark for calculating the Determined Log Price for Solomon Island logs.

"Up until now, Solomon Islands has relied upon the PNG Free on Board price of log exports to calculate the Solomon Islands Determined Log Price", the Minister said.

"But this does not reflect the true value of Solomon Islands logs. It is no longer relevant and will no longer be used by the Government.

"Instead, the Government will calculate the Solomon Islands Determined Log Price on the basis of market prices for Solomon Islands logs. Specifically, it will be calculated on the basis of the average Solomon Islands Cost Insurance Freight price (in China, Korea and Japan) less average costs for freight, insurance and agents fees.

"This new benchmark will be applied to calculate the new Determined Log Price from 1 October, and will be done on the basis of the then most current prices and costs at that time.

"This mechanism will also be used in future to regularly, and objectively, adjust the Determined Log Price."

The Minister said he had arrived at this decision after very constructive consultations with the Solomons Forestry Association.

"I welcome the open, constructive and understanding approach the SFA have taken to this issue.

"I especially welcome their understanding that the PNG FOB price is no longer relevant to Solomon Islands, and that it is time Solomon Islands had its own objective benchmark for calculating the Determined Log Price."

The Minister said further consultations would now be held with the SFA over the next 2 months to agree both the sources for determining current prices and costs under the new benchmark, and their current value.

"As a result, I have decided to continue the existing Determined Log Price for another 3 months.

"I strongly believe this is in the interests of all, and will allow a workable, objective and highly relevant benchmark to be applied to calculate the Solomon Islands Determined Log Price, both from 1 October and at all times thereafter."

For more information on this press release contact Shadrach Fanega, Permanent Secretary, Ministry of Finance and Treasury, on phone (677) 21058, fax (677) 27855.

ENDS

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