Entire UNECE region forest sector being reshaped
by wood energy policies and markets in 2006 and 2007
Geneva, 31 July 2007 -- The United Nations Economic Commission
for Europe (UNECE) and the Food and Agricultural Organization (FAO) just
released the UNECE/FAO Forest
Products Annual Market Review, 2006-2007. It covers forest products market
and policy developments in the UNECE member States. The comprehensive report
will be presented at the first joint UNECE Timber Committee and International
Softwood Conference Market Discussions on 8-9 October 2007 in Geneva. The
study’s
main findings are:
- In 2006 and early 2007, United States house construction fell sharply
(see graph, dragging down North American forest products markets,
notably for sawnwood; however, stronger European and CIS markets pushed
UNECE region consumption of wood and paper products to record volumes
of 1.4 billion m3.
- Responding to climate change and energy security concerns,
government policies in Europe and North America are accelerating
woodfuel demand to meet targets for renewable energy.
- Rising demand for
wood energy, in addition to the wood and paper industry’s
increasing demand for wood raw materials, necessitates mobilizing more
wood, which is reshaping the entire forest sector, with long-term opportunities
and short-term consequences.
- Approximately half of the 472 million m3
harvested in Europe, and the 679 million m3 harvested in North America,
is sooner or later used for energy.
- Certified forest area reached
292 million hectares worldwide by mid-2007, with most in the UNECE
region, where in addition to wood, other products are being certified,
including woodfuel and non-wood forest products.
- China now leads the world
in both roundwood imports and furniture exports, which has stimulated
imports of roundwood and sawnwood from the UNECE region, and is an
existential threat for some of the region’s furniture manufacturers
(see graphs).
- China’s forest products output was $140 billion in
2006, increasing by over 25% from 2005; primary products imports
increased by 14% to $17 billion, and exports increasing by 26% to $7 billion
in the same period.
- Half of China’s furniture exports are wooden,
rising rapidly over the last decade, including by 39% from 2005
to 2006, to reach $8.8 billion.
- In
Europe, strong growth in both production (by 4.7% to 110.5 million
m3) and consumption (by 4.0% to 102.1 million m3) (i.e. strengthening
net exporter) of sawn softwood occurred in 2006, rising with increased
prices for sawlogs and sawnwood; conversely, North American prices and
markets fell (production by 3.9% to 122.6 million m3 and consumption
by 5.0% to 122.2 million m3) (see graph).
- Investments in European wood processing
capacity, at times with EU assistance and at times by multi-national
companies, have created greater demand for industrial roundwood and
more production of wood products for both domestic and export markets.
- Russia
implemented a far-reaching Forest Code to improve the whole sector,
and then initiated rising export taxes on roundwood in mid-2007; however,
there were numerous start-up complications. A longstanding US-Canada Softwood
Lumber Agreement was resolved with a new seven-year trade agreement
in 2006, but it remains controversial.
- Germany became Europe’s largest sawnwood producer in 2004, and
its production of sawn softwood escalated again in 2006, by 12%, reaching
23.2 million m 3; together with higher demand for wood for energy and
other wood products, Germany’s roundwood removals continued their
rapid climb in 2006, by over 9.4%, reaching 62.3 million m3 (see graph).
Market summary
Forest products markets in the UNECE region moved up slightly in 2006
to remain at a record level of consumption. However, trends were far from
consistent between the three subregions. Consumption in North America,
the largest consuming subregion, fell by 1.8% in 2006, primarily due to
a severe downturn in US housing construction, by 13% in 2006; another 18%
drop is forecast for 2007. In turn, Canada’s wood products production,
most of which is destined for US markets, also fell, compounded by reduced
harvests in some provinces, the strengthening currency and insect outbreaks.
In North America, these problems together have resulted in panel, paper
and sawmill closures and reduced output and profitability for those that
have stayed in production. In certain localities and product sectors, market
analysts have termed the situation catastrophic.
In contrast to North America, wood and paper markets in Europe have risen
again for the fifth straight year as measured by consumption volumes. Economies
have strengthened over the last year, and in mid-2007, market indicators
suggest continued growth. Sawnwood consumption moved up by 3.4%, with all
of the increase for softwood, as hardwood remained steady. Panel and paper
manufacturers had higher production and exports in 2006 over 2005 and received
higher prices for their products. Strongest overall growth in consumption
in the UNECE region, by well over 5.4%, occurred in the Commonwealth of
Independent States (CIS) in 2006.
The Forest Products Annual Market Review begins with an overview
of forest products markets and policies, followed by a chapter on government
and industry policy issues impacting forest products markets. These are
followed by analyses of the economic factors affecting the forest and forest
industries sector. Statistics-based chapters are included for markets of
sawn softwood, sawn hardwood, wood-based panels, paper, paperboard and
woodpulp, wood raw materials and tropical timber. Additional chapters highlight
the key developments in wood energy, forest products certification, as
well as value-added wood products, e.g. furniture. Electronic annexes provide
supplementary statistical information and the Review’s database
is available on the website below.
In conjunction with the first joint UNECE Timber Committee and International
Softwood Conference Market Discussions to be held on 8-9 October 2007 at
the Palais des Nations, there will be a one-day policy forum on wood energy
and mobilization of wood on 10 October, also at the Palais des Nations.
The market discussions will be based on this report, plus country market
reports and market forecasts for 2007 and 2008. Journalists are encouraged
to register and attend both. See website below.
Copies of the Review may be obtained from the website homepage
of the UNECE Timber Committee and the FAO European Forestry Commission,
at the website below. The Review is also a UN sales document which
can be ordered through the distributors of United Nations publications
in various countries or from the United Nations Office at Geneva (e-mail: [email protected]).
For further information please contact:
Mr. Ed Pepke
Forest Products Marketing Specialist
UNECE/FAO Timber Section
Trade and Timber Division
United Nations Economic Commission for Europe
448 Palais des Nations
CH - 1211 Geneva 10, Switzerland
Phone: +41 (0) 22 917 2872
Fax: +41 (0) 22 917 0041
E-mail: [email protected]
Website: http://www.unece.org/trade/timber
*******
United States housing starts, 2004-2007
Note: SAAR = Seasonally adjusted annual rate.
Source: US
Bureau of the Census, 2007.
|
Chinese forest products imports, 1997-2006
Source: Tan, X. et al., 2007. |
|
Chinese forest products exports, 1997-2006
Source: Tan, X. et al., 2007. |
Sawn softwood price trends in US, Europe and Japan, 2004-2007
Note: Exporters prices are for structural
sawnwood (net sizes) in key markets: 2x4, J-Grade, FOB Japan;
47x100, carcassing,
FOB Europe;
and 2x4, #2, & Better, delivered to Chicago.
Source: Wood
Markets Monthly Newsletter, 2007.
Industrial roundwood, fuelwood and sawnwood production in Germany, 1996-2006
Notes: The authors believe that
the official fuelwood statistics underestimate the actual production.
The
abnormally high production in 2000, which has now been surpassed, resulted
from the windstorms in December 1999.
Source: UNECE/FAO Timber database, 2007.
Ref: ECE/TIM/07/P04