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United States forest products market crash impacts UNECE region markets

Published: 05 August 2008

Geneva
The United Nations Economic Commission for Europe (UNECE) and the Food and Agriculture Organization (FAO) have just released the UNECE/FAO Forest Products Annual Market Review, 2007-2008. It covers forest products market and policy developments in the UNECE member States. The comprehensive report will be presented at the joint UNECE Timber Committee and FAO European Forestry Commission Market Discussions on 21-22 October 2008 during the European Forest Week in Rome. (Journalists are encouraged to attend.) The study's main findings are:

. In 2007, United States housing construction continued its sharp decline, having severe impacts on the entire UNECE region's forest products markets, as well as world markets (see graph 1).

. Green building systems are a driver of wood products markets, but also a constraint when they discriminate against some sources of wood.

. UNECE region consumption of wood and paper products fell in 2007 for the first time in six years due to the downturn in North American forest products markets, despite a rise in consumption in European and CIS markets (see graph 2).

. Oil prices soared to over US$145 per barrel in July 2008, further stimulating substitution by wood-based biofuels and policies to mobilize more wood from forests and other sources.

. Certified forest area rose to over 300 million hectares worldwide by mid-2008, with most in the UNECE region, driven by green building systems and public procurement policies.

. China's trade with countries in the UNECE region continues to increase: its roundwood imports profit the region's exporters, but compete for local sawlog processors; its exports of finished and semi-finished products benefit consumers with lower-cost wood products, but compete with manufacturers in the UNECE region (see graph 3 and 4).

. In Europe, wood products prices generally rose in 2007, then fell in 2008 as markets weakened, while in North America prices for some wood products, such as sawnwood, dropped to their lowest levels since 1991; globally in mid-2008, prices for roundwood and paper products maintained high levels.

. Russian Federation export taxes on roundwood are disrupting supply for trading partners' sawmills, panel mills and pulpmills; roundwood trade patterns are changing as a consequence.

. Due to the downturn in North American markets, some European market sectors exceeded their North American counterparts for the first time in 2007, with production of sawn softwood and consumption of panels and paper and paperboard greater than that of North America.

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. The third chapter describes economic factors affecting the forest and forest industries sector, with a focus on demand for wood products from construction. The following statistics-based chapters analyse 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.

The Forest Products Annual Market Review 2007-2008 serves to implement the UNECE mandate by providing an up-to-date analysis of markets and policies which is crucial for sustainable development in the forest sector. This is directly in line with United Nations Millennium Development Goal No.7, to "ensure environmental sustainability."

Copies of the 155-page Review may be obtained from the homepage of the UNECE Timber Committee and the FAO European Forestry Commission, at the website below. The Review is also a United Nations 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: unogbookshop@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
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


Graph 1. United States housing starts, 2005-2008

Graph 3. Chinese forest products imports, 1997-2007

Note: SAAR = Seasonally adjusted annual rate.
Source: US Census Bureau, 2008.

Note: 2007 woodpulp, waste paper and paper products imports are secretariat estimates.
Source: International WOOD MARKETS Group, 2008.

Graph 2. Consumption of forest products in the UNECE region,
2003-2007

Graph 4. Chinese forest products exports, 1997-2007
Source: UNECE/FAO TIMBER database, 2008.

Note: 2007 paper products exports is a secretariat estimate.
Source: International WOOD MARKETS Group, 2008.


Ref: ECE/TIM/08/P02


United Nations Economic Commission for Europe

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