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Government procurement and corporate social responsibility policies influencing UNECE region forest products markets in 2005 and 2006

Published: 08 August 2006

Geneva

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, 2005-2006. It covers forest products market and policy developments in the UNECE region of Europe, North America and Eastern Europe, Caucasus and Central Asia. The UNECE region has a lead responsibility in assuring their sustainable production from forests in and outside the region because it is the main consumer, producer and exporter of forest products in the world (see graphs). This responsibility is why Governments and industry are making green purchasing policies. The study’s main findings are:

  • Government procurement policies and corporate social responsibility policies are new drivers for ensuring the legality and sustainability of the source of wood and paper products in the UNECE region, often including references to certified forest products.

  • Forests certified for sustainable management increased by 12% in area from 2005 to 2006, reaching 270 million hectares (equal to France, Spain, Sweden, Germany, Finland, Norway and Poland combined), which is 7% of the global forest area, but still largely confined to the northern hemisphere’s temperate and boreal forests, and to developed countries: 87% of certified forest is in the UNECE region (58% in North America and 29% in western Europe).

  • UNECE region forest products markets climbed slowly to record levels of 1.4 billion m3 in 2005 as demand from US housing and European construction stimulated production and trade.

  • China has become the world’s largest log importer, with total wood imports increasing 230% since 1997, producing primary and secondary processed products for domestic and export markets, with wood products exports increasing by 360% since 1997; Chinese exports compete with UNECE region producers (see graph).

  • Wood energy received a boost from record high oil prices and the policies that Governments initiated to promote renewable energy sources and to mitigate climate change; woodfuels account for approximately 17% of Nordic countries’ energy needs.

  • The US – Canada Softwood Lumber Agreement was to end in July 2006, restoring $4 billion in duties collected from Canadian sawnwood exporters, and laying out a new seven-year framework for sawnwood trade.

  • Illegal logging remains a critical issue in the forest sector, and both industry and Governments are enacting policies to combat illegal practices domestically and to stop imports of illegal wood products; one major step was the signing of the St. Petersburg Declaration at the Ministerial Conference on Forest Law Enforcement and Governance in 2005.

  • Central and eastern European countries and Russia continue to accelerate out of the socio-economic transition period with increased exports, including value-added wood products.

  • Engineered wood products, which are environmentally friendly and efficiently produced and employed, continued to make inroads into traditional wood products markets and fend off competition for non-wood substitutes.

  • In June of 2006, the International Council of Forest and Paper Associations announced the signing of an agreement by its global member companies on sustainability.

  • For the fifth year in a row, total removals of roundwood in the UNECE region again reached record levels of 1.3 billion m3 in 2005, primarily as a result of increased consumption of sawnwood in Europe and the United States.

  • 2005 was a stellar year for sawn softwood production and exports in the UNECE region, both up 3% to 258 million m3 and 105 million m3 respectively, but may be the high-water mark as markets look more challenging in 2006 and beyond.

  • Consumption of sawn hardwood in the UNECE region decreased by 1.5% to 49.3 million m3 in 2005, mainly due to the continuing decline of furniture manufacturing in Europe and North America.

  • Favourable developments in the main demand markets in residential construction and associated demand for cabinetry and furniture had a positive effect on the wood-based panel industry in 2005 throughout the UNECE region.

  • In Europe in 2005, producers of paper and paperboard set a new record for output at 104.0 million metric tonnes (m.t.) due to higher consumption in Europe plus stronger export markets, but in North America, output of paper and paperboard decreased by 1.5% to 101.1 million m.t. from 2004, due to lower demand and strengthening of the Canadian dollar.

  • Insecurity about future fossil fuel supplies and corresponding escalating prices boosts development of alternative energies, among which woodfuels are the most promising in the short term for medium- and large-scale heat and electricity production; woodfuels also have long term potential for transportation fuel.

  • Public procurement policies may change trade flows of value-added wood products (VAWPs) at the cost of some regions in favour of others; UNECE region’s benefits are uncertain.

  • Public procurement policies in importing countries are beginning to affect tropical timber exports.

  • Storms in Sweden and the United States in 2005 had devastating effects on forest resources, but buoyant markets, aided by the need of reconstruction, absorbed the increased production of wood products.

The Forest Products Annual Market Review begins with an overview of forest products markets and policies, followed by a chapter focusing on policy issues related to 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. Other chapters highlight the rapid developments in wood energy, forest products certification, as well as value-added wood products, e.g. furniture.

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 purchased through the distributors of United Nations publications in various countries or from the United Nations Office at Geneva (e-mail: unpubli@unog.ch).

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: info.timber@unece.org

Website: http://www.unece.org/trade/timber

UNECE region consumes 55-80% of world’s primary forest products, 2005
 

Sources: UNECE/FAO TIMBER database, FAO statistics, 2006.

UNECE region exports 68-85% of world’s primary forest products, 2005
 

Sources: UNECE/FAO TIMBER database, FAO statistics, 2006.

   

China’s booming trade has effects on UNECE region, 1997-2005


 

 

 

 

 

 

 

Sources: Chinese Customs Statistics, 2006.

 

Ref. ECE/TIM/06/P03


United Nations Economic Commission for Europe

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