LOGGING is still one of the country’s key export commodities but its contribution is expected to decline soon as log exports move to more sustainable levels.
Minister of Finance and Treasury Harry Kuma made this statement when speaking in parliament on Tuesday.
Mr. Kuma said logging activities were severely affected by COVID-19 trade disruption in April.
However, he said in recent months, the log volumes have recovered.
“While performing strong, there continues to be heightening uncertainty about impacts on trade for the second half of 2020.
“The total volume of log export for 2020 is expected to be contained to around 1.95 million cubic meters,” he added.
A recent report from the Central Bank of Solomon Islands (CBSI) highlighted that logging as one of the country’s key export commodities could be affected by this global pandemic.
It said China is the key destination for the country’s round logs export but the pandemic might cause an 11 percent fall in log output to 2.2million cubic metres.
CBSI said that foreign exchange from logs could also decline by 9 percent to $2.3billion.
Mr. Kuma said in light of the country’s fiscal position, the outlook is challenging.
“If logging declines faster than expected then there will be a more profound impact on revenue directly via decreased activity in the economy leading to lower revenue collections across many revenue sources,” the Finance Minister said.
By ANDREW FANASIA