Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 F A O Photo: APA Global Outlook: Supply & Demand for Wood Products Ed Pepke, Ph.D. Forest Products Marketing Specialist Food and Agricultural Organization UN Economic Commission for Europe Geneva, Switzerland
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Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Global Outlook: Supply & Demand for Wood Products.
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Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
FA
OPhoto:
APA
Global Outlook: Supply & Demand for Wood Products
Ed Pepke, Ph.D.Forest Products Marketing SpecialistFood and Agricultural Organization
UN Economic Commission for EuropeGeneva, Switzerland
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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OPhoto:
APA
Asia lumber production & consumption outlook, 1980-2010
0
20
40
60
80
100
120
140
160
1980 1994 2000 2005 2010
Mil
lio
n m
3
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Asia lumber trade outlook,1980-2010
0
5
10
15
20
25
30
1980 1994 2000 2005 2010
Mil
lio
n m
3
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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An asideJapanese and Korean tariffs
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Japanese and Korean tariffs
• In context of WTO trade negotiations, will not support elimination of wood tariffs
• Forest product tariffs protect the domestic industry interest
• Tariffs protect the environment, preserve limited natural forest resources and maintain minimum harvest levels for forest management
• Forestry Agencies of both governments will continue this bilateral forum to protect common trade interests in the forest products sector.
Source: Global Agriculture Information Network, January 2004.
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Sectoral analysis: Panels
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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North America structural production, 1995-2004
Source: UNECE Timber Committee forecasts, 10.2003
0
5
10
15
20
25
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Mill
ion
m3
OSB Plywood
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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European OSB market, 1995-2004
Source: UNECE Timber Committee forecasts, 10.2004
0
1
2
3
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Mil
lio
n m
3
Production Imports Exports
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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America panel consumption & production outlook, 1980-2010
0
10
20
30
40
50
60
70
1980 1994 2000 2005 2010
Mil
lio
n m
3
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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America panel trade outlook,1980-2010
0
2
4
6
8
10
12
1980 1994 2000 2005 2010
Mil
lio
n m
3
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Europe panel consumption & production outlook, 1980-2010
0
10
20
30
40
50
60
70
1980 1994 2000 2005 2010
Mil
lio
n m
3
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Europe panel trade outlook,1980-2010
0
2
4
6
8
10
12
14
16
18
1980 1994 2000 2005 2010
Mil
lio
n m
3
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Asia panel consumption & production outlook, 1980-2010
0
10
20
30
40
50
60
1980 1994 2000 2005
Mil
lio
n m
3
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Asia panel trade outlook, 1980-2010
0
2
4
6
8
10
12
14
16
18
1980 1994 2000 2005
Mil
lio
n m
3
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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An aside on theChinese market
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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China’s expanding trade
• Total export value 2003: $390 billion, +36%• Total import value 2003: 371 billion, +39%• Trade surplus: $20 billion• China & Japan 2003 trade: $120 billion, +31%• China & US 2003 trade: $114 billion, +29%• China & Europe 2003 trade: $112 billion,
+43%• “Sudden growth” of primary product imports:
timber, steel, oil, soybeans
Source: “China Forest Products Market Information”, December 2003
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Sino-US furniture trade: US side
• Chinese share of US market increasing rapidly
• Chinese furniture exports to US– 2000: $1.7 billion– 2002: $2.9 billion
• Anti-dumping investigation requested by 28 American furniture manufacturers in November 2003
• US furniture industry earnings down 70%• US furniture workforce down 34,000
Source: “China Forest Products Market Information”, December 2003
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Sino-US furniture trade: Chinese side
• 60% of China’s furniture exports are “American” furniture– Produced by US-owned companies– US wood– US technology and styles
• Advantage for US manufacturers is low manufacturing costs– Labor– Energy– Taxes
Source: “China Forest Products Market Information”, December 2003
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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China’s booming timber imports
• Housing construction– Only minority wood-based– Green and healthy communities– Affordable
• Renovation market for houses and municipal
• Infrastructure development• Interior woodwork and furnishings• Olympic-related construction (2008
Beijing)Source: “China Forest Products Market Information”, December 2003
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Sectoral analysis: Paper
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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N. America paper & paperboard consumption & production outlook,
1980-2010
0
20
40
60
80
100
120
140
160
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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N. America paper & paperboard trade outlook, 1980-2010
0
5
10
15
20
25
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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European paper & paperboard consumption & production outlook,
1980-2010
0
20
40
60
80
100
120
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Europe paper & paperboard trade outlook, 1980-2010
0
5
10
15
20
25
30
35
40
45
50
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Asia paper & paperboard consumption & production
outlook, 1980-2010
0
20
40
60
80
100
120
140
160
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ConsumptionProduction
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Asia paper & paperboard trade outlook, 1980-2010
0
2
4
6
8
10
12
14
16
18
1980 1994 2000 2005 2010
Mil
lio
n M
etr
ic T
on
s
ExportsImports
Source: FAO Global Forest Products Outlook Study
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Summary: Key market issues (1 of 2)
• Illegal logging and trade of illegally-sourced wood
• Certification of sustainable forest management, markets for certified forest products
• Policies for sound use of wood, wood promo
• Industrial development policies and structural oversupply
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources in N. America
• 80% of net annual increment harvested
• Forest volume increases ~3 million m3 daily
• Forest area 1990 to 2000– USA +0.2%– Canada, no significant change
Sources: State of the World’s Forests 2001; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources in Europe
• Only 60% of wood grown is harvested• Forest volume increases ~2 million
m3 daily • Forestland increases by 500,000
hectares per year
Sources: State of the World’s Forests 2003; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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State of Europe’s Forests
• Resources increasing• Forest health and vitality are critical• Productive functions maintained• Biodiversity is a focus• Plantations are only 3%• Protective forests are 12%• Socio-economic functions important
Source: Ministerial Conference on the Protection of Forests in Europe, 2003.
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources in Russian Federation
• Only 16% of wood grown is harvested• Forest volume increases ~3 million m3
daily • Forest area 1990 to 2000: no
significant change
Sources: State of the World’s Forests 2003; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources: growing stock
0
10000
20000
30000
40000
50000
60000
70000
Europe (41) NorthAmerica
CIS
Growing Stock
Net AnnualIncrementFellings
Million
m
3
Source:Temperate and Boreal Forest Resources Assessment 2000.
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources: NAI vs. fellings
0
200
400
600
800
1000
Europe (41) N. America CIS
Net Annual Increment Fellings
Million
m
3
Source:Temperate and Boreal Forest Resources Assessment 2000.
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Forest resources: NAI vs. fellings
Fellings as% of NAI
Europe-41 60%
EU-15 64%
Nordic countries
72%
Baltic countries
50%
Central & eastern Europe
56%
Russia 16%
North America 80%Source:Temperate and Boreal Forest Resources Assessment 2000.
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Regional forest resource utilization
Note: Not all “forest available for wood supply”Roundwood does not include chips. Therefore, %ages are gross. Sources: State of the World’s Forests 2003, FAO Stat.
Wood in forest (billion
m3)
Roundwoodharvest
2002 (million m3)
Roundwood
harvest 2002 (%)
S & C America
117 439 0.4 %
Russia 89 192 0.2 %
N. America 60 678 1.1 %
Africa 46 613 1.3 %
Asia 35 1,005 2.9 %
Europe 28 395 1.4 %
Oceania 11 63 0.6 %
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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• Removals considerably below growth• Wide variance in utilization rates of NAI • Growing stock increasing in Europe• Southern hemisphere plantations expanding• Oversupply compared to demand for wood• Increasing alternative demands on forests
Forest resources summary
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Growing the market
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Growing too much wood?
Not enough wood products demand?
What are the solutions?
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Grow the wood markets
• Guarantee that today’s wood products meet consumers’ needs
• Develop new products to meet evolving needs
• Develop new markets for wood products: substitute for non-renewable materials
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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How can we grow the wood markets?
• Engage the industry: build coordinated, international promotion programs
• Create favorable policy environments• Promote public awareness of key
issues and messages
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Examples
• FAO/UNECE Forest Communicators Network– creates a positive image of the
forest and forest industries sector– networking among members– identifying key common messages
and concepts– building PR capacity
• Wood Promotion Network
Global Competition: Forest Products Imports ExportsWausau, Wisconsin, USA, 24 February 2004
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Market effects of wood promotion
• Multi-country wood promotion essential to enlarge wood’s market share
• Promotion must be cost justified• Identify and know target markets:
cultural and technical dimensions• Fund raising a problem in fragmented