The International Timber Trade

The international timber trade

The international timber trade TIM PECK

Cambridge England

Published by Woodhead Publishing Limited, Abington Hall, Abington Cambridge CB1 6AH, England www.woodhead-publishing.com First published 2001, Woodhead Publishing Ltd © 2001, Woodhead Publishing Ltd The author has asserted his moral rights. This book contains information obtained from authentic and highly regarded sources. Reprinted material is quoted with permission, and sources are indicated. Reasonable efforts have been made to publish reliable data and information, but the author and the publisher cannot assume responsibility for the validity of all materials. Neither the author nor the publisher, nor anyone else associated with this publication, shall be liable for any loss, damage or liability directly or indirectly caused or alleged to be caused by this book. Neither this book nor any part may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, microfilming and recording, or by any information storage or retrieval system, without permission in writing from the publisher. The consent of Woodhead Publishing Limited does not extend to copying for general distribution, for promotion, for creating new works, or for resale. Specific permission must be obtained in writing from Woodhead Publishing Limited for such copying. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation, without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN 1 85573 190 8 Cover design by The ColourStudio Typeset by Best-set Typesetter Ltd., Hong Kong Printed by TJ International, Cornwall, England

Contents

1

2

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ix

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xii

Abbreviations, acronyms and symbols . . . . . . . . . . . . . . . . .

xiv

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Historical perspective . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Early history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Beginnings of deforestation . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

Development of trade in wood products . . . . . . . . . . . . . . . .

10

Global forest and wood resources . . . . . . . . . . . . .

16

Principal forest types and their distribution . . . . . . . . . . . . .

16

Extent and composition of the world’s forests . . . . . . . . . . .

20

Ownership and management of the forest resource . . . . . . .

32

The wood harvest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

v

CONTENTS

3

4

5

6

7

Production and consumption of wood products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46

Properties of wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46

Types of product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49

Patterns and trends of production and consumption . . . . . .

53

Uses of wood products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73

The place of wood industries and wood products in the global economy . . . . . . . . . . . . . . .

84

Wood industries in national economies . . . . . . . . . . . . . . . . .

84

Wood products in international commodity trade . . . . . . . .

90

Overview of world trade in wood products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98

Distribution of world trade in wood products by commodity groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98

Distribution of world trade in wood products by country groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

Changing pattern of commodity composition in trade . . . .

103

Trends in trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

Trade in added value wood products . . . . . . . . . . . . . . . . . . .

119

Trade flow patterns and trends . . . . . . . . . . . . . . . 126 Some basic principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126

General trade patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128

Trade flow patterns of individual wood products . . . . . . . . .

131

Major changes in trade flows . . . . . . . . . . . . . . . . . . . . . . . . .

144

The major players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Trading structures and corporate players . . . . . . . . . . . . . . . .

154

Major trading nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158

Emerging and declining suppliers and markets . . . . . . . . . . .

197

vi

CONTENTS

8

9

10

Influences on wood products markets and trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Costs, prices and exchange rates . . . . . . . . . . . . . . . . . . . . . .

202

Futures markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

211

Tariff and non-tariff barriers . . . . . . . . . . . . . . . . . . . . . . . . . .

213

Globalisation and regional integration . . . . . . . . . . . . . . . . . .

222

International institutions concerned with wood products trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226

Trade and the environment . . . . . . . . . . . . . . . . . . . 229 Deforestation, afforestation and reforestation . . . . . . . . . . . .

229

Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

237

Certification and labelling . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242

Waste and recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246

Energy and climate change . . . . . . . . . . . . . . . . . . . . . . . . . . .

251

Past, present and future . . . . . . . . . . . . . . . . . . . . . . . 259 The need for a long-term outlook . . . . . . . . . . . . . . . . . . . . .

259

Highlights from Chapters 1 to 9 . . . . . . . . . . . . . . . . . . . . . . .

260

The outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

272

General findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

286

Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288

Implications for trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

291

Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

292

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

295

Appendix 1 List of selected international organisations concerned with the trade in wood products . . . . . . . . . . . . . . . . . . .

302

Appendix 2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

307

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

315

vii

Preface

T

he international timber trade is aimed at several different reader groups. It is intended as a general source of reference for those working in, or aspiring to, management positions in the timber industry or trade. It should also provide an introduction to this important sector of the world economy for those who require a broad understanding of it for the purpose of their business activities, including bankers, financiers, investors and the legal profession. Thirdly, it may prove useful to teachers and students, more in providing a general overview of the forest and forest industries sector than in offering an in-depth analysis of it. Fourthly, it should be of help to politicians, negotiators, government officials and their advisers as background for developing policies towards the sector and international trade. Last but not least, it may offer background information and some alternative viewpoints for those working in international organisations and in national and international non-governmental bodies. To satisfy such a broad readership is a bold objective, and it must be left to readers to judge to what extent the book has achieved it. In doing so, they should be aware that there are some things which the book is not intended to be or do. It is not a guide on how to manufacture or use wood and its products or how to trade in them; nor is it a Who’s Who of timber trade companies or personalities. Equally, it is not meant to give an up-tothe-minute account of timber markets which, since they are in continuous ix

PREFACE

evolution, would become rapidly out of date. Instead of this, it looks at them in a longer term perspective. From the outset it is essential to be clear about the meaning of the terms ‘timber’ and ‘trade’ in the context of this publication. ‘Timber’ suggests different things to different people: some think of it as the trees growing in the forest, others as sawnwood or even quite sophisticated products manufactured from wood. Here it is used as a generic term for wood as a raw material as well as the products manufactured from it, including sawnwood, wood-based panels, woodpulp, paper and paperboard and their manufactures. ‘Timber’ is used in the title, partly for the sake of conciseness, but it should be taken as being synonymous with ‘wood products’, the term more often used in this text. Quite often the term ‘forest products’ is used with the same meaning as wood products, as for example by the Food and Agriculture Organization of the United Nations (FAO) in publications such as the FAO Yearbook of forest products. Its use is avoided here, however, because the term could also be understood to cover non-wood products such as cork, resin, berries, nuts and mushrooms. With regard to paper and paperboard, a companion volume was published in 1998 under the title The international paper trade, to which the reader is referred for more detail on those products. Care has been taken in writing The international timber trade to avoid overlapping with that excellent book by Tom Bolton. The term ‘trade’ is used with a broader connotation than just the exchange of goods between one country and another, even though international trade does form the core of the book. In order to appreciate the structure of trade and the way in which trade has evolved, it is necessary to look also at the forest resource from which the raw material is obtained, the processes by which it is converted into a variety of products and the way in which those products are utilised. For the same reason, some of the principal factors having an impact on the trade in timber, including international conventions and regulations, moves towards integration and globalisation and the international debates and initiatives surrounding the protection of the environment and sustainable development are also treated. Anyone who has followed the international debates on the environment over the past few decades will be aware that forests, their management and use have figured more and more prominently in them and have attracted increasing attention from politicians and the public. Chapters 1 to 3 provide a general background starting with an historical perspective and overview of the forest resource. These are followed in Chapters 4 and 5 by a general description of the patterns of production, consumption and trade of wood products and of their importance as a commodity group to national economies and trade. Chapter 6 contains a more detailed analysis of the main patterns of trade and the trends, both at the inter-continental and intra-regional levels. The third section, in Chapters 7 to x

PREFACE

9, looks at the structure of trade, market- and trade-related features and environmental aspects as they affect trade, with Chapter 10 offering a brief outlook for the opening years of the twenty-first century. It is evident that the scope of the book would have made it virtually impossible to prepare without the help and advice of many other people. Those to whom the author is immensely grateful are listed in ‘Acknowledgements’, but special mention should be made here of Brita Waters Taylor, Chijien Lin and Bruce Michie, who compiled material which formed the basis for Chapters 4, 5 and 6 respectively and Chris Elliott, who cast a critical eye over Chapter 9. Heartfelt thanks are also due to my wife, who not only provided moral support over the months and enough coffee and tea to float a supertanker, but also checked through the entire text for my erratic spelling and grammar. Throughout the preparations, Neil Wenborn, as editor, provided invaluable encouragement and guidance. Any factual mistakes or errors of omission – and some will almost certainly be found – are entirely my responsibility and in no way to be blamed on those who have so generously supported me. Great care has been taken to verify the information contained in this book, which I have selected and presented by drawing on many years’ experience in the forest and forest industries sector at the international level. Neither I nor the publisher can be held accountable, however, for the consequences of any action taken, or commercial decisions based on, or attributable to, this book. Tim Peck

xi

Acknowledgements

M

y sincere thanks are due to a large number of people, who have contributed in one way or another to the preparation of the book and who are listed below. Some have provided specific information on their countries or organisations; others have prepared information at my request or have undertaken research; yet others have provided documentation, advice and contact addresses. Without their help, the book could not have been written, but any errors in the book are entirely my responsibility, in no way theirs. Nasreen Abdul-Haque Mauro Agnoletti Jorma Ahvenainen Michael Avosa James Barton Eric Biolley Jim Bourke Michael Buckley Nikolai Burdin Clive Catton Hutacharern Chaweewan Roger Cooper

Chijien Lin Agneta Linstedt Leo Lintu Jörg Maxin Bruce Michie Heiner Ollmann Matti Palo Ed Pepke Kit Prins David Rhodes Jeff Sayer Peter Schwarzbauer xii

ACKNOWLEDGEMENTS

Steve Dembner Audrey Dixon Nigel Dudley Richard Duncan Bob Edgett Chris Elliott Alfonso Froncillo Elisabeth Johann Leila Konturri

Birger Solberg Darmo Suparmo Jukka Tissari Bill Townsley Herman Van der Meiden Jari Varjo Philip Wardle Brita Waters Taylor Adrian Whiteman

xiii

Abbreviations, acronyms and symbols

Abbreviations and acronyms ACP AD

AF&PA ASEAN ATIBT ATO BC

CDM CFPs CH4 CSD CEI-Bois cif CIFOR CINTRAFOR CIS CITES CME

African, Caribbean and Pacific Group of States Anno Domini (after Christ) American Forest and Paper Association Association of South-East Asian Nations International Technical Association for Tropical Timber African Timber Organization Before Christ Clean Development Mechanism Certified forest products Methane Commission on Sustainable Development (of the United Nations) European Confederation of the Woodworking Industries Cost, insurance, freight Center for International Forestry Research Center for International Trade in Forest Products Commonwealth of Independent States Convention on International Trade in Endangered Species of Wild Flora and Fauna Chicago Mercantile Exchange xiv

ABBREVIATIONS , ACRONYMS AND SYMBOLS

CMEA CO2 COFO COMTRADE CSA dbh D-I-Y DMECs ECU EFI EFIDAS ENGO EMS ERUs ETTS ETTS I ETTS V EU EUROSTAT FAO FAWS FCCC fob FoE FSC G7 GATT GDP GHGs GNP GSP IIED IFF IPCC IPF ISO ITC ITTC ITTO LVL

Council for Mutual Economic Assistance Carbon dioxide Committee on Forestry (of FAO) Commodity Trade Statistics database (UN) Canadian Standards Association diameter breast height Do-it-yourself Developing market economies and China European currency unit European Forest Institute European Forest Information and Data System (of EFI) Environmental non-governmental organisations Environmental Management System Emission reduction units (Series of) European Timber Trends and Prospect Studies European Timber Trends and Prospects (1953) European Timber Trends and Prospects into the TwentyFirst Century (1996) European Union Statistical Office of the European Commission Food and Agriculture Organization of the United Nations Forest available for wood supply Framework Convention on Climate Change Free on board Friends of the Earth Forest Stewardship Council Group of Seven Industrialized Countries (G8 includes Russian Federation) General Agreement on Tariffs and Trade Gross Domestic Product Greenhouse gases Gross National Product General System of Preferences International Institute for Environment and Development Intergovernmental Forum on Forests Intergovernmental Panel on Climate Change Intergovernmental Panel on Forests International Organization for Standardization International Trade Centre (UNCTAD/WTO) International Tropical Timber Council International Tropical Timber Organization Laminated veneer lumber xv

ABBREVIATIONS , ACRONYMS AND SYMBOLS

MDF MFN NAFTA NAI nes NGO NTM ob OECD OPEC OSB PEFC SEALPA SFI SFM TBDCs ub UKWAS UN (UNO) UNCTAD UN-ECE UNEP UNIDO UNSTAT UR USDA US$ USSR (Former) WCED WFSE WRI WTO

medium density fibreboard Most Favoured Nation North American Free Trade Agreement Net annual increment not elsewhere specified Non-governmental organisation Non-tariff measure overbark Organization for Economic Co-operation and Development Organization of Petroleum Exporting Countries oriented strand board Pan-European Forest Certification Scheme South-east Asian Lumber Producers Association Sustainable Forest Initiative Sustainable Forest Management Temperate and boreal developed countries underbark United Kingdom Woodland Approval Scheme United Nations Organization United Nations Conference on Trade and Development United Nations Economic Commission for Europe United Nations Environmental Programme United Nations Industrial Development Organization United Nations Statistical Office Uruguay Round (of GATT negotiations) United States Department of Agriculture United States dollar Union of Soviet Socialist Republics (Former) World Commission on Environment and Development World Forests, Society and Environment World Resources Institute World Trade Organization

N.B. For abbreviations of country names, see page 160.

Symbols bn ca cap cm

billion or thousand million circa/about capita centimetre xvi

ABBREVIATIONS , ACRONYMS AND SYMBOLS

cm3 g ha m m3 (or m3) m3 EQ (or m3 EQ) m3 ob (or m3 ob) m3 ub (or m3 ub) mbf mt ppm sq ft .. – * $

cubic centimetre gram hectare metre cubic metre, solid volume cubic metre, equivalent volume of wood in the rough cubic metre of wood raw material, overbark measure cubic metre of wood raw material, underbark measure thousand board feet metric tonne parts per million square foot data not available nil or less than half a unit estimate or unofficial figure dollar

Note on tables The data used in the tables have often been rounded off from those used in the original sources. Additions and percentages, e.g. per cent of total or per cent change from one year to another have been calculated on the basis of the more detailed data, so that small discrepancies in calculation may occasionally be found in the tables. Data for use in the tables and figures have been taken from a number of authoritative sources, including the UN Statistical Office, UNIDO, UN-ECE, OECD and EFIDAS. The FAO forestry database offers the most comprehensive series of statistics on the production and trade of wood products, and great reliance has been placed on this source in order to ensure that the statistics used throughout the book are as consistent and as comparable as possible.

xvii

Introduction

W

hen my daughter was in junior school, her teacher invited me to talk to the class on a subject related to forestry. Anyone who has had to face a roomful of 8-year-olds will know how daunting a task it can be to keep them interested for 45 minutes – my admiration for teachers is boundless! I decided that, rather than talk all the time, I would challenge them to make a list of all the things made from wood which they could observe around the classroom. The outcome was, I think, quite an eyeopener for many of them. We started with objects close to hand, such as pencils, rulers, desks and chairs, then to other things, such as the teacher’s table, doors, window frames, floor boards, wall panelling, skirting boards and picture frames. When they realised that paper was also made from wood, they added writing pads, books, magazines, cardboard boxes, wrapping paper, wall charts, maps and tissues. Although not strictly made from wood but certainly coming from trees, we agreed that the cork pinboard and erasers could also be included. After that it became more difficult, and it was necessary to explain that several things that were not immediately visible or obvious were also the products of wood, such as the fibreboard backing to the blackboard and the shirts and sweaters made from rayon that some of them were wearing. Altogether, we came up with a list of about 40 items. It made the children realise how bare the classroom would be if all the wood products were 1

INTRODUCTION

taken away and how dependent they were on them in everyday life. I went on to explain that these were just a small fraction of the wood products in common use: if they looked around their homes, they could probably double or triple the number of wood items on their lists quite easily. Quite apart from wood, I pointed out to them that the forest provides a whole range of other things, tangible and intangible, from which we benefit and which we tend to take for granted. These include food items such as mushrooms, berries, nuts, honey and game meat, and other materials such as cork, tannin, resin, Christmas trees, decorative foliage, medical products, essential oils for pharmaceutical products, and fodder and litter for animals, to mention just a few. Besides that, trees are essential to life on our planet because of the oxygen they produce during the photosynthetic process, and forests serve other important functions such as regulating and filtering water, stabilising soil, protecting us from avalanches, rock- and mud-slides, providing wildlife habitats and places for recreation and leisure and acting as filters for pollution and noise. This brief excursion back to the classroom has been to underline two basic facts: first, that wood is a versatile and renewable raw material from which a remarkably wide range of everyday products are obtained; second, that wood is only one, although in value terms the most important, of many outputs from the forest. So, even though this book is concerned just with wood and its derivatives, it will be worth keeping in mind that they comprise only a part of the forest story. Wood is one of the most important renewable materials, and as such is destined to play a vital part in tomorrow’s world as non-renewable raw materials, such as fossil fuels, are used up. But wood is only renewable if the resource from which it comes, the forest, is looked after in a sustainable manner. Thus the book will attempt to examine the extent to which the concept of ‘sustainable forest management’ (SFM) has been and is being applied globally, and the interrelation of this concept and international trade. How, and how much, wood is used depends on a number of factors. In the first place, its availability in proximity to the user is important and, linked to that, traditions in its use. A good example is the common use of timberframe construction for family dwellings in the boreal regions with their abundance of coniferous forests. Compare that with the sparing use of wood in the forest-poor countries of the Middle East and North Africa. Secondly, the density of population and the level of economic development affect the issue. The former has some impact on the total amount of wood used; the latter also has an influence on the forms and ways in which it is used. At low levels of development, as measured by per capita Gross National Product (GNP), it is used in large quantities in unprocessed form, notably as fuelwood, construction poles and other products requiring little or no transformation. With increasing wealth, these uses give way to more sophisticated 2

INTRODUCTION

products and applications and more varied patterns of utilisation. Thirdly, and specifically for printing and writing papers, levels of literacy are an important determinant of the level of use. Other factors have local or regional impacts, such as building regulations and the availability of alternative materials. These matters will be taken up in more detail in later chapters, but in order to keep the discussion reasonably concise, it will be necessary to aggregate both the products and countries into manageable groups. The fact that this book is particularly concerned with international trade also affects the groupings chosen. With regard to products, the groupings are: • • • • •

Wood raw material. Sawnwood. Wood-based panels. Woodpulp. Paper and paperboard.

Other products, for example recovered or waste paper and the so-called added value products, are also treated to the extent possible. There is no ideal choice of country groupings: it depends very much on the topic under consideration. A reasonably satisfactory grouping from the point of view of the distribution of forest resources, for example, would be unsuitable for the analysis of the pattern of wood products consumption. For the purposes of this book with its emphasis on trade, the following groupings are used: • • •

• •

• •

North America: Canada, United States of America. Europe: the 15 countries of the European Union and others ranging from Iceland to, unless otherwise stated, Cyprus, Israel and Turkey. Former Union of Soviet Socialist Republics (former USSR): the 12 countries of the Commonwealth of Independent States [CIS] and the Baltic States [Estonia, Latvia and Lithuania]. East Asia: China, including Taiwan Province and Hong Kong Special Administrative Region, Japan and South Korea. Other Asia-Pacific: a heterogeneous group from the point of view of trade, as will be seen later, ranging from the countries of the Middle East to Oceania. Africa: also with a wide climatic range from the arid conditions in North Africa to the tropical rain forests of Central Africa. Latin America: including the Caribbean countries.

These regions are demarcated in the map on page 6. As will be shown in later chapters, the main exporting regions of wood 3

INTRODUCTION

products are Europe, North America and Other Asia-Pacific; and the main importing regions Europe, East Asia and North America. Because all the regions and the large majority of countries are both exporters and importers, it is necessary to give consideration not only to inter-regional trade but also that within the regions. A large proportion of Europe’s and North America’s trade is intra-regional, but they are also major players in inter-regional trade. Intra-regional trade is important in Europe because of the rather large number of countries. If, for example, trade between the 15 members of the European Union were to be treated as the movement of commodities within one political entity, as is coming to be accepted, the volume of intraEuropean trade would be substantially smaller. The former USSR separated into 15 distinct States in the early 1990s. One country, the Russian Federation, holds more than 90% of the group’s forest resources and is also predominant in the production and trade of wood products, even though for the time being the volumes involved are mostly well below the levels reached in the 1970s and 1980s. The southerly members of the Commonwealth of Independent States (CIS) are generally poorly endowed with forests but at present are unable to afford the importation of wood products to meet the latent demand. On the other hand, the three Baltic States have been expanding their exports, which have partly filled the gap caused by the fall-off in those of the Russian Federation. This book is not intended to provide an up-to-the-minute account of developments in international wood markets, but rather an overview of the sector as it stood in the years leading up to the third millennium. The years or periods covered are, however, the most recent for which data were available at the time of writing, bearing in mind that there is often a considerable time-lag involved in compiling and publishing international statistics. Most of the data on production, trade and consumption relate to 1997, but some of the macro-economic data are for an earlier period in the 1990s, as are those on the forest resource. Where it is important to illustrate more recent trends, any available information on 1998 or later is employed, even if it is of a provisional nature or estimated. While wood products are not the largest group of commodities being traded internationally, they are among the most important and have an impact on countries’ balances of trade. Over the years the commodity pattern of trade in wood products has altered, with the further processed products gaining in share. Because of difficulties in compiling the necessary data at the global level, trade in the so-called added value wood products has not been described as comprehensively as that of wood raw materials and the primary processed products. But at least enough has been included about the former to give a general impression of their development and to show that they account for a substantial and increasing proportion of the total trade in wood products. 4

INTRODUCTION

The globalisation process has also been having an important impact on the world economy and international trade, including that of wood products. Manufacturing and trade are being concentrated more and more into the hands of fewer and larger companies; many of the traditional family trading firms are disappearing and the role of intermediaries is being reduced as direct trading expands between producer–exporter and retailer or consumer. Further changes can be foreseen with the growing adoption of new technologies, such as trading on the internet. Forests have been at the centre of the debate on environmental protection. The precise role of commercial exploitation of natural forests and the trade in wood products in the loss and degradation of forests, particularly in tropical regions, is controversial, even if they are generally acknowledged not to be the primary cause. Nevertheless, a noticeable shift is occurring away from the harvesting of natural forests towards the management and use of forests on a sustainable basis, and even more towards the production of wood in fast-growing plantations. It is quite possible that within a few decades very little wood will be commercially logged from natural forests, because those natural forests that still exist either will be protected from commercial exploitation or will have been brought under systems of sustainable forest management. This will be reflected in changes in trade patterns. The increasing quantities of wood coming from industrial plantations, which are more akin to tree farms than forests, will also have a growing influence on world trade in wood products, both in terms of the commodity composition and of the pattern of trade flows. Later chapters will describe the changes that were already occurring in the 1990s, which could be precursors of further, possibly even more far-reaching, developments in the early decades of the twenty-first century. The grouping of countries for the purposes of this book is shown in the accompanying world map.

5

World map showing grouping of countries into the seven regions used in the book.

INTRODUCTION

6

CHAPTER

1 Historical perspective

Early history

I

n Chapter 6 of the Book of Genesis, God gives instructions to Noah on the building of the ark, in which Noah and his family and the pairs of animals would survive the great flood.The authors of Genesis were clearly aware of the merits of wood, cedar according to one translation, gopherwood according to another, as a construction material strong and durable enough to withstand the rigours of the flood.The use of wood by man is as old as man himself, first as a fuel for keeping himself warm and for cooking, then for shelter and as hunting and fighting implements, and later as agricultural tools and ships. Our story should rightly begin, however, hundreds of millions of years before the appearance of man. During the Carboniferous period, around 345 million years ago, there evolved the great forests of giant clubmosses and fern-like plants from which the fossil fuels were produced that are so essential to modern society (Table 1.1). These gave way over the Permian, Triassic and Jurassic periods to coniferous and similar species (Gymnosperms), followed later in the Cretaceous period beginning around 136 million years ago by the broad leaved species (Angiosperms). Forests became the predominant terrestrial ecosystem on the planet, possibly covering as much as 80% of the land surface other than the poles. Subsequent evolutionary developments had little impact on that 7

THE INTERN ATION AL TIMBER TRADE Table 1.1 present

Evolution of tree-like vegetation from the Carboniferous period to the

Period

Million years from present

Pliocene Miocene Oligocene Eocene Cretaceous

7 26 38 64 136

Jurassic

190

Triassic

225

Permian

280

Carboniferous

345

Main vegetative development Temperate trees in the north Grasslands increased at the expense of forests Tropical trees at high altitudes Temperate and tropical forests widespread Development and spread of Angiosperms (broadleaved species) throughout the world Cycads, ferns and conifers were more developed than in the Triassic period Gingkos, cycads and conifers with palm-like leaves began to develop Marked development of new coniferous trees and extinction of old Carboniferous ones Rich coal-measure flora of the giant clubmosses and fern-like plants

predominance until the emergence of hominids approximately 8 million years ago, a recent development in geological terms. The appearance of the present human species, Homo sapiens sapiens, was an even more recent development, a mere 100 000 years ago or so. The most recent Ice Age, starting some 75 000 years ago and ending only 10 000 years ago, had a profound effect on the distribution of plant and animal life, particularly in the northern hemisphere. First there was a retreat southwards towards the equator ahead of the advancing ice sheets, followed by recolonisation northwards. The spread of Homo sapiens sapiens from its origins in Africa to other parts of the globe followed the retreat of the ice. Often this was aided by the existence of temporary land bridges caused by the lowering of sea levels while huge quantities of water were still frozen in the ice sheets. Initially, man followed a nomadic hunter-gatherer existence, and it was not until perhaps some 8000 years ago that he began to lead a more settled life of growing crops and herding cattle. As populations rose, they needed more and more land for agriculture, and thus began the long decline in the area of forest as it was burned and cleared.

Beginnings of deforestation A combination of rising population and economic and technical advancement resulted in a progressive encroachment on forest land, fuelled not only 8

HISTORIC AL PERSPECTIVE

by demand for land itself but increasingly for wood. As the use of stone and bone for implements in the Paleolithic and Neolithic periods gave way to that of metals in the Bronze Age and Iron Age, and nomadic huntinggathering to farming settlements and the beginnings of urbanisation, the importance of wood as an industrial energy source and building material became increasingly apparent. Large quantities were needed in copper- and tin-smelting and later in iron-making, not to mention gold and silver refining, primitive forms of industrial processing. As industrialisation moved ahead, more and more wood was used in these processes and others, such as the drying of salt and brick-, pottery- and glass-making. Wood was also an essential material in construction and virtually the only material for shipbuilding until it was replaced by iron in the mid-nineteenth century. It was also still the principal source of energy for heating and cooking. Little wonder then that in areas where civilisation was most advanced, such as the Mediterranean Basin and parts of continental Asia, the forests were overexploited and began to disappear. This trend in the degradation and removal of forests spread to other areas as populations continued to increase and civilisation progressed, first to western and central Europe, later to North America and western Russia, and more recently still to the tropical parts of Africa, Asia and Latin America. Loss of forest cover is not always a one-way process. When the Black Death struck Europe in the mid-fourteenth century, widespread rural depopulation was followed by a marked recovery in the area of forest on land previously cleared for agriculture. This trend was reversed a century or two later as populations recovered. Another reason for the restoration of forests, for example in the eastern part of the United States, was the opening up of new areas for large-scale agriculture west of the Mississippi, coupled with steadily rising productivity in agricultural output, which resulted in the abandonment of older farms in the eastern seaboard states and their natural recolonisation by trees. The broadleaved forests of the eastern United States are the outcome of this development. In the tropical regions, deforestation is still continuing today at an unacceptably rapid rate, but elsewhere, in general, it has been stopped and even reversed. In Europe, the turning point came at different times in different countries, early in the nineteenth century in France, not until a hundred years later in the United Kingdom. In both countries the extent of forest cover today is about double what it was at its lowest point. To some extent the reversal in the loss of forests was fortuitous: it coincided with the replacement of wood and charcoal as combustible substances by fossil fuels and as ship-building material by iron and steel, both important factors reducing the pressure on forests. From the eighteenth century onwards, there was a growing realisation of the possibilities of managing forests on a sustainable basis to provide a 9

THE INTERN ATION AL TIMBER TRADE

continuing supply of raw material as well as other benefits. One consequence was the development of forestry as a profession and science – although some might argue that forestry is more of an art than a science. Be that as it may, the application of sound forestry principles and the introduction of policies to conserve and, where appropriate, extend forests has had beneficial results in Europe and in other parts of the world.

Development of trade in wood products Whereas it is possible to trace reasonably well the changes in the forest resource in most regions over past centuries, even millennia, those in the international trade of wood products are less well documented. Quite a lot is also known about the use of wood in early historic times, especially in ship-building. The strategic importance of wood as the prime material for this process, and the efforts made by maritime powers to ensure adequate supplies, is a recurrent theme in the literature covering the earliest times right through to the mid-nineteenth century, when wood gave way to iron in naval construction. Many wars have been waged to protect or gain access to suitably forested areas and to protect supply routes. At the same time, war itself has been one of the main factors contributing to the loss of forests.

The Mediterranean basin Among the earliest records of trade in wood, there were various reports of it being shipped from sources in what are now Crete, Cyprus, Lebanon, Syria, Turkey and Greece to Egypt during the period of the great Egyptian dynasties from around 3000 BC onwards, even though there is evidence that there were still quite extensive forests in Egypt at that time (Thirgood 1981). Other major civilisations in the eastern Mediterranean, such as in Greek classical times, saw the creation of city states with heavy demand for fuelwood and construction materials, as well as for food, which had to be produced on land cleared of trees. Little thought was given to the conservation of the forest, and gradually throughout the region, previously well-stocked forest gave way to agriculture and even to wasteland or desertification. There is a theory that the power of civilisations began to wane with the exhaustion of their forests. The Roman Empire, or more specifically Rome, from the time it supplanted Athens until its decline in the middle of the first millennium AD, had to extend its search for wood to North Africa, which was still well-wooded, the Iberian Peninsula and Gaul (France), having exhausted the forests within 10

HISTORIC AL PERSPECTIVE

oxcart distance of the city. Forests in the Iberian Peninsula became badly depleted from the use of wood in silver smelting. The demand for fuelwood from the metal industries was an important factor in deforestation from the times of the Bronze Age, for instance in Cyprus, to iron production over many centuries in several parts of Europe, including Gaul, England and Sweden, and later in North America (Perlin 1989). Glass-making and potteries were other industries that required large quantities of wood, but overall it was probably iron production that had the greatest impact on the forests in Europe, apart, that is, from the ubiquitous clearance of forested land for agriculture, in which monasteries played an active part in many countries during the Middle Ages.

Northern Europe In northern Europe, wood was exported from the thirteenth century onwards from Norway to Britain; for example Henry III of England bought 3000 boards from Norway in 1253 for the panelling of Windsor Castle (Ahvenainen 1994). In the next century wood was, after dried fish, the most important Norwegian export to England. The Netherlands and other western European countries, notably France, began importing wood, mostly from Norway, Denmark, the estuaries of the coast of north-west Germany and the big rivers such as the Rhine and Maas. Danish oak was exported to Burgundy and Flanders until the fifteenth century. Exports from the Baltic were initially from the southern coast, what is now Poland and Germany, with Danzig and Königsberg the leading export ports. Members of the Hanseatic League became the primary dealers in the long-distance trading of wood products in the Baltic and North Seas at the end of the thirteenth century. Besides wood, other products exported were tar, pitch and birch ash, tar and pitch being essential in building and maintaining ships. The influence of the Dutch in commercial activities became very strong from the end of the fourteenth century until early in the fifteenth, creating strong competition with the Hanseatics. Dutch traders sold salt, wine and other goods and brought back wood and other materials for destinations as far as the west coasts of France and of Portugal. Growing demand for construction timber and the nascent interest in ocean navigation, with at the same time increasing shortages of wood in parts of western Europe, led to continuing expansion of exports from the Baltic, interrupted from time to time by war or depopulation, such as during the time of the Black Death. Early in the seventeenth century the acquisition of wood in the Baltic began to shift northwards and eastwards, as availabilities in the southern areas declined. For a while Riga was the largest exporting port, while 11

THE INTERN ATION AL TIMBER TRADE

Swedish wood exports began to build up. Finland became the largest exporter of tar, but was overtaken by Sweden in the eighteenth century. Improved sawmilling technology was introduced into Sweden and elsewhere in the Baltic from the Netherlands during the seventeenth century, although sawmills continued to be powered by water (or wind in the Netherlands) until the advent of steam in the nineteenth century. The eighteenth century was a period of expansion of trade from the Nordic countries, despite some growing concerns about possible resource depletion and growing competition from Russia, both through the Baltic and by way of the Arctic Ocean. Until the mid-1700s the Netherlands was the largest purchaser of wood from the Baltic, but was overtaken by Britain. France, Spain and Portugal also became sizeable purchasers.

European exploration and colonisation Europeans, led by the Spanish and Portuguese and followed by the Dutch, French and English, pushed their explorations southwards during the fifteenth century down the west coast of Africa, round the Cape of Good Hope in the Indian Ocean (Diaz in 1487) and across the Atlantic to discover the New World (Columbus in 1492). This opening up of the seaways not only stimulated the building of more and larger ships, with ever-increasing demand for wood, but also saw the build-up of commodity trading, notably spices from the Indian Ocean, gold and silver from the New World. The explorers also discovered new and exotic woods, mahogany and rosewood from the Caribbean and central America, ebony, teak and sandalwood from India, which were brought back to Europe for use in cabinet-making and furniture. Colonisation saw the clearing of forests to make way for cash crops, in particular sugar, for instance in Madeira (called the island of forest by the Portuguese when they first arrived) and the Caribbean and West Indian islands, while the processing of sugar required large quantities of fuelwood. The result was the denuding of these islands to such an extent that by the seventeenth century a flourishing wood trade had been established from New England to Barbados, Madeira and the Canary Isles, to augment the trade already taking place with England, Portugal and Spain (Perlin 1989). In exchange, molasses, sugar and rum were shipped back to Boston and other New England ports. In parenthesis, it may be noted that the establishment of extensive sugar plantations in the West Indies was accompanied by the development of the slave trade from west Africa and all the human suffering which that involved, the early settlers in the West Indies having wiped out practically all the native populations.

12

HISTORIC AL PERSPECTIVE

Eastern North America The first colonists on the eastern coast of North America in the late sixteenth and early seventeenth centuries (the Pilgrim Fathers’ Mayflower landed in 1620) found a thickly wooded landscape, rich in oak, which was identified as suitable for staves for wine casks, among other things. Within a few decades many sawmills were in operation, producing sawnwood for local use in construction and ship-building, as well as for export. Another key export, notably from Maine, was of ship’s masts to England, essential to keep the Royal Navy operational in time of war, especially when England’s access to timber from the Baltic was blockaded. Besides, the white pines of Maine provided masts of the lengths required by the large English ‘ships of the line’, which were not available from Scandinavia. The stripping of the eastern seaboard forests had begun, a major source of friction between the settlers and the native Indian population and one of the causes of the Indian wars. Trade from the eastern seaboard continued after the American Declaration of Independence (1776), but English interests moved northwards to what is now Canada, which became an important source of wood during the Napoleonic Wars, which again blocked supplies from the Baltic area. In order to encourage secure supplies from North America, Britain doubled import duties on wood from northern Europe, while imports from its colonies were duty free and from America attracted only a low duty (Mather 1990). Meanwhile, forest clearance and logging were expanding dramatically in the American mid-west and Lake States to meet burgeoning demand from a fast-expanding and spreading population, rather than for export. Huge quantities of wood were used for agricultural fencing and, with the advent of railways, for ties (railway sleepers) and even rails and rolling stock. Initially, they also used wood for fuel, as did the steamboats which provided the main transportation on the Mississippi River system. Fortunately for the survival of the forests, coal was found to be a more efficient source of energy than wood for steam generation and other uses. Railways were not only heavy users of wood, they also made it possible to gain access to large areas of hitherto inaccessible forest, not only in the USA but in other parts of the world as well. They thus played an important role in the deforestation of large areas of forest, especially in the USA. The conversion of sawmills to steam power was also important in increasing productivity and output greatly.

The Pacific Basin With the establishment of settlements on the west coast of the USA early in the nineteenth century, new opportunities for wood production and exports

13

THE INTERN ATION AL TIMBER TRADE

from the north-western states arose. Apart from supplying the needs of the rapidly growing cities of California, especially San Francisco during the Gold Rush (1848), exporters in Oregon and Washington found new markets around the Pacific Rim, such as Australia, China, Japan, Peru, Mexico and Hawaii. It was not until some time after this (late nineteenth century) that British Columbia entered the scene, although the export of wood to England goes back to Cook’s voyage of discovery at the end of the eighteenth century. He refurbished his ships’ masts and spars with Douglas fir from Vancouver Island (R. H. Edgett, private communication). An important development for exporters in the American north-west and British Columbia was the opening of the Panama Canal in 1914, which greatly improved their access to markets in eastern North America as well as in Europe (MacKay 1982).

The industrial revolution The industrial revolution was accompanied by a marked expansion of trade in wood, with Britain emerging as the leading importer in the nineteenth century and, with British tariffs having been lowered again, Scandinavia was re-established as its main supplier. By the end of the nineteenth century, Sweden’s exports of sawn softwood reached about 5 million m3 (85% of its production) out of a total world trade volume of about 20 million (Wohlfart (ed). 1971) Another major development of the nineteenth century was the invention of mechanised paper production (Bolton 1998). While the Egyptians were writing on papyrus 3000 years BC and the Chinese invented papermaking from fibres around AD 100, the process was still artisanal at the time of the Renaissance, and output per mill was a few hundred tonnes a year. This type of paper-making by hand had become widespread in Europe from the time of the invention of the printing press in the fifteenth century (Gutenberg c. 1430). The first paper machine went into production in 1800 with a capacity of maybe 1000 tonnes a year. Technological development has led to an enormous increase in output per unit to as much as a quarter of a million tonnes annually from a modern machine. The key to this expansion was the use of wood as raw material in place of rags and other fibres. In Sweden, for example, there were about 110 paper mills in 1800 based on textile waste for hand-made paper. As far as the number of units was concerned, the pulp industry reached its maximum just before the First World War, since when many of the smaller mills have closed down. There were 67 papermills in Sweden at the beginning of the twentieth century and the number has remained more or less unchanged since, although the capacity has expanded dramatically and has been accompanied by tremendous growth in exports. Broadly similar stories can be told of 14

HISTORIC AL PERSPECTIVE

developments in other major exporting countries, such as Canada and Finland. The global economy and international trade in the second half of the twentieth century evolved in a quite different way than during the first half. Growth in the first half was sharply reversed by the First World War, then by the Great Depression and again by the Second World War. Trade in that halfcentury was still very largely between the industrialised countries. In the second half of the century the world economy suffered no major upsets, and expansion was more or less continuous, apart from cyclical fluctuations of the market, triggered on two occasions by oil price shocks. While the major part of the trade in wood products continued to be between industrialised countries, the share of developing countries gradually increased, as will be described in later chapters. This brief history of the development of trade in wood products has had to be anecdotal in nature, due to the relative lack of statistics compared with those of modern times. What emerges, however, is the consistency with which over millennia the forests have been plundered and destroyed wherever they have stood in the way of man’s ‘progress’ or have been felled for the provision of his immediate wood requirements and without thought for the future. Apart from a few voices ‘crying in the wilderness’, the relentless exploitation and clearance of the forest took place with little regard for conservation or sustainability, at least until the damage was done and it was too late to alter the situation to any large degree. What is still happening to forests in some parts of the tropical and boreal world is not much different from what occurred in the past in the temperate regions. And now, as in the past, it is difficult to assess how important the role of trade is, and was, in deforestation. How responsible, for example, was the demand for wood in ancient Egypt for the destruction of the forests of Crete and Lebanon? Or the Roman Empire for deforestation in North Africa and the Iberian Peninsula? Or the English for the clearance of the forests in eastern North America in the seventeenth and eighteenth centuries? Or Japan and western Europe for tropical deforestation in the second half of the twentieth century? A short answer is that forest destruction would probably have occurred in each case, even in the absence of overseas demand for wood, but trade was still a factor. In the past, as today, the clearance of forest land, especially for agriculture, coupled with local demand for wood for fuel and other uses, was in most cases the primary cause. As will be seen in later chapters, some lessons do seem to have been learnt from the past, and greater care is being taken to manage forest resources for their long-term sustainability in many parts of the world. Among other things, this could already be having an impact on the composition and pattern of international trade in wood products.

15

CHAPTER

2 Global forest and wood resources

Principal forest types and their distribution

C

limate has had a preponderant role in determining the distribution and composition of the world’s forests. To oversimplify the situation grossly, three broad categories can be distinguished: the tropical forests, consisting very largely of broadleaved species (Angiosperms) lying between the Tropics of Cancer and Capricorn; the boreal forests, predominantly coniferous (Gymnosperms) lying mostly to the north of latitude 60°N; and the temperate forests in between. Things are not quite that simple, however.

The tropical forests The tropical forests form a discontinuous belt on either side of the equator across Latin America, Africa and Asia. The farthest north that these forests are found is in southern China and Mexico; the farthest south in northern Argentina and Chile, Madagascar and northern Australia. They follow a vegetation gradient determined by rainfall from the moist evergreen tropical rainforests, where precipitation exceeds 2000 mm a year, to dry wooded savannah, and from cloud forests at higher elevations to the mangrove 16

GLOB AL FOREST AND WOOD RESOURCES

swamps along the coasts. The moist tropical rainforest is virtually nonseasonal, which means that as an entity it is evergreen, although some species may shed their leaves at certain times, while flowering and seeding follow a certain seasonal rhythm generally related to the rainy periods. It has as many as five storeys dominated by scattered emergent trees which, when of the sought-after species, are the principal target of commercial exploitation. It is impossible to list the number of tree species in tropical forests, which run into the thousands: there can be hundreds in a single square kilometre. A limited number of them have been commercialised. To mention a few that are exported from West Africa: obeche or wawa (Triplochiton scleroxylon), okoumé (Aucomea klaineana), African mahogany (Khaya ivoriensis), sapele (Entandrophragma cylindricum), utile (Entandrophragma utile), niangon (Tarrietia utilis), iroko (Chlorophora excelsa) and afrormosia (Afrormosia elata). In South-east Asia, the predominating family of trees is the Dipterocarps (Dipterocarpaceae), with several genera and numerous species: among the better known in the trade are the merantis, serayas, lauans, keruing, yang and apitong. Other families include ramin (Gonystylus bancanus), jelutong (Dyera costulata), and a native of Myanmar (Burma) and Thailand but now growing in plantations in many countries, teak (Tectona grandis). In Latin America there is the increasingly scarce ‘true’ mahogany (Swietenia mahogoni), and among other commercial species, lignum vitae (Guaiacum officinale), balsa, the softest and lightest of commercial woods (Ochroma lagopus), greenheart (Ocotea rodiaei), which was used to build the hull of Captain Scott’s Discovery, virola (Virola koschnyi) and Brazilian rosewood (Dalbergia nigra) (Willis 1968). The variety of characteristics found among tropical woods is astounding, yet until relatively recently the number of species being harvested and exported in commercial volumes was small in comparison with the great number growing in tropical forests. The heterogeneity of species as well as of sizes and the complexity of the tropical rainforest system are both a strength and a weakness. A strength, because when left in its natural state, the rainforest is a gene bank of immense reserves and diversity, not only of tree species but of those of every type of flora and fauna. A weakness, because once disturbed by shifting cultivation, commercial exploitation or other forms of interference, some of the links in the chain of interdependency of the species in the ecosystem are broken, and in many cases the process of degradation may become irreversible. A further weakness, which may not become apparent until the tropical rainforest ecosystem is disturbed, is the low nutrient-holding capacity of the soil. Under normal conditions, nutrients in the litter layer are quickly broken down and recycled, and there is little chance for the nutrients to be leached out of the soil by heavy rainfall. Tropical forest cleared for farm crops or grazing loses its fertility within two or three years, however, and the stage 17

THE INTERN ATION AL TIMBER TRADE

is then set for the deterioration process leading to erosion and eventual desertification. Despite its lushness, therefore, the tropical rainforest is a fragile ecosystem. Other special types of forests in the hotter climates are the moist deciduous forests, where rainfall is lower and more seasonal than in the rainforest areas; and montane forests, including the cloud forests at certain elevations and topographical conditions. There are also the mangrove swamps along tens of thousands of kilometres of coast and forests of bamboo which, although of the grass family, may grow to 30 metres in height.

The boreal forests Roughly three-quarters of all coniferous forests are found in the northern coniferous belt, which is synonymous with the boreal forest area that lies in the northern hemisphere between the tundra to the north and the temperate forests to the south. The belt stretches across Alaska and Canada, northern Europe and the northern two-thirds of the former USSR. While the forests covering this enormous area are reasonably similar in structure, the tree species differ. In northern Europe and the north-western part of the former USSR, Norway spruce (Picea excelsa) and Scots pine (Pinus sylvestris) predominate, with a broadleaved species, birch (Betula spp.) also common. Further east across Siberia, this association is replaced by larches (Larix spp.), Siberian fir (Abies sibirica) and Siberian pine (P. cembra, var. sibirica). In northern North America, the species to the west include lodgepole pine (P. contorta), sub-alpine fir (A. lasiocarpa), and black spruce (P. mariana), giving way eastwards to larches, white spruce (P. glauca), balsam fir (A. balsamea) and jack pine (P. banksiana). The coniferous montane forests are a feature of the great mountain ranges: the Rockies, Cascades and Sierra Nevada in North America, the Alps and Carpathians in Europe, the Himalayas, Caucasus and Hindu Kush in Asia, and the Andes in South America. The number of tree species in these forests may be considerable, although only a fraction of the number found in tropical forests. The diversity is greatest in North America, partly because the mountain ranges run north to south so that latitude as well as elevation has an influence on the naturally occurring species. To name a few of the major species in these North American forests: Douglas fir (Pseudotsuga menziesii), lodgepole pine, Western white pine (P. monticola), Engelmann spruce (P. engelmannii), ponderosa pine (P. ponderosa), Western red cedar (Thuya plicata) and Western larch (Larix occidentalis). This is also the region of the giant coastal redwoods and sequoias (Sequoia sempervirens and S. gigantea), although the former is restricted in its natural state to the lower-lying areas of California. These montane forests combine to a high 18

GLOB AL FOREST AND WOOD RESOURCES

degree the potential to provide the multiple functions of the forest: wood production, soil and water protection, recreation and other social and environmental services. Two other types of coniferous forest should be mentioned: the lowland pine forests, which are found in both temperate and tropical zones; and the southern hemisphere conifers, including species of the genera Agathis, Araucaria and Podocarpus, which are scattered, sometimes as forest remnants, over a range of latitudes from Japan and China to Chile and New Zealand. In addition to the natural stands of pine, for example in the southeastern United States, plantations of coniferous species, of indigenous or exotic origin, are playing an increasingly important role in the international supply of wood and fibre. Radiata pine (P. radiata) in New Zealand and Chile and maritime pine (P. pinaster) along the seaboards of Portugal, northern Spain and south-west France, are just two examples.

The temperate forests Between the northern boreal and the tropical forests, and also in the southerly latitudes, lie the temperate forests. Some of them, as just mentioned, are predominantly coniferous, usually pine, but the largest areas are either mixed coniferous and broadleaved or predominantly broadleaved. These are, over most of the northern temperate area, deciduous species, such as oak (Quercus spp.), beech (Fagus spp.), maple (Acer spp.), poplar (Populus spp.), ash (Fraxinus spp.) and hickory (Carya spp.), but in drier, hotter areas, such as the Mediterranean basin, there are evergreens, for instance the holm and cork oak and olive.The main areas of temperate forests are in central and western Europe, eastern North America, eastern Asia and the southern parts of the former USSR. There are also extensive areas of temperate forests in western South America, South Africa, Australia – where the eucalyptus family of 600 or so species (Eucalyptus spp.) predominates – and New Zealand. A contrast between the northern and southern hemisphere forests is that the latter are for the larger part evergreen, despite similarities with the climatic conditions under which the deciduous forests grow to the north. The above brief description relates to a considerable extent to the natural distribution of forests without taking into account the impact of man on them. As was seen in Chapter 1, however, man’s influence has been increasing for several millennia, with the consequence that the extent of forest cover as well as the type of forest has altered, sometimes drastically. An example of this was the progressive clearance of forest over large areas of eastern North America to make way for farming and settlement in the 19

THE INTERN ATION AL TIMBER TRADE

seventeenth and first part of the eighteenth century, which was followed by recolonisation by broadleaved species of much of the area as the centre of agricultural production moved westwards into the prairies. Where man has ‘interfered’ with but not permanently removed the forest, it has reverted to an earlier stage of succession or, by means of silviculture, has been kept at that stage. Examples are the natural regeneration of alder, aspen and birch after the felling of the coniferous boreal forest in the former USSR; the maintenance of a high proportion of spruce in what would probably be beech and fir forests in central Europe; the replacement of natural tropical forest by plantations of pine, eucalyptus and other fast-growing species, for example in Brazil and Indonesia; and the replacement of some of the natural temperate forests in Chile and New Zealand by radiata pine and other exotic species.

Extent and composition of the world’s forests Today, the area of forests in the world is about 3.6 billion ha or 28% of the land area (Table 2.1). The definition of forest is land on which trees capable of growing to a height of 5 metres or more cover more than 10% of the land surface (UN-ECE/FAO 2000). In addition there are substantial areas of socalled other wooded land, which is either land with scattered trees of 5 metres or more (5 to 10% crown cover) or with more than 10% crown cover of smaller trees (less than 5 metres in height) together with shrubs and bushes. Data on the world area of other wooded land are lacking, although the area in the industrialised countries amounts to about 800 million ha, to which can be added large areas in the developing countries. The world area of forest and other wooded land is estimated to amount to between 4.5 and 5.5 billion ha, roughly two-fifths of the total land area. This is very much less than the area before human intervention began, when perhaps twice as much of the land area was covered with trees. Latin America and the former USSR (two of the regional groups) each account for about one-quarter of the world’s forest area with 950 and 863 million ha respectively; and three others, Africa, Other Asia-Pacific and North America, for between one-seventh and one-eighth each; Europe and East Asia have less than one-twentieth each (Fig. 2.1). Latin America and the former USSR are also the regions with the highest proportions of forest cover, with 47 and 40% respectively. East Asia, Other Asia-Pacific and Africa have the lowest forest cover, with 17, 21 and 18% respectively. In East Asia, there is only 0.1 ha of forest per inhabitant, and in Europe and Other Asia-Pacific this indicator is also well below the world average of 0.6 ha/inhabitant. The former USSR has 5 times the world average 20

21

482

Latin America

Sources: FAO 1997 and 1999; UN-ECE/FAO 2000

728

Africa

Former USSR

1948

292

Europe

Other Asia-Pacific

593

North America

1399

305

WORLD

East Asia

5746

Region

2 017

2 937

2 448

979

2 151

549

1 837

12 918

Land area (million ha)

4.2

4.0

1.3

0.7

7.4

0.9

6.0

2.3

Population density (ha/person)

950

520

506

165

863

169

462

3634

Total forest area (million ha)

World and regional totals of population and of land and forest area in the mid-1990s

Population (million)

Table 2.1

47

18

21

17

40

31

25

28

Forest area as per cent of land area (%)

2.0

0.7

0.3

0.1

3.0

0.3

1.5

0.6

Forest area per person (ha/person)

GLOB AL FOREST AND WOOD RESOURCES

THE INTERN ATION AL TIMBER TRADE World forest area: 3.63 billion hectares North America 13%

Europe 5% Former USSR 24%

Latin America 25% East Asia 5%

Other AsiaPacific 14%

Africa 14%

2.1 Regional shares of the world area of forest in the mid-1990s (sources: FAO 1999, UN-ECE/FAO 2000).

with 3 ha/inhabitant, followed by Latin America with 2 and North America with 1.5. The statistics in Table 2.1 are taken from two sources: FAO’s State of the World’s Forests (FAO 1997 and 1999) and UN-ECE/FAO’s Forest Resources of Europe, CIS, North America, Australia, Japan and New Zealand (UNECE/FAO 2000). FAO is currently undertaking a new global forest resources assessment, the results of which will not be available until after this book is completed. The UN-ECE/FAO assessment, which is a component of the FAO global assessment, was published in 2000. Therefore, the data for North America, Europe and the former USSR in Table 2.1 were taken from the UNECE/FAO source, while those for the other regions were extracted from the FAO source, but adjusted to take into account the more recent figures for Japan in the East Asia group and Australia and New Zealand in the Other AsiaPacific group. The information on total forest area does not tell us very much about any of the regions’ potential to supply wood, for which it is necessary to have data at least on such parameters as the area of forest available for wood supply (FAWS), volume of growing stock and annual increment on FAWS. This information is available for the countries covered by the UN-ECE/FAO assessment, which are referred to here as the Temperate and Boreal Developed Countries (TBDCs). These countries account for 46% of the world’s forest area, but 70% of the volume of removals of industrial roundwood in 1996 (Fig. 2.2). They are therefore the principal source of the wood raw 22

GLOB AL FOREST AND WOOD RESOURCES

TBDCs 12.7

North America

39.3 4.7

Europe

19.2 23.7

Former USSR

7.3 5.2 3.9

Other TBDCs

OTHER REGIONS 13.2

Asia-Pacific excl. TBDCs

16.6 14.3

Africa

4.4 26.1

Latin America

9.3 0

10

20

30

40

50

% of world totals Removals of industrial wood

Forest area

2.2 Forest area and removals of industrial wood for temperate and boreal developed countries (TBDCs) and non-TBDCs compared (sources: FAO 1999, UNECE/FAO 2000).

material used for the production of wood products entering international trade. It will be worthwhile, therefore, to look at the forest inventory data for the TBDCs in more detail.

Forests in the temperate and boreal developed countries Both North America and Europe have a much larger share of the world’s removals of industrial roundwood (39 and 19% respectively) than of the area 23

THE INTERN ATION AL TIMBER TRADE

of forest (13 and 5%). On the other hand, the countries of the former USSR, with 24% of the forest area, accounted for only 7% of removals in the mid1990s, although before the break up of the USSR, the percentage had been much higher (17% in 1990). Similarly, Latin America and Africa, with 26 and 14% respectively of the world’s forests, contribute much smaller proportions, 9 and 4% respectively, to global industrial wood supply. It should be noted, however, that these regions, as well as Other Asia-Pacific, are major producers of fuelwood, which makes up more than half the world removals of roundwood but is an insignificant component of international trade. The basic forestry inventory data for the temperate and boreal developed countries in the mid-1990s are shown in Table 2.2. The area of forest and other wooded land in the TBDCs was 2.48 billion ha in the mid-1990s, accounting for 46% of the total land area. Of this area, 1.68 billion ha or just over two-thirds consisted of forest (Table 2.2). Nearly two-thirds or 1.1 billion ha of the area of forest is classified as available for wood supply (FAWS), the proportion being considerably higher in Europe (85%) and lower in the Other TBDCs (22%). The volume of annual fellings in the mid-1990s was of the order of 1.5 billion m3 overbark measure (ob). This is the volume of trees felled on FAWS, whether it is taken from the forest as removals or left in the forest as harvesting residues. Not all fellings occur on FAWS; a proportion, probably less than 10%, are of trees on forest not available for wood supply and on other wooded land and of trees outside the forest. Since the statistics relating to FAWS are generally the most comprehensive and reliable, however, it is easier to compare the fellings on FAWS with other parameters relating to FAWS in order to draw up some kind of a ‘forest balance’. Hence the data in Table 2.2 concentrate on FAWS. Of the various indicators in the table, two of the more significant are the volume of net annual increment (NAI) per hectare on FAWS and the ratio of fellings to NAI. The former is a rough guide to the physical potential to produce wood on a sustainable basis; the latter an indicator of the extent to which that potential is being used. In the TBDCs on average, the NAI on FAWS is about 2.4 m3 ob/ha. It is nearly twice as much in Europe, due partly to favourable growing conditions, partly to the fact that most of the forest is under silvicultural management. In the former USSR, NAI is about 1.5 m3 ob/ha. This low figure can be attributed to the fact that a still large part of the forest is more or less undisturbed by man and most of the gross annual increment is offset by natural losses due to forest fire, pests and diseases and mortality from other causes, including old age. This is also the case in some other countries, notably Canada and Alaska. If these natural forests are ever brought under silvicultural management, the effect would be to reduce natural losses and raise NAI closer to gross annual increment, thereby increasing their wood supply potential. But that remains uncertain, due to pressures to conserve as much of the remaining natural forest as possible for 24

25

Missing data for a few countries have been estimated Volumes are overbark (ob) measure Other TBDCs: Australia, Japan, New Zealand Source: UN-ECE/FAO 2000

Annual fellings on forest Annual fellings on FAWS Annual fellings as per cent of NAI on FAWS • Coniferous annual fellings on FAWS • Broadleaved annual fellings on FAWS

Net annual increment on forest Net annual increment (NAI) on FAWS NAI per hectare of FAWS • Coniferous NAI on FAWS Coniferous as per cent of total NAI on FAWS • Broadleaved NAI on FAWS million million % million million

ob

ob

m3 ob m3 ob

m ob m3 ob

3

million m3 million m3 m3 ob/ha million m3 % million m3 ob ob

million m3 ob million m3 ob m3 ob/ha m3 ob/ha m3 ob/ha

ha ha ha

Growing stock volume on forest Growing stock (GS) on FAWS GS per hectare of FAWS • Coniferous GS on FAWS • Broadleaved GS on FAWS

ha ha

million million % million million million

Unit

1 468.4 1 433.5 56.3 1 021.3 412.2

3 179.9 2 545.7 2.4 1 583.3 62.2 962.4

188 283 134 894 127 90 504 44 390

1 682.4 1 061.3 63.1 522.1 236.7 302.4

Total TBDCs

770.8 770.8 83.6 561.2 209.6

1 203.0 921.5 2.8 544.3 59.1 377.2

59 020 44 390 137 27 647 16 743

461.9 324.0 70.1 152.4 117.6 54.0

North America

435.1 429.6 64.4 295.1 134.5

717.9 667.2 4.7 429.5 64.4 237.7

23 961 21 585 151 13 406 8 179

169.0 143.0 84.7 78.2 46.1 18.7

Europe

191.3 161.8 19.7 111.0 50.8

1 068.0 819.5 1.5 508.3 62.0 311.2

90 632 64 537 117 46 725 17 812

862.6 552.7 64.1 276.8 53.1 222.9

Former USSR

Basic forest inventory data for the temperate and boreal developed countries (TBDCs) in the mid-1990s

Total forest Forest available for wood supply (FAWS) FAWS as per cent of total forest • Predominantly coniferous FAWS • Predominantly broadleaved FAWS • Mixed conif. & b’leaved FAWS

Table 2.2

71.3 71.3 51.9 54.0 17.3

191.0 137.5 3.3 101.2 73.6 36.3

14 670 4 382 105 2 726 1 656

188.9 41.6 22.0 14.7 20.0 6.8

Other TBDCs

GLOB AL FOREST AND WOOD RESOURCES

THE INTERN ATION AL TIMBER TRADE

environmental and biodiversity reasons, not to mention problems of inaccessibility. Nevertheless, present NAI on FAWS in the TBDCs of about 2.5 billion m3 ob compares with fellings of 1.4 billion, giving a fellings-to-NAI ratio of 56%. Fellings are less than NAI in each of the 4 regions, markedly so in the case of the former USSR, where the ratio is 20%, although it was at least twice that before fellings slumped in the early 1990s. The ratio of 84% in North America is somewhat suspect, since Canada cannot provide fellings data (see Table 2.3), and the ratio is based on estimates and in reality may be higher or lower than 84%. What seems more than likely, however, is that fellings on FAWS are closer to NAI in North America than in the other regions, suggesting there is less scope there for achieving higher fellings without jeopardising the principle of sustainability of wood supply. As may be seen in Table 2.3, the forest situation varies greatly from country to country, depending on growing conditions and intensity of management. Public ownership ranges from 100%, for example in formerly centrally planned economy countries such as the Russian Federation, to 20% or less in Sweden and Austria. The volume of growing stock ranges from 250 m3 ob/ha or more in central Europe to less than 100 m3 ob/ha in some northern and southern European countries with harsher growing conditions, as well as in Australia. Most TBDCs grow more coniferous wood than broadleaved, but exceptions among the leading countries include France, Romania and Australia. Net growth rates also vary markedly, with average NAIs of more than 8 m3 ob/ha in some central European countries and less than 3 in parts of southern Europe and Australia. Within the same country, NAI can vary tremendously between forest stands: for example in New Zealand NAI in the very intensively managed coniferous (mainly Radiata pine) plantations averages 18.2 m3 ob/ha, while in its natural, predominantly broadleaved, forests it is probably close to zero. The fellings-to-NAI ratio is a fairly crude indicator of the extent to which wood supply potential is being exploited, and needs to be taken together with knowledge about the age–class distribution of the forests. In those with predominantly immature stands, such as Spain, as well as Ireland and the United Kingdom (not shown in Table 2.3), it is natural that NAI should be appreciably higher than fellings. Where a large part of the forest is old growth or natural, fellings could under certain circumstances be as high as or even higher than NAI without jeopardising long-term supply sustainability, provided of course that those forests are brought or kept under proper management after felling. Forests according to degree of ‘naturalness’ It was mentioned earlier that in many parts of the world the original forests have either been removed to make way for agriculture or other uses of the 26

27

21.2 20.7 14.5 10.5 10.1 8.6 8.3 5.6 3.4

525.2

23.3 16.4

Europe Sweden Finland France Spain Germany Turkey Poland Romania Austria

Former USSR Russian Federation

Other TBDCs Japan Australia 97 11

59

78 95 96 78 94 87 93 89 87

91 52

Per cent of total forest (%)

42 80

100

20 30 25 22 54 100 83 95 18

45 93

Per cent publicly owned (%)

‘Publicly owned’ includes owned by indigenous and tribal peoples e = estimate Canada: fellings data not available Source: UN-ECE/FAO 2000

198.1 125.9

Area of FAWS (million ha)

3 368 645

60 922

2 567 1 867 2 836 487 2 820 1 187 1 771 1 194e 1 037

27 035 17 355

Growing stock (GS) on FAWS (million m3 ob)

145 39

116

121 90 196 47 278 138 213 213e 310

137 138

GS/ha (m3 ob/ha)

66e 20

73

85 82 36 59 69 65 79 37e 82

55 74

Per cent of coniferous in GS (%)

69.2 34.6

742.0

85.4 72.5 92.3 28.6 89.0 32.5 39.4 28.5e 27.3

694.0 227.5

Net annual increment (NAI) on GS (million m3 ob)

3.0 2.1

1.4

4.0 3.5 6.4 2.7 8.8 3.8 4.8 5.1e 8.2

3.5 1.8

NAI/ha (m3 ob/ha)

42 57

17

77 75 65 39 55 53 77 48e 71

75 ..

Fellings to NAI ratio (%)

Basic inventory data on forest available for wood supply (FAWS) in leading temperate and boreal developed countries in the mid-1990s

North America USA Canada

Table 2.3

THE INTERN ATION AL TIMBER TRADE North America Europe Former USSR Australia, Japan, New Zealand 0

10

20

30

40 50 60 % of forest area

Undisturbed by man

Semi-natural

70

80

90

100

Plantations

2.3 Forest according to degree of ‘naturalness’ in TBDCs (sources: UN-ECE/FAO 2000).

land or have been altered in some way by man. According to estimates by experts in the temperate and boreal developed countries, 925 million ha or rather more than half of the remaining forest area in those countries can still be described as ‘undisturbed by man’ (Fig. 2.3). Forest ‘undisturbed by man’ should show natural forest dynamics, such as natural tree composition, natural age structure and natural regeneration processes. There should have been no known human intervention, or the last significant intervention should have been long enough ago to have allowed natural species composition and processes to have become re-established. In practice it is sometimes not easy to apply such a definition, and the percentages in Fig. 2.3 should be treated with caution. Nevertheless, it is certainly the case that relatively little of the forest area in Europe remains undisturbed, in contrast to the former USSR, where 87% of it is estimated to be still in that category. At the other end of the spectrum are forest ‘plantations’, defined as stands established by planting or seeding in the process of afforestation or reforestation. They consist either of introduced species or of intensively managed stands of indigenous species. It is estimated that there were about 62 million ha of plantations in the TBDCs in total in the mid-1990s, fairly well distributed between the 4 regions shown in Fig. 2.3. The remaining area of just under 700 million ha or two-fifths of the total is termed ‘semi-natural forest’. Most of this was once undisturbed natural forest that has been used or in some way treated by man. Some may have started as plantations which, with approaching maturity, lost its plantation ‘look’ of uniformity. Within Europe’s forests 89% fall into the category of semi-natural and 66% of North America’s (49% in Canada and 85% in the USA).

28

GLOB AL FOREST AND WOOD RESOURCES

Although the breakdown is not available, it may be assumed that much, perhaps two-thirds, of the forest undisturbed by man falls into the category of forest not available for wood supply, and most plantations and semi-natural forest into that of forest available for wood supply. Pressure has been increasing to protect a substantial proportion of undisturbed forest from commercial exploitation for reasons of environmental conservation and even to allow some semi-natural forest to revert to a more natural state. Over the long term wood production may in consequence tend to be concentrated more on plantations and semi-natural forest, which would nevertheless be managed according to the principles of sustainability.

Forests in the developing regions Until FAO’s global forest assessment 2000 is published, information about the current forestry situation in the developing regions is scanty or out of date. Forests in those regions amount to 1.95 billion ha or about 54% of the world’s forest area. Nearly half of that is in Latin America; the remainder more or less equally divided between Africa and non-TBDCs in the Asia-Pacific region (Fig. 2.2). Their share of world industrial roundwood removals is only 30% but 90% of fuelwood, which accounted for 78% of total roundwood removals in the non-TBDCs in 1996. Brazil, with 551 million ha, has the largest area of forest after the Russian Federation. Three other developing countries, China, Indonesia and Congo Democratic Republic each have more than 100 million ha, and there are 4 others, Peru, India, Mexico and Colombia, with more than 50 million (Table 2.4). The highest forest cover is reported by Guyana and Surinam with 94% and Papua New Guinea with 82%, while 6 other countries, South Korea, Gabon, Brazil, Indonesia, Peru and Colombia have more than 50%. Of the countries shown in the table, South Africa, China, South Korea, Argentina and Chile mostly have temperate forests, the others tropical. The area of forest per inhabitant varies greatly from virtually zero in India, China and the Philippines to 35 ha/capita in Surinam, the highest in the world, 22 in Guyana and 14 in Gabon. The areas of natural forest shown in the table probably include all forest that was defined for the developed countries as undisturbed by man as well as most of the semi-natural forest. The difference between the total forest area and natural forest area is small for the majority of the developing countries shown and no doubt consists mainly of plantations. The countries where the difference is large include those having extensive plantations: South Africa, China, Indonesia, India, South Korea, Brazil, Argentina and Chile. According to FAO (1999), about two-thirds of the plantation area in developing countries is intended for

29

THE INTERN ATION AL TIMBER TRADE Table 2.4 Basic forest inventory data for leading tropical and temperate developing countries in the mid-1990s

Total forest area (million ha)

Forest area as per cent of land area (%)

Forest area per person (ha/person)

Natural forest (million ha)

Africa Congo Dem. Rep. Tanzania Zambia Central African Rep. Angola Cameroon Congo Gabon Mozambique Madagascar Botswana Nigeria Namibia Ghana South Africa* Côte d’Ivoire

109.2 32.5 31.4 29.9 22.2 19.6 19.5 17.9 16.9 15.1 13.9 13.8 12.4 9.0 8.5 5.5

48.2 36.8 42.2 48.0 17.8 42.0 57.2 69.3 21.5 26.0 24.6 15.1 15.0 39.7 7.0 17.2

2.5 1.1 3.3 9.0 2.0 1.5 7.5 13.5 1.1 1.0 9.4 0.1 8.0 0.5 0.2 0.4

109.2 32.4 31.4 29.9 22.1 19.6 19.5 17.8 16.8 14.9 13.9 13.6 12.4 9.0 7.2 5.4

Asia-Pacific China* Indonesia India Papua New Guinea Myanmar Malaysia South Korea* Philippines

133.3 109.8 65.0 36.9 27.2 15.5 7.6 6.8

14.3 60.6 21.9 81.6 41.3 47.1 77.2 22.7

0.1 0.6 0.0 8.6 0.6 0.8 0.2 0.1

99.5 103.7 50.4 36.9 26.9 15.4 6.2 6.6

Latin America Brazil Peru Mexico Colombia Bolivia Venezuela Argentina* Guyana Surinam Paraguay Ecuador Chile*

551.1 67.6 55.4 53.0 48.3 44.0 33.9 18.6 14.7 11.5 11.1 7.9

65.2 52.8 29 51.0 44.6 49.9 12.4 94.4 94.4 29 40.2 10.5

3.4 2.8 0.6 1.5 6.5 2.0 1.0 22.2 34.8 2.3 1.0 0.6

546.2 67.4 55.3 52.9 48.3 43.7 33.4 18.6 14.7 11.5 11.1 6.9

* Wholly or mainly temperate-zone Source: FAO 1999

30

GLOB AL FOREST AND WOOD RESOURCES

commercial use, i.e. the production of industrial roundwood, the remainder for other uses including fuelwood and soil protection. Key information that is not yet available for the developing countries from the point of view of the potential to supply wood includes the species composition of forests, age–class structure, ownership and management status and availability for wood supply. With regard to species composition, broadleaved species account for the overwhelming part of the total, coniferous being mostly limited to part of the plantation area. Most tropical forests are characterised by the diversity of tree species: often the number of species per hectare can be counted in the hundreds, whereas in the temperate forests it is in the tens, and in boreal forests the number can usually be counted on the fingers of one hand. Given that most tropical forests are natural, they are uneven-aged in structure with several different storeys. In natural forests, mortality is more or less the same as growth, and net annual increment is therefore close to zero. It is not known how much of the forest in the developing countries is available for wood supply. Wherever indigenous peoples are living, they are using the forest for gathering wood, food, medicines and other products, and as long as populations remain small and scattered, their activities do not disturb the equilibrium of the forest ecosystem. Even more intensive forest clearance, for example for shifting cultivation, may be relatively harmless to the ecosystem, provided the period between successive clearances is long enough for the forest to restore itself. Commercial wood exploitation has been taking place in the more readily accessible areas, for example close to waterways and the coast. Large areas remain inaccessible to such exploitation for physical or economic reasons, although population pressure and rising demand for land for agriculture and other purposes is steadily removing the forest cover throughout the developing world.

Changes in forest area over time Estimates of the current rate of deforestation in the tropics vary widely. That of FAO (1999) for the developing countries as a whole, tropical and temperate, is approximately 13 million ha a year (Fig. 2.4). Since it is not easy to distinguish between permanent and temporary forest clearance, or between clearance and forest degradation, the figures of changes in forest area may be a combination of gross and net changes. In the temperate and boreal regions the area of forest has been expanding – or, to be more precise, recovering – slowly in recent decades: in the early 1990s it was estimated to be increasing by more than half a million ha a year. Expansion in North America, Europe, New Zealand and Australia more than offset a decline in the former USSR. In the latter region, however, the 31

THE INTERN ATION AL TIMBER TRADE TBDCs North America Europe Former USSR Australia, Japan, New Zealand

0.6 0.5 –0.5 0.1

OTHER REGIONS Asia-Pacific

–3.5 –3.8

Africa Latin America

–5.7 –7

–6

–5

–4

–3

–2

–1

0

1

Million hectares per year

2.4 Average annual change in forest area in TBDCs and in other regions in the early 1990s (sources: FAO 1999, UN-ECE/FAO 2000).

fall in the area of forest was more than offset by a rise in that of other wooded land. Plantations on non-forest land (afforestation) account for much of the increase in forest area in the TBDCs, although in some areas natural regeneration of abandoned agricultural land has also been taking place. This type of regeneration in the late eighteenth and early nineteenth centuries accounted for the extensive area of predominantly broadleaved forests in the eastern United States.

Ownership and management of the forest resource Ownership of the forest resource falls into two main categories: public and private. There is a third category, ownership by indigenous or tribal peoples, which may become of greater importance in the future as the rights of these peoples become increasingly recognised. Public ownership includes ownership by the State at the national or regional level, for example by the Provinces in Canada, as well as ownership by other public bodies, such as cities, municipalities or communes. Private ownership includes ownership by individuals or families, forest industries and other private bodies, such as private corporations, cooperatives or institutions (religious, educational, pension and investment funds, and so on). In most developed countries there exists a legal or cadastral system which clearly demarcates ownership boundaries. This is seldom the case in developing countries where, except in certain precise cases, for example plantations, there is generally an implicit acceptance that forest land belongs to the State. The State may, however, offer concessions to private corporations for the management and 32

GLOB AL FOREST AND WOOD RESOURCES

exploitation of the resources on that land while retaining ownership of the land itself.

Ownership and management in the temperate and boreal developed countries Information provided by the temperate and boreal developed countries (TBDCs) shows over two-thirds of their forest and other wooded land to be in public ownership, just under one-fifth in private ownership and about four per cent in the ownership of indigenous or tribal peoples. Of more interest from the perspective of wood production is the ownership pattern of forest available for wood supply (FAWS). Table 2.5 shows that in the TBDCs 792 million ha or three-quarters of all FAWS is publicly owned (the relatively small area owned by indigenous or tribal peoples is included in that figure). Virtually all of the 551 million ha of FAWS in the countries of the former USSR is publicly owned, and if these countries are excluded, public ownership in the Other TBDCs amounts to 241 million ha or less than half the total area, and private ownership for more than half. This is the case in each of the regions, Europe, other TBDCs and even North America, despite the fact that in Canada the bulk of FAWS (83%) is publicly owned; the publicly owned share is 27% in the United States. Among the TBDCs Sweden has the highest proportion of FAWS in private ownership with 91%, while it is also very high in other wood-exporting countries such as Austria, Finland, Norway, Portugal and New Zealand, as well as other major forest countries such as France and Spain. The pattern of present-day ownership of forest is the result of historical, political, legal and social events, which explains why in no two countries is it the same. The current trend in several TBDCs, and particularly in the countries of the former USSR and eastern Europe, is towards the privatisation or restitution of publicly owned forest, although in the Russian Federation, with by far the largest forest area, the stated policy is to retain forest under public ownership. In some market economies, such as New Zealand and the United Kingdom, the State has been selling part of its forest estate to private interests. Putting forests under management implies that they are to be altered in some way from their natural state or manipulated to provide particular goods or services, or combinations of them, for the benefit of man. Since forestry began to be applied scientifically two hundred or so years ago, the principal objective of management has been wood production. There was even an implicit assumption that if forests were managed efficiently for wood production, they would automatically fulfil their other functions, namely the provision of various non-wood goods and services, such as wildlife habitats, 33

34

million ha % million ha % million ha %

Managed FAWS, total • As per cent of total FAWS Managed publicly owned FAWS • As per cent of publicly owned FAWS Managed privately owned FAWS • As per cent of privately owned FAWS

927.4 87.4 760.9 96.0 166.4 61.9

792.3 74.7 269.0

Total TBDCs

b

Australia, Japan, New Zealand Including ownership by indigenous or tribal peoples in North America and Other TBDCs Source: UN-ECE/FAO 2000

a

million ha % million ha

Unit

206.1 63.6 134.4 83.3 71.7 44.1

161.4 49.8 162.6

North America

128.2 89.6 57.2 94.7 71.0 85.9

60.3 42.2 82.7

Europe

551.5 99.8 550.0 99.8 1.5 100.0

551.2 99.7 1.5

Former USSR

41.6 100.0 19.4 100.0 22.2 100.0

19.4 46.7 22.2

Other TBDCsa

Ownership and management of forest available for wood supply (FAWS) in the temperate and boreal developed countries (TBDCs)

FAWS in public ownershipb • As per cent of total FAWS FAWS in private ownership

Table 2.5

THE INTERN ATION AL TIMBER TRADE

GLOB AL FOREST AND WOOD RESOURCES

opportunities for hunting and different recreation and leisure activities, water regulation, and so on. In relatively recent times it has become apparent, however, that the management of a forest to provide an optimal sustained yield of wood is not necessarily compatible with managing it as a sustainable ecosystem, in which trees are only one of many components. In particular, restricting the number of tree species in a forest stand or planting species outside their natural range, in order to obtain the optimum wood yield per hectare, would run counter to the principles of biological diversity (biodiversity). Such stands were likely to be sustainable in the long run only through the continuing input of ‘artificial’ treatments, including the use of pesticides and fertilisers. It would need to be explained to an increasingly environment-conscious public that such forest stands have more in common with agricultural crops than the more natural forests in which they like to hike, picnic or pick berries. These considerations were behind the drawing up of the definitions used in the temperate and boreal forest resource assessment 2000 to distinguish between forest undisturbed by man, semi-natural forest and plantations, as described in the previous section, and to assess the area of managed forest, as shown in Table 2.5. The definition of managed forest is forest land that is managed in accordance with a formal or an informal plan applied regularly over a sufficiently long period (five years or more). The management could have as an objective any output of the forest, wood or non-wood goods and services; and, more controversially, a decision to exclude an area from management, for example as a wilderness area or nature reserve, also qualified it as being managed. The results of the assessment showed that in the TBDCs as a whole, as much as 87% of forest available for wood supply was considered by countries to be managed (Table 2.5). The proportion was higher in publicly owned FAWS (96%) and lower in privately owned (62%), largely because only 40% of FAWS in private ownership in the United States was considered to be under management.

Ownership and management in the developing countries Information about the ownership and management structures of forests in the developing countries is scattered and incomplete. In those with central economies, such as China, North Korea (Democratic Republic of Korea) and Vietnam, ownership is entirely public (State), but public ownership does not necessarily imply that the forests are all managed. So far as is known, most forest in other developing countries is, ipso facto, publicly owned, even if, as mentioned earlier, some areas are under concessions to private companies for management or exploitation. The area of plantations is, however, 35

THE INTERN ATION AL TIMBER TRADE

increasing in many countries, and part of this area is privately owned or leased on a long-term basis to private investors. Estimates of the proportion of the moist tropical forest under management vary widely, largely because of the difficulty of agreeing on a definition of management applicable to natural forest. Stringent conditions may be set for sustainable forest management (Sharma 1992): (i) the government must establish a permanent forest estate as part of an overall land-use plan; (ii) it must create secure conditions for the managers of the forest; (iii) it must set standards for allowable annual cut, cutting cycles, harvesting techniques, environmental safeguards and the like; (iv) after harvesting, future crops should be assured and no unnecessary environmental damage should occur; (v) economic and financial policies must not demand more from the forest than it can yield sustainably; and (vi) policies must satisfy a public that is becoming increasingly conscious of environmental problems. Poore (1989) found that less than one million ha of natural tropical moist forest met these criteria. Official government views, relayed by FAO as a result of the 1980 global forest survey, give a total of about 40 million ha under management, a figure not very different from the 42 million ha under management plans in 1983 given by Mather (1990) and based on World Resources Institute data. The higher estimate is equivalent to only about 31/2 % of the total area of forest in the tropical regions. Mather comments that the extent of (tropical) forest management is therefore limited, and it is clear that its development is not keeping pace with the growth of pressures on the forest resource. In particular, large areas of state-owned forest in the tropics are now subject to forest utilisation contracts between government and logging company, and the nature and enforcement of these contracts (or concessions) is an issue of fundamental importance to the future of the tropical forest in particular.

That was written in 1990, and it is doubtful whether the situation showed any substantial improvement over the subsequent decade.

The wood harvest Industrial wood removals: the historical pattern The quantity of wood taken from the forest has been on a rising trend for many years. In the mid-1960s it amounted to about 2.2 billion m3 a year, at the beginning of the 1980s to about 3 billion, and towards the end of the 36

GLOB AL FOREST AND WOOD RESOURCES

1990s to an estimated 3.5 billion (Fig. 2.5). There is a certain ambiguity about whether the volumes of wood removed (harvested) are reported in overbark (ob) or underbark (ub) measure. Those of fuelwood are generally overbark, but the problems of obtaining accurate data on fuelwood removals are so great in many countries that the differences between overbark and underbark could easily be less than the estimation error. To the extent possible, removals of industrial roundwood are reported underbark, even if some

4000 World total

3500

Million m3

3000 2500 Developing regions 2000 1500 Developed regions

1000 500

0 1965 1970 1975 1980 1985 1990 1995 1998 (prov.) A. Removals in developed and developing regions 4000 3500

World total

Million m3

3000 2500 2000

Fuelwood

1500

Industrial wood

1000 500 0 1965 1970 1975 1980 1985 1990 1995 1998 (prov.) B. Removals by main assortment groups

2.5 Trends in roundwood removals, 1965–1998 (provisional) (source: FAO database). 37

THE INTERN ATION AL TIMBER TRADE 1800 World total

1600 1400

Coniferous Million m3

1200 1000 800 Broadleaved 600 400 200 0 1965 1970 1975 1980 1985 1990 1995 1998 (prov.) C. Removals of industrial wood by species groups 1800 World total

1600 1400

Developed regions

Million m3

1200 1000 800 600 Developing regions 400 200 0 1965 1969 1973 1977 1981 1985 1989 1993 1997 D. Removals of industrial wood by main regions

2.5 Continued

quantities are delivered to mill and used in unbarked form. In the absence of more precise information, it may be assumed that the data on removals of industrial roundwood in this section and in later chapters are given as volumes underbark (m3 ub).

38

GLOB AL FOREST AND WOOD RESOURCES

Harvesting of fuelwood has continued to rise steadily, more or less in step with the growth of populations in the developing countries, which depend on it for a large part of their heating and cooking needs. Although fuelwood removals account for more than half the world total of removals, they will not be considered in detail here, since fuelwood is mostly used locally and is not of importance in international trade: its low unit value to weight ratio makes it uneconomic to transport over long distances. Removals of industrial wood have followed a less regular path, fluctuating according to the rhythm of the economic cycles, particularly in the developed countries, or to other major economic events, such as the collapse of the former USSR at the beginning of the 1990s (Fig. 2.5A and B). World removals of industrial wood increased from 1.1 billion m3 in the mid1960s to a peak of 1.7 billion in 1990, falling back a little thereafter mainly because of the steep decline in the former USSR (Fig. 2.5D). The rather modest rate of growth in removals is in contrast to the more dynamic expansion in the production of wood products in general, and of paper, paperboard and wood-based panels in particular. The explanation lies mainly in the greater use of industrial wood residues and of waste paper as raw material, as will be described in Chapter 3. Comparing 1995 with 1965, the increases in world removals over the 30-year period were as follows (index 1965 = 100): Total removals • Fuelwood • Industrial wood • Developed countries • Developing countries • Coniferous • Broadleaved

150 165 134 110 (excl. former USSR: 138) 276 115 (excl. former USSR: 149) 183

What is apparent from the above and Fig. 2.5A, B and C is the similarity in the evolution of removals over the past three decades between, on the one hand, those in developed countries, of industrial wood and of coniferous species; and on the other hand, between those in developing countries, of fuelwood and of broadleaved (non-coniferous) species. This is not so surprising considering that the developed countries account for the major part of the removals of industrial wood, which is largely coniferous, and the developing countries account for the major part of fuelwood removals, which are mainly broadleaved. What is noteworthy, however, is the much stronger growth in the removals of industrial wood in the developing countries than in the developed, even when the collapse after 1990 in the former USSR is taken into account.

39

THE INTERN ATION AL TIMBER TRADE

Industrial wood removals: the geographical pattern The distribution of world removals of industrial wood in 1996 according to regions and main assortments is shown in Table 2.6. The importance of coniferous species in the removals of the northern hemisphere regions is apparent, as is that of broadleaved species in the other regions, particularly Other Asia-Pacific and Africa. Industrial wood destined for further processing (sawlogs and veneer logs, pulpwood) account for most of the removals, particularly in the northern hemisphere regions. North America and Europe account between them for the major share of world removals (nearly 60%), while the three predominantly southern hemisphere regions account between them for one quarter. Harvesting intensity, measured as the average volume of industrial wood taken per hectare of forest, was about 0.4 m3 in 1996 at the world level (Table 2.7). But it varied considerably from region to region. In Europe it was about four times the world average, in North America three times and in East Asia twice as much. On the other hand, it was only about a third of the world average in the former USSR, Africa and Latin America. Higher figures would be obtained if removals were calculated per area of forest available for wood supply (FAWS), but, as seen earlier, data on the area of FAWS are not known for some regions. For North America the volume per hectare of FAWS is estimated at 1.8 m3/ha, for Europe 2.0 m3/ha and for the former USSR 0.2 m3/ha. While it might be inferred that regions with already high harvesting intensities might have limited scope to expand their removals further, this is not necessarily the case. As was seen earlier, even in Europe, fellings – which include removals and volumes felled but left in the forest – are still appreciably less than increment. For the regions with low harvesting intensities, introduction or intensification of management could, other things being equal, allow harvesting to be considerably increased without prejudicing the principle of sustainability. Table 2.7 also shows that at the world level in 1996 about a quarter of a cubic metre of industrial wood was removed from the forest per inhabitant. This volume doubles if removals of fuelwood are added. Removals of industrial wood per inhabitant in North America are about seven times the world average, and in Europe twice. At the other end of the range, they are much less than the average in East Asia and Other Asia-Pacific with their huge populations, as well as in Africa. Where removals per hectare are relatively high and removals per capita low, as in East Asia, this gives some indication that the region has difficulties in meeting its wood needs from domestic sources and must partly rely on imports. Conversely, if harvesting intensity is low, there could be scope for the region to contribute more to world supply and international trade in wood products, given the necessary development of the forest resource and the means of production, whatever the 40

41

100 61 62 41 27 16 11 4 100 100 100 100 100 100 100 100

PER CENT OF TOTAL (%) Total, of which: Coniferous Sawlogs & veneer logs Coniferous Pulpwood Coniferous Other Coniferous

PER CENT OF WORLD TOTAL (%) Total, of which: Coniferous Sawlogs & veneer logs Coniferous Pulpwood Coniferous Other Coniferous

Source: FAO database

1504 913 932 617 410 239 162 57

WORLD

39 47 42 50 44 45 11 16

100 72 66 52 31 18 3 2

591 425 392 309 181 107 18 9

North America

19 24 18 22 26 32 10 16

100 77 57 47 37 27 6 3

288 221 165 135 107 77 17 9

Europe

Industrial wood removals by region and assortment, 1996

VOLUME (million m3) Total, of which: Coniferous Sawlogs & veneer logs Coniferous Pulpwood Coniferous Other Coniferous

Table 2.6

7 7 7 8 6 5 12 14

100 62 60 43 22 12 17 7

110 68 66 47 24 13 19 8

Former USSR

9 10 8 9 3 3 25 46

100 67 58 41 11 6 31 20

132 89 77 54 14 8 41 26

East Asia

12 4 13 4 7 3 17 4

100 18 69 13 15 5 15 1

176 32 121 23 27 8 27 2

Other Asia-Pacific

4 1 3 1 3 2 19 2

100 19 37 10 18 6 45 1

67 13 25 7 12 4 30 1

Africa

9 7 9 7 11 9 6 2

100 46 61 30 32 16 6 1

140 65 85 42 45 22 9 1

Lat. America

GLOB AL FOREST AND WOOD RESOURCES

THE INTERN ATION AL TIMBER TRADE Table 2.7 Removals of industrial wood in 1996 per hectare of forest and per inhabitant, by region Per hectare of forest (m3/ha)

Per person (m3/cap.)

0.41 1.28 1.70 0.13 0.80 0.35 0.13 0.15

0.26 1.94 0.49 0.38 0.09 0.09 0.09 0.29

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Source: FAO 1999 and database; UN-ECE/FAO 2000

present level of removals per capita may be. For the time being, exports from the former USSR remain quite small in relation to its forest potential, while in Latin America and Africa, exports are roughly balanced by imports. In these three regions particularly, the potential of the forest resource is not matched by their wood-processing capacity for a number of reasons, among the more important of which are problems of inaccessibility and inadequate infrastructure, availability of capital, management and technical skills, and in some countries political instability. This, as will be seen in later chapters, has had implications for the pattern of international trade in wood products.

Industrial wood removals at the country level In 1996 two countries, the USA and Canada, accounted for nearly two-fifths of the world’s removals of industrial wood, and four countries, those two plus China and Brazil, for more than half (Table 2.8). Twenty countries out of the 185 reporting removals data to FAO accounted for 84% of the world total and 165 countries for the remaining 16%. There is a marked contrast in the proportion of total wood removals (including fuelwood) between those countries, mainly industrialised, whose removals consist very largely of industrial wood and others where fuelwood is predominant. Among the latter, in India only 8% of removals is of industrial wood, and in the 165 other (not Top 20) countries in aggregate, which include quite a number of industrialised countries although they are in the minority, the average is 21%. In 7 of the Top 20 countries, including such major exporters as Canada, Sweden, Finland and New Zealand, industrial wood removals account for 90% or more of total removals. 42

43

30 643 24 941 22 469 19 382 19 340

18 823 18 176 16 343 14 898 12 433

France India Japan Chile Australia

Poland South Africa New Zealand Belarus Spain

236 603

Source: FAO Yearbook of Forest Products 1997

Other 165 countries

1 266 813

52 500 47 243 42 503 35 771 34 538

Sweden Indonesia Finland Malaysia Germany

Top 20

406 595 184 459 108 718 84 584 73 005

Total industrial wood (IW) (’000 m3)

15.7

84.3

1.3 1.2 1.1 1.0 0.8

2.0 1.7 1.5 1.3 1.3

3.5 3.1 2.8 2.4 2.3

27.0 12.3 7.2 5.6 4.9

Per cent of world total IW removals (%)

20.8

57.2

92.1 71.8 99.7 94.8 77.6

74.6 8.3 95.9 64.3 86.9

93.2 23.5 91.2 78.1 93.3

82.1 97.2 34.7 38.4 75.3

Per cent of total removals (incl. fuelwood) (%)

Industrial roundwood (IW) removals data for the ‘Top 20’ countries in 1996

USA Canada China Brazil Russian Fed.

Country

Table 2.8

43.3

63.9

75.8 47.9 99.7 61.4 61.0

58.9 11.1 80.1 92.2 47.3

92.7 1.1 88.5 0.6 77.9

65.6 86.0 64.1 39.1 63.2

Coniferous as per cent of total IW (%)

0.2

0.5

2.1 2.1 2.1 1.9 0.9

2.0 0.4 0.9 2.5 0.1

1.9 0.4 1.9 2.3 3.2

1.9 0.8 0.8 0.2 0.1

Per hectare of forest (m3/ha)

0.1

0.4

0.5 0.4 4.3 1.4 0.3

0.5 0.0 0.2 1.3 1.0

5.9 0.2 8.2 1.7 0.4

1.5 6.0 0.1 0.5 0.5

Per person (m3/cap.)

GLOB AL FOREST AND WOOD RESOURCES

THE INTERN ATION AL TIMBER TRADE

There is also a large variation in the proportion of coniferous (softwood) species in industrial wood removals, which is of course linked to the species composition of the forest resource. This is in contrast to fuelwood, the removals of which nearly everywhere consist largely of broadleaved species. In Indonesia and Malaysia, as well as in other tropical countries which have not as yet produced much wood from fast-growing coniferous plantations, industrial wood removals consist almost exclusively of broadleaved species. At the other extreme, Chile and New Zealand produce almost exclusively coniferous industrial wood from industrial plantations. In New Zealand there is a virtual ban on the industrial exploitation of the extensive native broadleaved forests. In Sweden over nine-tenths of removals are of coniferous species, and the proportions are not much less in Canada and Finland. The comparative data in Tables 2.7 and 2.8, removals per hectare of forest and per inhabitant, tell us something about countries’ actual or potential ability to be self-sufficient in industrial wood and wood products. In countries, mainly the industrialised ones, where much of the forest is under management, removals per hectare are several times higher than the world average of 0.4 m3 per hectare, for example about 7 times higher in the USA, Sweden, Finland and Germany. There are very low removals volumes per hectare in many of the countries where much of the forest is beyond the reach of commercial exploitation at present, such as Brazil, the Russian Federation and Australia or where management is still generally lacking or limited in coverage as in the majority of the developing countries. Malaysia is an interesting exception, where removals per hectare are nearly six times the

Table 2.9 Estimates of area of productive forest and volume of industrial roundwood harvested and calculated harvesting intensity by management category in 1995 Categories of productive forest Unit Area Harvest Harvesting intensity Share of area Share of harvest

Million ha Million m3 m3/ha/year Per cent Per cent

M5

M4

M3

M2

M1

TOTAL

43 196 4.6 1.5 12.4

23 65 2.8 0.8 4.1

217 419 1.9 7.5 26.5

218 307 1.4 7.5 19.4

2407 592 0.3 82.8 37.5

2908 1579 0.5 100.0 100.0

Legend: M5: Forest owned by forest industries in 16 temperate and boreal zone countries M4: Fast-growing plantations, primarily of exotic species and in the tropical zone M3: Forest owned by private, non-industrial owners in 16 temperate and boreal countries M2: Publicly owned forest in 16 temperate and boreal countries M1: All other productive forests, temperate, boreal and tropical, publicly and privately owned Source: Brooks et al. in Solberg (Ed.) 1996

44

GLOB AL FOREST AND WOOD RESOURCES

world average. Malaysia has more forest under management than have most developing countries but has also a planned programme of conversion of natural forest to other land uses. The volume of removals per inhabitant ranges widely above and below the world average of 0.26 m3. In China, India and Japan, with their large and dense populations, the volumes are little more than nil. At the other extreme, major exporters of wood products, which are also rather lightly populated, such as Canada, Sweden, Finland and New Zealand, have very high volumes, over 8 m3 per capita in the case of Finland. However, in Indonesia, also a large exporter, the volume is only half the world average, raising the question of how long, with rising domestic demand and diminishing area of forest, it can go on exporting on the basis of its natural forests. The worldwide distribution of removals of industrial wood is quite different from that of forests, as was seen in Fig. 2.2. The former are concentrated in the temperate and boreal industrialised countries and on coniferous species. There is an interesting estimate of the breakdown by Brooks et al. in Solberg (ed.) (1996) of the wood harvest in five different categories of productive forest (roughly equivalent to FAWS), which illustrates the differences in harvesting intensity between these categories (Table 2.9). The distinction between the categories was made chiefly on the basis of management type. Less than 20% of the productive forest area accounts for more than 60% of industrial wood removals (categories M2 to M5). Just taking into account the countries for which data were available, private forest owners (M3 and M5) accounted for less than 10% of the area but nearly 40% of the world harvest. Fast-growing plantations are included in categories M5 (in the temperate zones) and M4 (in the tropical zones). Their contribution to the total world harvest has been relatively modest up to now but is likely to be greater in the future. Some indication of the impact this may have on world trade in wood products is already apparent from the growth of exports from such countries as Brazil, Chile and New Zealand.

45

CHAPTER

3 Production and consumption of wood products Properties of wood

W

ood is a renewable material: that is evident from the previous chapter. In this chapter we shall show that it is also a versatile one, capable of being transformed in different ways into a variety of products that can be used in numerous applications. The variability of its composition and structure is both a strength and a weakness: a strength, because of the diversity of uses to which it can be put; a weakness, because of the care needed in its transformation and use to ensure that it matches up to required quality or performance standards.

The composition of wood The properties and structure of wood are the direct consequence of the way in which trees grow and of the ‘raw materials’ they use. Like all green plants, trees make the materials for growth in their leaves by the process of photosynthesis. This is a chemical reaction in which carbon dioxide from the atmosphere combines with water under the influence of sunlight and of nutrients taken from the ground to form sugars and starches. 46

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

Oxygen, on which nearly all life depends, is a by-product of this process. Chlorophyll, the substance which gives leaves and needles their characteristic green colour, is the catalyst for the reaction. The carbon dioxide is absorbed directly by the leaves through little openings called stomata, while the water and nutrients pass into the roots through osmosis and flow up through the sapwood, or xylem, in the stem and branches to the leaves. Apart from its function of transporting water and nutrients, wood provides mechanical strength to support the weight of the crown of the tree and stores the food produced by the leaves. This food is moved in solution from the leaves to all parts of the tree through the inner bark, or phloem. It may be used either immediately or after a period of storage for the generation of growth. New wood is produced by a specialised cell layer called the cambium, lying between the wood and the phloem. The wood cambium completely encloses the living parts of the tree, and during periods of active growth the cambial cells divide to produce new wood cells on the inside and phloem cells on the outside. The sugars and starches produced by photosynthesis are transported to the cambium layer where they go through further compounding to become cellulose, lignin and other chemical components of wood. If part of the year is unfavourable for growth because of cold or drought, as is the case in most regions outside the moist tropics, wood is laid down as seasonal increments, which are visible as growth rings.

The functions of wood in the living tree The functions of sap flow and food storage are performed by the most recently formed wood, the sapwood. After a time, however, the innermost sapwood becomes so far removed from the active growth region that it dies and the cells undergo chemical change. In many cases the substances produced colour the wood to form a distinctive heartwood. Within the tree, the functions of sap conduction, physical support and food storage are carried out by cells specially adapted for each purpose. In softwoods (Gymnosperms), conduction is provided by thin-walled tracheids, which may be as long as 3 millimetres, and support by thickwalled tracheids. In hardwoods (Angiosperms), conduction is through vessels, short pipe-like cells with open ends, and support is given by fibres, usually about 1 mm long with thick walls and pointed ends. In both softwoods and hardwoods, food storage is in parenchyma cells, which are small, thin-walled and box-like in structure. These cells are sometimes arranged 47

THE INTERN ATION AL TIMBER TRADE

axially, especially in hardwoods, and always in horizontal bands called rays, which run across the grain in a radial pattern.

The physical structure of wood The annual rings, which are visible in cross-sections of many woods, are the result of the formation of ‘earlywood’ or springwood, consisting of thinwalled tracheids in softwoods and large vessels in hardwoods, followed by ‘latewood’ or summerwood, consisting of thick-walled tracheids in softwoods and numerous small vessels and fibres in hardwoods. In fast-growing species, annual rings may have a width of a centimetre or more. The density of the wood is determined, in the case of softwoods, for example, by the relative proportions of earlywood and latewood; the more thin-walled tracheids there are, the less dense the wood. The configuration and relative proportions of the different types of cell determine the physical characteristics of wood, and each species is different in that respect. Even within species there may be marked variability, depending on the conditions in which the tree is grown. Furthermore, conditions can vary from year to year, so that the wood characteristics can differ within the same tree. There are other characteristics which may be of importance in determining the suitability of wood for a particular use. Knots are a normal feature arising from the branches growing out of the stems. Depending on their size and location, they may be a cause of structural weakness. In non-structural uses, it is often a matter of taste whether they are seen as desirable from the decorative point of view or otherwise. Resin canals or cavities are a feature of certain species, for example pines.

The chemical composition of wood Wood is a compound structure composed mainly of cellulose fibres bonded together by lignin, a natural plastic. It is actually lignin which distinguishes trees from other plants, which have little of it in their make-up. By binding together parallel bundles of cellulose fibres, lignin enables trees to grow tall and gives wood its stiffness as well as its resilience. In many uses of wood, the inherent benefits of the combination of cellulose fibres and lignin are kept, for instance in pitprops, poles and posts, sawnwood and wood-based panels and their derivatives, but lignin is separated out in the process of making chemical woodpulp for paper, paperboard and other products based on cellulose. The lignin in the black liquor, which is a by-product of the

48

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

chemical pulping process, is subsequently used for production of energy by the pulping industry.

Properties relevant to the uses of wood The properties of wood in its raw state are dependent to a considerable extent on the species and in turn determine the use to which the wood may be put. They may be positive or negative, or both at the same time. Among the key properties are the following: • • • • • • • •

Strength-to-weight relationship: generally favourable compared with other materials. Inflammability: good as a source of energy; can be a hazard in construction, but the danger is often exaggerated. Durability: varies very much from species to species. Biodegradability: the other face of durability; may be a positive feature in certain short-duration uses. Decorative value: also varies from species to species. Workability: a material that is easy to cut, saw, drill, turn, etc. Energy efficiency: less energy used in transformation than for most competing materials, such as steel, aluminium, plastics and glass. Versatility: can be used unprocessed or in numerous processed forms.

Other properties could be added to this list, such as bending strength, impact resistance, heat and noise insulation values, stability, hardness and permeability (Willis 1968), but it is probably enough to make the point that a catchphrase such as ‘Wood is good’ has little meaning unless qualified by answers to questions such as ‘Good for what?’, ‘What species?’ and ‘In what form?’.

Types of product The felling of a tree is the start of a journey that wood takes to its final destination. In some cases the journey may be short, when it is used in more or less unprocessed form as fuelwood, agricultural stakes and fencing posts, poles for construction, pitprops and so on. Or it may be longer, passing through one or more stages of transformation to become one of numerous end-products. The type and extent of transformation depends on the ultimate use to which the product will be put, which in turn deter-

49

THE INTERN ATION AL TIMBER TRADE

mines which of the properties or characteristics of wood are to be taken advantage of.

The transformation of wood raw material The types of transformation can be grouped under four headings: 1 No transformation, or simple shaping or cutting to length of the round log, or dipping or impregnation with preservatives, pesticides or fire retardants. This retains the inherent properties of wood in its original form. 2 Sawing lengthwise into baulks, planks, boards, etc., or peeling or slicing into veneer sheets to use as such or for processing into plywood. This also keeps the inherent properties of wood. 3 Cutting into small pieces (chips or particles), which are then reconstituted into particle board. Alternatively, they can be used as such for energy or garden mulching. 4 Reducing to fibres, which are then reconstituted into paper, paperboard and fibreboard or further processed into cellulose-based products. This is an over-simplification: more than one form of transformation may be used to produce a composite product having performance characteristics for a specific application that are higher than can be obtained from the product of a more simple process.

The main groups of wood products In this book we are primarily interested in the products of importance in trade, and so we can list and describe wood products on the basis of international trade classifications, such as the Standard International Trade Classification (SITC, Revision 3) (United Nations 1994). For simplicity, they are considered under the following headings: • • • • • • •

Wood raw material. Sawnwood. Wood-based panels. Woodpulp. Paper and paperboard. Recovered paper (waste paper). Added value wood products. 50

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

Attention will be concentrated mainly on the first five groups, although a separate section will deal with added value products. Definitions are given in Appendix 2. The main categories of products are listed below. Those wood products or groups of products that are most commonly mentioned in the analysis of markets in later chapters are shown in italics.

Wood raw material •

•

•

Roundwood (wood in the rough, as harvested, with or without bark). – fuelwood; – industrial roundwood * sawlogs and veneer logs (for the production of sawnwood, including railway sleepers, veneer sheets and plywood); * pulpwood (for the production of woodpulp, particle board and fibreboard); * other industrial roundwood (pitprops, poles, piling, posts, etc.). Chips and particles (wood reduced to small pieces for use in the production of woodpulp, particle board and fibreboard, as fuelwood or other purposes). Wood residues (consisting principally of industrial residues, e.g. slabs and offcuts from sawmilling, veneer log cores, etc.).

Sawnwood (including railway sleepers, produced by sawing or profile chipping) • •

Sawn softwood (coniferous sawnwood, softwood lumber). Sawn hardwood (non-coniferous sawnwood, hardwood lumber).

Wood-based panels (sheet materials made from thin sheets of wood (veneer sheets), chips or particles, or fibres) • •

•

Veneer sheets (excluding those used in plywood manufacture). Plywood (including plywood made uniquely from veneer sheets and plywood with a core of solid wood or other materials with veneer surfaces). Particle board (made from wood or non-wood materials; includes chipboard, waferboard, oriented strand board [OSB], flaxboard). 51

THE INTERN ATION AL TIMBER TRADE

•

Fibreboard (made from fibres of wood or other ligno-cellulosic material; includes insulating board [non-compressed fibreboard, softboard], hardboard [compressed fibreboard] and medium density fibreboard [MDF].

Woodpulp • •

•

•

Mechanical woodpulp (obtained by grinding or milling wood into fibres). Semi-chemical woodpulp; also chemi-mechanical woodpulp (obtained by subjecting wood to a series of chemical and mechanical treatments, one of which alone is not sufficient to make the fibres separate easily). Chemical woodpulp (for paper and paperboard making; obtained by a chemical process under pressure [see below]) – sulphate (or kraft) and soda woodpulp (obtained by cooking small pieces of wood in a pressure vessel in the presence of sodium hydroxide cooking liquor [soda pulp] or a mixture of sodium hydroxide and sodium sulphite cooking liquor [sulphate pulp]. It may be bleached or unbleached); – sulphite woodpulp (obtained by cooking small pieces of wood in a pressure vessel in the presence of a bisulphite cooking liquor. Bisulphites such as ammonium, calcium, magnesium and sodium are commonly used. It may be bleached or unbleached). Dissolving woodpulp (chemical woodpulp, sulphate, soda or sulphite, of special quality, with a very high alpha-cellulose content, readily adaptable to uses other than paper-making, such as synthetic fibres, cellulosic plastic materials, lacquers and explosives).

Paper and paperboard (made from pulp of wood or other fibres, including recovered paper and paperboard [waste paper], with or without fillers and coatings. For fuller descriptions, see Bolton 1998). •

Cultural papers (or graphic papers) – newsprint (usually uncoated, used mainly for the printing of newspapers); – printing and writing paper (suitable for printing and business purposes, made from a variety of pulp blends and with various finishes; includes papers for books and magazines, typing, photocopy, fax and computer paper, paper for banknotes, stationery, posters, etc.). 52

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

•

Other paper and paperboard – household and sanitary paper (includes tissues and towelling, as for napkins, facial tissue, toilet tissue, wadding, disposable tissues, etc.); – wrapping and packaging paper and paperboard (includes vegetable parchment, greaseproof and glassine paper; linerboard used as facing material or corrugated or solid paper or paperboard boxes and containers; fluting medium used as medium when converting paper or paperboard into a corrugated board; sack kraft paper, strong paper made from sulphate pulp and used in the manufacture of single- or multi-wall sacks; other kraft wrapping paper; folding boxboard, paperboard used for the manufacture of folding boxes; other wrapping and packing paper and paperboard); – other paper and paperboard not elsewhere specified (includes construction paper and paperboard, special thin papers, e.g. cigarette papers, tea-bags, other papers such as blotting paper, filter paper, photographic sensitising paper, trunk and suitcase board, and so on).

The above lists could be extended by including products which might not be considered as wood products, such as recovered paper (waste paper) and other (non-wood) fibre pulp. There are also all the products of secondary or tertiary processing (added value products).

Patterns and trends of production and consumption The purpose of this section is to look at the quantities of wood products made in the different regions of the world and how they relate to consumption. This will show the level of self-sufficiency and hence the possibilities for exporting surplus production or the needs for importing to cover deficits. The figures of annual production used here, as well as of exports and imports, are those reported by countries to FAO. Consumption is a derived figure obtained by adding imports to production and deducting exports. It is sometimes called ‘apparent consumption’, since it is not a precise figure of the quantity actually used in a given year, mainly for the reason that no account is taken of changes in stocks along the chain of supply between producer and consumer. Stock changes can be considerable over a 12-month period as a result of market conditions and the trading cycle, but in the majority of countries it is difficult to monitor them. Nor do the tools exist to measure on a continuing basis the volumes actually going into consump53

THE INTERN ATION AL TIMBER TRADE Table 3.1

Production of wood products by product groups and regions, 1997a

WORLD N. America Europe Former USSR East Asia Other Asia-Pacific Africa L. America

Sawnwood

Wood-based panels

(m3)

(%)

(m3)

(%)

(mt)

(%)

(mt)

(%)

431.0 176.2 92.6 26.9 47.5 44.4 8.0 35.4

100.0 40.9 21.5 6.2 11.0 10.3 1.9 8.2

156.8 51.4 46.4 4.8 24.4 21.8 1.9 6.1

100.0 32.8 29.6 3.1 15.6 13.9 1.2 3.9

162.3 85.2 38.6 3.9 14.3 7.6 2.8 9.9

100.0 52.5 23.8 2.4 8.8 4.7 1.7 6.1

289.3 95.4 86.3 3.8 71.1 16.0 2.9 13.8

100.0 33.0 29.8 1.3 24.6 5.5 1.0 4.8

Woodpulp

Paper & paperboard

a

Million units Source: FAO database

tion. To overcome partly the distortion created by using apparent consumption data, three-year averages are sometimes used, although they have not been in the present analysis.

Production of wood and its derivatives In 1997, world production of sawnwood amounted to 431 million m3, of wood-based panels 157 million m3, of woodpulp 162 million tonnes and of paper and paperboard 289 million tonnes (FAO database). The distribution of output among the seven regional groups is shown in Table 3.1. For all four main product groups, North America is the leading producer, with shares of the world 1997 totals ranging from 53% for woodpulp to 33% for wood-based panels. Europe is in second position with shares between 30% for woodbased panels and paper and paperboard and 21% for sawnwood. East Asia and Other Asia-Pacific are the next largest producing regions; East Asia’s share of world paper and paperboard output amounted to as much as 25% in 1997, although its shares of the other product groups were less – between 9 and 16%. Other Asia-Pacific held 14% of world output of wood-based panels, and between 5 and 10% of that of the other product groups. Latin America produced 8% of the world’s sawnwood, but 5% or less of the other products. The countries of the former USSR accounted for 6% of world production of sawnwood in 1997, around 3% of wood-based panels and woodpulp but little more than 1% of paper and paperboard. All these shares are

54

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

appreciably less than before the break-up of the USSR, reflecting the sharp decline in output since 1990, which will be discussed later. Africa’s share of sawnwood was 2% and less than that for the other products. Particularly in the case of sawnwood and wood-based panels, regional shares of world output vary between the individual products. This is due to a number of factors, among the more important being the availability of wood raw material, both industrial roundwood and wood residues and chips and waste paper, the quality and characteristics of the raw material and, in the case of roundwood, the dimensions, and the location of industries relative to their sources of raw material and to their markets. The main wood products dealt with in this book were described earlier in this chapter; world production of them in 1997 is shown in Table 3.2. Sawn softwood accounted for 73% of world sawnwood output in 1997, the remainder being sawn hardwood. In the case of wood-based panels, particle board made up 45% of the world total, plywood 36% and fibreboard 16%. Also shown in the table is the production (removals) of industrial roundwood by categories, as well as production (recovery) of recovered paper (waste paper) and pulp other than woodpulp. All these, with the exception of other industrial roundwood (pitprops, poles, etc.), comprise the raw material for the manufacture of the semi-processed and processed wood products. The regional distribution of production of the main wood products is shown in Fig. 3.1. In the case of sawn softwood, North America and Europe between them accounted for almost 72% of the world total in 1997, with a further 19% in the former USSR and East Asia. The other regions, most of whose countries are located in the southern hemisphere, produced less than 10% of the total. The picture is quite different for sawn hardwood: Latin America, Africa and Other Asia-Pacific produced nearly half of the world total, largely from tropical hardwood logs. When account is taken of the production from tropical logs imported by northern hemisphere regions, especially East Asia and Europe, well over half the world output of sawn hardwood was of tropical species. The Other Asia-Pacific group was the leading producer with 30% of the sawn hardwood total, followed by North America with 26% and Latin America with 15%. The output pattern of plywood has some similarities to that of sawn hardwood, given that tropical hardwoods are the principal raw material in the southern hemisphere regions. However, softwoods are more important in the northern hemisphere, especially in North America, which accounted for 35% of world plywood output in 1997, compared with 28% in Other AsiaPacific and 24% in East Asia. In East Asia, a large part of the output is based on imported logs, both coniferous and tropical hardwoods. Taking account of the use of imported tropical hardwood logs for plywood manufacture in

55

56 3.1

156.8 5.8 56.0 70.4 24.6 7.3 12.3 4.9

WOOD-BASED PANELS • Veneer sheets • Plywood • Particle board • Fibreboard Hardboard Medium density fibreboard (MDF) Insulating board

Source: FAO database

100.0 3.7 35.7 44.9 15.7 4.7 7.8

431.0 314.2 116.8

100.0 72.9 27.1

100.0 61.0 40.8 20.2 26.7 15.9 10.8 12.3 5.4 6.9

(%)

SAWNWOOD • Sawn softwood • Sawn hardwood

1546.9 944.1 630.9 313.1 412.4 246.1 166.3 190.4 83.6 106.9

(million m3)

World production of wood products, 1997

INDUSTRIAL ROUNDWOOD • Sawlogs, veneer logs Coniferous Non-coniferous • Pulpwood Coniferous Non-coniferous • Other industrial roundwood Coniferous Non-coniferous

Product

Table 3.2

19.1

110.5

RECOVERED (WASTE) PAPER

OTHER FIBRE PULP

289.3 36.3 89.5 163.5 19.0 94.5 49.8

162.3 35.1 6.7 117.3 75.2 35.8 4.7 1.6 3.2

(million mt)

PAPER & PAPERBOARD • Newsprint • Printing & writing • Other paper & paperboard Household & sanitary Wrapping & packaging Other nes

WOODPULP • Mechanical • Semi-chemical • Chemical for paper Bleached sulphate Unbleached sulphate Bleached sulphite Unbleached sulphite • Dissolving pulp

Product

100.0 12.5 30.9 56.5 6.6 32.7 17.2

100.0 21.6 4.1 72.3 46.3 22.1 2.9 1.0 2.0

(%)

THE INTERN ATION AL TIMBER TRADE

World total: 314 million m3

World total: 117 million m3 Europe 11%

Europe 25% North America 46%

Former USSR 7%

Latin America 6%

East Asia 9%

East Asia 12%

Latin America 15%

Other AsiaPacific 3%

Africa 1%

Former USSR 4%

North America 26%

Other AsiaPacific 30%

Africa 5%

A. SAWN SOFTWOOD

B. SAWN HARDWOOD World total: 70 million m3

World total: 56 million m3 Europe 6%

North America 34%

Former USSR 2%

North America 35%

East Asia 24%

Latin America 3%

Former USSR Africa East Asia 4% 1% 8% Other AsiaPacific 3%

Latin America 4% Other AsiaPacific 28%

Africa 1%

Europe 47%

D. PARTICLE BOARD

C. PLYWOOD World total: 162 million mt

World total: 289 million mt

Europe 24% North America 52%

Former USSR 2% East Asia 9% Latin America 6%

Other AsiaPacific 5% Africa 2%

E. WOODPULP

North America 32%

Europe 30%

Former USSR 1%

Latin America 5% Africa 1%

East Asia 25% Other AsiaPacific 6%

F. PAPER AND PAPERBOARD

3.1 Distribution of production of wood products by regional groups, 1997 (source: FAO database). 57

THE INTERN ATION AL TIMBER TRADE

East Asia and Europe, it can be estimated that these species make up between 40 and 50% of the total raw material input worldwide. Particle board is made from chips and particles from both roundwood and industrial wood residues, and from both coniferous and non-coniferous species. Over 81% of world production occurred in Europe and North America in 1997, with a further 12% in East Asia and the former USSR. Its production has been restricted in the southern hemisphere regions, with Other Asia-Pacific, Latin America and Africa between them accounting for only 7% of the world total. While there is also a certain division of labour between countries and regions as far as the individual products within the woodpulp and paper and paperboard groups are concerned, it is generally not as marked as for sawnwood and wood-based panels. The regional distribution of production is therefore shown in Fig. 3.1 for these two product groups in total and not for the individual products. Over three-quarters of world output of woodpulp in 1997 took place in North America and Europe. Their combined share of paper and paperboard production was lower, at 63%, while East Asia accounted for 25%, which compares with its share of only 9% of woodpulp production. China and Japan, in the East Asia regional group, are the second and third largest producers of paper and paperboard in the world after the United States.

Trends in production The long-term trends in production of wood products are shown in Table 3.3 and Fig. 3.2. Between 1970 and 1990 world output of all categories of wood products increased, the highest rates of growth being for particle board and printing and writing paper, and the lowest for sawn softwood and hardwood. In the following eight years up to 1998, growth of production continued for all products except for sawnwood, for which there was a marked decline, and plywood. The fall in sawnwood production was principally due to the collapse of output in the former USSR, which up to 1975 had been the leading sawn softwood producer. Its output of other wood products also fell sharply after 1990, but this had less impact on global trends because its shares of world output were much less than of sawn softwood. Between 1990 and 1998 the fastest growth in world output was in particle board, printing and writing paper and other paper and paperboard, the slowest in woodpulp and newsprint. The data for 1998 in Table 3.3 and Fig. 3.2 were still provisional at the time of writing, so that the trends shown since 1995 should be treated with caution. They appear to reveal, however, a slight recovery after 1995 in sawn softwood production at the world level led by resumed growth in North 58

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS Table 3.3

Trends in world production of wood products, 1970 to 1998 (provisional) Per cent change 1970

1990

1995

1998 (prov.)

1970–90

(million units) SAWNWOOD (m3) Sawn softwood Sawn hardwood

1990–98

(%)

414.6 316.0 98.5

505.2 373.4 131.8

425.8 307.6 118.3

415.7 309.3 106.4

22 18 34

-18 -17 -19

69.8 33.4 19.1 14.0

124.0 48.2 50.4 20.2

146.3 55.3 64.6 20.4

150.5 46.4 72.8 24.9

78 44 164 44

21 -4 44 23

WOODPULP (mt)

101.9

155.1

161.7

159.3

52

3

PAPER & PAPERBOARD (mt) Newsprint Printing & writing Other paper & paperboard

126.5 21.5 26.6 78.4

240.1 32.8 69.5 137.9

282.1 35.4 80.9 165.8

293.6 37.7 90.7 165.1

90 53 161 76

22 15 31 20

1980

1985

1990

WOOD-BASED PANELS (m3) Plywood Particle board Fibreboard

Source: FAO database

600

Million m3 or mt

500 400 300 200 100 0

1970

1975

Sawnwood (m3)

Wood-based panels (m3)

1995

1996

Woodpulp (mt)

1997

1998(P)

Paper & paperboard (mt)

3.2 World production of wood products, 1970–1998 (provisional) (source: FAO database).

America. On the other hand, output of sawn hardwood and plywood was markedly lower in 1998 than 1995, associated partly with the weakness in some Asian economies in 1997/98. Appreciable growth in particle board production occurred, with a notable increase in North America in output of OSB, a specific type of particle board, more than offsetting a decline in 59

THE INTERN ATION AL TIMBER TRADE

Million m3

plywood, which it was replacing in certain applications such as concrete shuttering and wall units. Another recent success story, MDF, revived the fibreboard sector and provided tough competition, notably in furniture manufacture, to sawnwood and other wood-based panels. Trends in production of selected wood products are shown graphically in Fig. 3.3. While the long-term trend of world output has been generally upward, growth cannot be taken for granted for all products and all regions, as has

160 140 120 100 80 60 40 20 0

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America 1970

1975

1980

1985

1990

1995 1998(P)

Million m3

A. SAWN SOFTWOOD 45 40 35 30 25 20 15 10 5 0

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America 1970

1975

1980

1985

1990

1995 1998(P)

B. SAWN HARDWOOD

25 North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Million m3

20 15 10 5 0 1970

1975

1980 1985 C. PLYWOOD

1990

1995 1998(P)

3.3 Trends in production of wood products by regional groups, 1970–1998 (provisional) (source: FAO database).

60

Million m3

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS 40 35 30 25 20 15 10 5 0

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America 1970

1975

1980

1985

1990

1995 1998(P)

Million mt

D. PARTICLE BOARD 100 90 80 70 60 50 40 30 20 10 0

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America 1970

1975

1980

1985

1990

1995 1998(P)

E. WOODPULP 120

Million mt

100

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

80 60 40 20 0 1970

1975

1980

1985

1990

1995 1998(P)

F. PAPER AND PAPERBOARD

3.3 Continued

been shown by the setbacks in the early 1990s to sawn softwood production in the former USSR, and to sawn hardwood and plywood in parts of Asia in the late 1990s. Changing situations with regard to raw material availability, market demand or competitiveness can cause and have caused trends to be altered. One region where expansion has been maintained in the output of nearly all wood products is Latin America, even though its share of the total is still relatively modest.

61

THE INTERN ATION AL TIMBER TRADE Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Particle board (m3) Woodpulp (mt) Paper & paperboard (mt) –150 –100

–50

0

50

100

150

200

250

300

350

Million units Exports Production for domestic use

Imports

3.4 World balances of main wood products groups, 1997 (source: FAO database).

Wood products balances Products may either pass along a chain of supply and further processing before they reach the final consumer in the same country where they were produced, or along a chain involving international trade to reach the consumer in another country. In a number of cases, a third country may be involved: wood raw material may be exported from country A to country B; country B processes it (termed ‘in-transit processing’) and exports it as a processed product to country C. It is not unknown for country A and country C to be the same. Many wood-processing industries produce for the domestic market; a limited number are geared wholly or mainly to export markets. An idea can be gained of the relative importance of domestic and export markets by separating total production into two categories: production for domestic use (PDU) and production for export. Figure 3.4 shows the balances of the main wood products at the world level. Consumption, or more correctly apparent consumption as explained above, is the sum of production for domestic use and imports. For each of the main product groups production for domestic use accounts for between 70 and 80% of total production as well as of consumption; nearer 80% for woodpulp, nearer 70% for wood-based panels. Put another way, exports make up between 20 and 30% of production at the global level, and imports the same proportion of consumption. International trade is consequently an essential element in achieving a balance between supply and demand of all wood products. The importance of trade of individual products does, however, vary from region to region, as may be seen in Fig. 3.5. In the case of sawn softwood, exports account for 35% of North American production and 40% 62

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –100

–50

0

50 Million

100

150

m3

A. SAWN SOFTWOOD

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –10

–5

0

5

10

15 20 Million m3

25

30

35

40

B. SAWN HARDWOOD

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –15

–10

–5

0

5 Million m3

10

15

20

C. PLYWOOD

3.5 Wood product balances by regional groups, 1997 (source: FAO database).

63

25

THE INTERN ATION AL TIMBER TRADE North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –20

–10

0

10

20

30

40

50

Million m3

D. PARTICLE BOARD

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –40

–20

0

20 Million mt

40

60

80

E. WOODPULP

North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America –60

–40

–20

0

20

40 60 Million mt

80

F. PAPER AND PAPERBOARD

3.5 Continued

64

100

120

140

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

of Europe’s, although a large proportion of the trade is intra-regional, e.g. between Canada and the USA. Africa produced less than half its consumption of sawn softwood and had to import the rest. East Asia, by far the largest net importer of sawn softwood, produced three-quarters of its needs domestically, partly from imported logs, and imported one-quarter. The pattern for sawn hardwood was quite different. In the largest producing and consuming region, Other Asia-Pacific, production for domestic use accounted for 88% of total output; only 12% was exported, although this was enough to make the region easily the largest exporter. In fact, trade in sawn hardwood in relation to production and consumption is generally much less important than for sawn softwood: only Europe exported more than a quarter of total production in 1997, followed by Africa with 24%. Among the main importing regions, production for domestic use accounted for 54% of Europe’s consumption, 61% of East Asia’s, and 90% of Other Asia-Pacific’s. A relatively small part of these regions’ output is from the conversion of imported hardwood logs. Plywood is the product for which trade plays the most important role in the supply–demand balance. Thirty-seven per cent of world output and consumption in 1997 entered international trade. In the case of Other AsiaPacific, the predominant exporting region, 80% of production was exported and in Europe as much as 60%. Imports by East Asia, by far the largest net importer, accounted for 45% of consumption, and by Europe for over threequarters. North America is the largest producing area with over one-third of the world total, but the bulk of the output is consumed domestically and much of the rest is traded intra-regionally. A large part of world production, trade and consumption of particle board – four-fifths of production and consumption, even more of trade – takes place in Europe and North America. In these regions roughly one-quarter of total production is exported, most of it intra-regionally. A feature within Europe is two-way trading between countries based on specialisation in production, for example the export of flaxboard from Belgium which imports substantial volumes of wood-based particle board from other countries. Most woodpulp is used in paper and paperboard manufacture and in many industries there is a high degree of integration between pulp and paper making. Consequently, a higher proportion of woodpulp is produced for domestic use, nearly four-fifths, than of the other wood products. Nevertheless, there are countries, for example Brazil in Latin America, and South Africa and Swaziland in Africa, producing primarily for export, so that in Latin America and Africa, exports account for a fairly large proportion of total output, 44% in both cases in 1997. North America produces more than half the world total of woodpulp, exports 20% of its production and imports 8%

65

THE INTERN ATION AL TIMBER TRADE

of its consumption. It is by far the largest net exporter, followed by Latin America. East Asia, the most important net importer, imports nearly twofifths of its woodpulp requirements. North America is the largest producing and consuming region of paper and paperboard, and exports over a quarter of its total production and imports one-fifth of its consumption, the latter mainly intra-regional trade. Europe’s trade, however, is considerably larger than North America’s in absolute terms and in relation to production and consumption. It exported more than half its total production in 1997 and imported more than half its consumption. As for particle board, there is a large degree of intra-regional trade, product specialisation and two-way trade in paper and paperboard. Although East Asia is the largest net importing region, its imports made up only 16% of consumption in 1997. Its large production of paper and paperboard for domestic use, second only to North America’s, is based to a considerable extent on imported wood raw material as well as woodpulp.

Self-sufficiency in wood products The balance between supply and demand can also be expressed in terms of self-sufficiency, as seen in Fig. 3.6. This shows production as a percentage of consumption for selected wood products and the same seven regional groups. In North America, production exceeded consumption in 1997 for all the products shown except plywood, for which they are almost in balance. In the former USSR, production was higher than consumption for all the products by quite a substantial margin. Although production fell drastically after 1990, so did consumption, allowing exports to be maintained, even if lower than in the 1980s. East Asian production was in all cases substantially less than consumption. For the other regional groups, self-sufficiency varied according to the product. Europe was more than self-sufficient in sawn softwood, particle board and paper and paperboard, but deficient in the other products. Other Asia-Pacific was more than self-sufficient in sawn hardwood (just) and plywood (by a very large margin), but deficient in the others. Africa was self-sufficient only in sawn hardwood; on the other hand, Latin America was more than self-sufficient in all products except paper and paperboard.

Consumption Consumption, or more correctly apparent consumption, in 1997 is shown by product and regional group in Table 3.4. Over 70% of the world total of 66

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS North America

7.4

Europe

2.7

Former USSR

45.6

East Asia

–21.5

Other Asia-Pacific

–7.5

Africa

–55.8

Latin America

4.2

–80

–60

–40

–20

0

20

40

60

% A. SAWN SOFTWOOD

North America

7.3 –13.5

Europe Former USSR

10.0

East Asia –22.6 Other Asia-Pacific

1.0

Africa

2.5

Latin America

4.3 –25

–20

–15

North America Europe

–10

–5 0 % B. SAWN HARDWOOD

200.0 –38.8 236.2 –28.6 15.8

Latin America –100

15

–41.9

Other Asia-Pacific Africa

10

1.0

Former USSR East Asia

5

–50

0

50

100 %

150

200

250

300

C. PLYWOOD

3.6 Self-sufficiencya in wood products by regional groups, 1997 (source: FAO 1999). a

Production compared with consumption; e.g. sawn softwood production in North America was 7.4% higher than consumption in 1996 and in East Asia 21.5% lower.

67

THE INTERN ATION AL TIMBER TRADE North America

1.3

Europe

4.7

Former USSR

25.0

East Asia –19.7 Other Asia-Pacific

15.0

Africa

–11.1

Latin America

5.9

–25

–20

–15

–10

–5

0

5

10

15

20

25

30

% D. PARTICLE BOARD North America 15.3 Europe

–37.2

Former USSR

29.7

East Asia

–35.5

Other Asia-Pacific

–4.7

Africa

4.8

Latin America

46.1 –50

–40

–30

–20

–10

0

10

20

30

40

50

60

% E. WOODPULP North America

11.6

Europe

8.8

Former USSR

18.8

East Asia

–7.7

Other Asia-Pacific

–19.2

Africa

–31

Latin America

–19.8 –40

–30

–20

–10

0 10 % F. PAPER AND PAPERBOARD

20

30

3.6 Continued

consumption of sawnwood (434 million m3) consisted of sawn softwood, and this was the main type of sawnwood used in the northern hemisphere regions. On the other hand, more sawn hardwood was used than softwood in the other regions, notably in Other Asia-Pacific where it made up over three-quarters of total sawnwood consumption. 68

69

1750

190

3.2

75

19

0.4

85.5 12.4 30.1 42.9

50.6 0.4 19.1 23.9 7.1 2.7 4.4

166.0 137.1 28.9

N. America

57

17

1.0

79.3 10.5 26.4 42.7

47.6 2.1 6.2 31.6 7.4 4.9 2.5

96.0 79.4 16.9

Europe

c

b

Medium density fibreboard Hardboard and insulating board Wood used in unprocessed form, e.g. pitprops, poles, pilings, posts. Production data Source: FAO database

a

FUELWOOD (m )

3

WOOD IN THE ROUGH (m )

3

286.3 36.1 87.5 162.8

PAPER & PAPERBOARD (mt) Newsprint Printing & writing Other paper & paperboard

c

155.3 6.1 54.9 69.2 25.1 12.2 12.9

WOOD-BASED PANELS (m3) Veneer sheets Plywood Particle board Fibreboard MDFa Otherb

DISSOLVING PULP (mt)

434.8 313.8 121.1

WORLD

Apparent consumption of wood products by region, 1997

SAWNWOOD (m3) Sawn softwood Sawn hardwood

Table 3.4 East Asia

55

39

0.1

3.2 0.6 0.6 2.1

3.3 0.2 0.4 2.0 0.7 0.2 0.5

18.6 14.1 4.4

205

41

0.5

77.0 7.3 20.3 49.5

37.9 1.6 21.9 7.1 7.2 3.4 3.8

64.4 49.3 15.1

(million units)

Former USSR

680

34

0.6

19.8 2.9 5.4 11.2

8.8 0.9 4.7 2.0 1.3 0.6 0.7

44.6 11.0 33.7

Other Asia-P

454

31

0.3

4.2 0.5 1.2 2.6

2.0 0.4 0.7 0.9 0.3 – 0.3

11.4 6.2 5.1

Africa

224

9

0.3

17.2 1.9 3.5 11.8

5.1 0.5 1.9 1.7 1.1 0.4 0.7

33.8 16.7 17.0

Lat. America PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

THE INTERN ATION AL TIMBER TRADE

Of the world total of wood-based panels consumption of 155 million m3 in 1997, particle board’s share was the largest with 45%, followed by plywood with 35%, fibreboard with 16% and veneer sheets with 4%. Particle board’s share of the total is the largest in North America – where it has only recently overtaken plywood – Europe and the former USSR, while plywood holds the largest share in East Asia (58%), Other Asia-Pacific and Latin America. MDF accounted for 49% of total fibreboard consumption in 1997, a share which has increased from virtually nothing a decade or so ago and which continues to rise each year. Ninety per cent of all fibreboard was used in the four northern hemisphere regional groups; its use in the southern hemisphere is relatively restricted, except in a few countries such as Argentina, Brazil, Australia and New Zealand. Consumption of paper and paperboard was described in detail in The International Paper Trade (Bolton 1998) and need not be dealt with again here, apart from noting that out of the total world consumption of 286 million tonnes in 1997 so-called cultural or graphic grades (newsprint and other printing and writing paper) accounted for over two-fifths, and other grades for nearly three-fifths, of which the largest share was packaging and wrapping paper and paperboard with one-third of total paper and paperboard use. Also shown in Table 3.4 is the quite modest consumption of dissolving pulp, some 3 million tonnes in total, which is used particularly in the production of rayon. The figures for wood used in the rough for such purposes as pitprops, poles, pilings and posts are those of production, since no separate data of trade exist and hence apparent consumption figures cannot be calculated. However, the volumes entering trade are not very large and so the production figures give a reasonable idea of the volumes being used in each of the regional groups. Use is in fact more evenly distributed over the regions than that of the processed products, even if it is not concentrated in the southern hemisphere regions in the way that it is for fuelwood. More than three-quarters of the world total of fuelwood is used in the three southern hemisphere regions, compared with 21% of sawnwood, 10% of wood-based panels and 14% of paper and paperboard. It should be mentioned in passing that, given the difficulties of measuring the production and use of fuelwood, reported data should be considered as approximations.

Consumption of wood products per inhabitant The contrasts in the intensity of use of wood products between country groups are illustrated in Fig. 3.7 with data of consumption per capita. For the processed products, per capita consumption in North America is 70

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS 76

WORLD

567

North America 169

Europe 64

Former USSR

SAWNWOOD (m3)

East Asia

46

Other Asia-Pacific

23

Africa

16

Latin America

70

27

WORLD North America

173

Europe

84 11

Former USSR East Asia

WOOD-BASED PANELS (m3)

27

Other Asia-Pacific

5

Africa

3

Latin America

11

50

WORLD North America

292

Europe

140

Former USSR

11

East Asia

PAPER AND PAPERBOARD (mt)

55

Other Asia-Pacific

10

Africa

6

Latin America

36 0

100

200

300

400

500

3

(m or mt per 1000 capita)

3.7 Per capita consumption of main wood product groups by region, 1997 (source: FAO database).

71

600

THE INTERN ATION AL TIMBER TRADE WORLD

701

North America

2773

Europe

1094

Former USSR

495

East Asia

489

Other Asia-Pacific

445

Africa

716

Latin America

729 0

500

1000

1500 2000 (m3 EQ per 1000 capita) Processed

2500

Unprocessed

3.8 Per capita consumption of wood products in total, 1997 (source: FAO database).

generally 6 to 7 times higher than the world average and in Europe 2 to 3 times. In the other groups per capita consumption is below the world average, the low levels being particularly marked in Africa. In the case of wood used in the round, of which about 90% consisted of fuelwood, the highest levels of per capita consumption were in Africa with more than double the world average, followed by Latin America and Other Asia-Pacific, the lowest in Europe, East Asia and former USSR with half or less of the world average. Figure 3.8 shows the per capita consumption of wood products in total, including fuelwood and other wood used in unprocessed form, expressed in cubic metres equivalent volume of wood in the rough (m3 EQ). At the global level, as well as in the former USSR, about as much wood was consumed in 1997 in unprocessed form, mainly as fuelwood, as in processed form, but the shares of the two categories vary considerably from region to region. Most wood was used in processed form in North America and Europe; most in unprocessed form in the southerly regional groups. Total consumption of wood in all forms in North America was nearly four times above the world average, while in Europe, Africa and Latin America it was somewhat above the average and in the former USSR, East Asia and Other Asia-Pacific it was appreciably below it. As an over-simplification it may be said that the volume per capita of unprocessed wood used tends to decline with rising living standards and that of processed products to increase.

72

3000

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

Uses of wood products Ways of assessing the end-uses of wood There could be, as mentioned earlier, as many as five thousand articles or elements made out of wood; and as many ways of using them. Let us leave it to someone else to try and list them. For those involved in the market, whether as producer, trader, wholesaler or retailer, it is more important to have a good idea of what kinds of wood products are used for what purposes. There are two ways of looking at this. A broad approach is to assess the share of consumption by the various end-use sectors in terms of the wood raw material, including recycled material. The more detailed approach is to assess the end-uses of the individual wood products, the more specific the details regarding the end-uses and the specifications of the wood product used the better. The latter approach is more useful from the market practitioner’s point of view and in any case provides the basis for calculating the former. The problem is that the demand for information on end-uses always seems to be far ahead of its availability, mainly because of the cost and difficulty of collecting it, especially the finer details. No doubt there are some companies that have undertaken detailed studies of the end-uses of their products, but such information is commercially valuable and seldom becomes public knowledge. Efforts have been made in some countries to collect information on end-uses at the national level and this information has been shared at the international level, but it tends to be dated and lacking in detail. Indeed, there seems to be a dearth of recently collected end-use data, and the published figures which are quoted below date from the 1970s and 1980s and relate to Europe and the United States only. Six broad end-use sectors can be distinguished: energy, construction, packaging, furniture, cultural or graphic uses, and miscellaneous. Wood for energy is mostly in the form of fuelwood, which is mainly used in the developing countries and is the main source of energy (cooking and heating) in many of them. Industrial wood used in the rough is mostly used in construction (building poles) and for miscellaneous uses, such as pitprops, telegraph poles, agricultural posts and stakes, and so on. Sawnwood and wood-based panels are used in construction, packaging, furniture, and other miscellaneous objects; paper and paperboard for packaging, cultural or graphic uses, household and sanitary uses, and in many miscellaneous ways. In order to demonstrate the variety of purposes to which sawnwood and wood-based panels can be put, their end-uses will be discussed in detail in the following section.

73

THE INTERN ATION AL TIMBER TRADE Table 3.5 Estimated importance of different end-use sectors for sawnwood and wood-based panels in European countries around 1980 Construction

Furniture

Packaging

Other

(% of total consumption of each product) Sawn softwood Sawn hardwood Plywood Particle board Hardboard Insulating board

62–92 20–73 12–65 8–70 20–84 71–100

3–10 15–40 10–40 20–90 6–41 –

2–14 2–30 5–25 1–3 2–20 –

2–22 3–22 7–22 1–20 1–28 2–29

Source: UN-ECE/FAO 1986

End-uses of sawnwood and wood-based panels Construction is the predominant end-use sector for both sawnwood and wood-based panels in most countries (UN-ECE/FAO 1986). Its importance varies considerably from country to country and product to product as the figures for Europe in Table 3.5, which relate to the period around 1980, show. The variations between countries may be due to several factors, such as traditions and preferences in wood use, the composition of countries’ forest resource, trade patterns, and the structure of countries’ woodprocessing industries, among others. For example, construction is a particularly important end-use of sawn softwood in the Nordic countries (and also in North America and the former USSR), because of the traditional prevalence of timber-frame construction there for family dwellings and the predominance of coniferous (softwood) species in their forest resources. In all European countries, more than a half of all sawn softwood went to the construction sector in the period around 1980. Packaging appears as the second main end-use sector of sawn softwood, though well behind construction, and it is followed by furniture. The utilisation of sawn hardwood is less markedly centred on the construction sector than that of sawn softwood, reflecting the greater diversity of sawn hardwood, which between temperate-zone and tropical species comprises a very wide variety of properties making it suitable for many different end-uses. For Europe as a whole, construction and furniture may have held roughly equal shares in 1980 – perhaps around 30% each – with packaging, in which pallets accounted for a significant part, holding somewhat less. For plywood, construction accounted for a half or more of total consumption in most European countries, although it was of relatively little 74

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

importance in eastern European countries. Packaging, including transport, was the second sector in importance, followed by furniture. Plywood seems to have been rather susceptible to substitution by other wood products, for example by particle board in furniture, and by OSB and other wood-based panels in construction, including concrete shuttering and wall panels (sheathing). Construction and furniture are the predominant end-use sectors for particle board, but which one holds the greater share varies from country to country according to user preferences and traditions. Definitions may also play a part, for example they can depend on whether built-in cupboards are included under construction or furniture. Other end-uses, such as packaging, transport, ship- and boat-building and do-it-yourself (D-I-Y) are generally of lesser importance. Considerable variations exist between countries in the end-use patterns of hardboard, although construction appeared to be the most important around 1980, followed by furniture. For insulating board, construction is the predominant use sector, although the volumes have been in decline over many years. MDF was a newly introduced product around 1980, but since then its use has expanded dramatically in both the construction and furniture sectors, largely at the expense of sawnwood and particle board. Table 3.6 shows estimates of the end-use patterns for a number of European countries and the variations that exist between one and another. In the countries in the table, either construction or furniture is the predominant use. For particle board, there is a marked contrast between the Nordic countries, where most particle board was used in construction, although that may have become less evident since the 1980s, and other European countries, where it was mostly used for furniture. A somewhat similar contrast existed for hardboard. Other (or miscellaneous) end-uses cover a vast array, ranging from boats to household utensils, brushes, toys, pencils, musical instruments, and so on. Some of them are quite big users of wood products, ship- and boatbuilding and road and rail transport vehicles for instance; others use only small quantities but may have high added value, such as carvings and other decorative items. The uses can take advantage of the incredible variety of properties between species, for example a specific gravity of more than 1 for lignum vitae, used in bowling ‘woods’ and pulley blocks, and of less than 0.4 for balsa, used for model airplanes. Some woods are prized for their decorative values, such as walnut, mahogany, rosewood and ebony, used in high-quality furniture, cabinet-making and marquetry. Some are valued for their durability and resistance to insect attack, such as greenheart, iroko and opepe, much used for harbour works. Others are classed as utilitarian woods, which are relatively cheap, in ample supply, are not outstanding from 75

THE INTERN ATION AL TIMBER TRADE Table 3.6 Estimated broad end-use patterns of sawnwood and wood-based panels in selected European countries around 1980 Construction Country Sawn softwood Finland France Italy Poland Portugal Sweden United Kingdom

Year

Furniture

Packaging

Other

(% of total consumption of each product)

1980 1979 1979 1980 1980 1980 1977/80

65 81 82 62 92 75 70

10 4 5 8 3 5 3

14 12 10 8 2 10 13

21 2 3 22 3 10 14

1979 late 1970s 1979 1980 1981

37 25 20 73 32

31 30 40 22 40

26 25 30 2 6

6 20 10 3 22

Plywood Finland Italy Polanda Sweden

1976 1979 1980 ..

60 45 14 58

13 13 25 15

5 25 29 20

22 17 32 7

Particle board Finland Italy Norway Poland Portugal

1982 1979 1980 1980 1980

70 8 58 8 10

20 90 20 79 87

b

10 1 20 12 3

Hardboard Finland Poland Portugal Sweden United Kingdom

1980 1980 1980 1982 1981

84 20 45 75 38

10 41 35 6 32

Sawn hardwood France Germany (West) Italy Portugal United Kingdom

1 b

1 b

5 11 7 8 2

1 28 13 11 28

a

Veneer plywood only Included in ‘Other’ Source: UN-ECE/FAO 1986

b

the decorative point of view, and are suitable for everyday uses in construction, packaging, invisible parts of furniture, mass production furniture, and so on. The same species may, however, be used in different ways, depending on its grading. For example, high grades of European redwood 76

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

(Scots pine) are popular for furniture making and joinery, medium qualities for general construction purposes, and lower qualities for packaging or conversion into chips for processing for woodpulp or particle board manufacture. Impregnation or surface treatment of woods can alter their properties, for example by improving their resistance to fire, disease or insect attack, or increasing their durability or hardness or attractiveness. Combination with other materials can extend the use of wood in numerous ways, the most obvious example being gluing, not only for the production of plywood by gluing veneer sheets and of particle board by gluing chips, but also laminated solid wood structures and other elements used in timber engineering. Table 3.7, even though partly out of date, provides a quite comprehensive listing of the range of uses of sawnwood and wood-based panels in building. Substitution is taking place all the time, sparked by technological, economic and even environmental factors. One area where it has been particularly marked is for window frames, where sawnwood has been partly replaced by plastics and aluminium, which have certain advantages, such as requiring less maintenance, and were even alleged to be more environmentally friendly until the environmentalists belatedly acknowledged some less positive aspects, such as the relatively high energy input required in their manufacture, lower insulation properties and the non-renewable sources of their raw materials. In this regard, the role of marketing and promotion, fields in which the wood products industries have often not been as active as their competitors, even when it comes to drawing attention to the environmentally friendly features of their products, has been an important factor in the market place. Another sector where changes in the use of materials have been particularly marked in recent decades is packaging. Substitution has taken place within the wood products family, for example of solid wood by paperboard, and also from outside it, notably by plastics and metals. Not only have there been major developments in new packaging materials and methods, but ways of handling, transporting, storing and distributing goods have changed tremendously over recent decades. Despite these changes, and in some cases because of them, sawnwood and wood-based panels remain important packaging materials in certain sectors, for example crates for engineering equipment, and the use of packaging and wrapping paper and paperboard has continued to expand. Information on the United States of America is available in a form which illustrates the breakdown of the use of wood products between three main sectors of construction, new housing, residential upkeep and improvements, and new non-residential construction (Table 3.8). New housing was the most important sector of the construction market in 77

THE INTERN ATION AL TIMBER TRADE Table 3.7 Uses of sawnwood and wood-based panels in building in the 1970s in Europe

End-use

Wood products most used

Structural uses Roof structures

Sawn softwood Wood-based panels Glue-laminated structures

Floor structures

Sawn softwood Wood-based panels

Load-bearing wall members

Sawn softwood Wood-based panels

Joinery Windows and shutters

Sawn softwood

Doors Partition walls Exterior walls

Sawn hardwood Sawnwood, w-b. panels Sawnwood, w-b. panels Sawnwood, w-b. panels

Exterior wall facing Built-in furniture

Sawnwood, plywood, fibreboard W-b. panels, sawnwood

Stairs

Sawnwood

Joinery trim Floor surfaces

Sawnwood Sawnwood (esp. hardwood), plywood, particle board

Ceiling and internal wall coverings

Sawnwood, w-b. panels

Temporary site uses Concrete formwork

Sawnwood, w-b. panels

Scaffolding boards Partitions on site

Sawnwood Wood-based panels

Source: UN-ECE/FAO 1976

78

Remarks

Concentrated in low-rise dwellings Sheathing material for under-roofing Used increasingly, especially for spans over 20 m Joists and boards in low-rise dwellings Replacing sawnwood as flooring boards Very important in timber-frame buildings Used as sheathing Stiff competition from metals and plastics Ditto

Often as prefabricated elements Used mostly in wood-frame buildings Expanding. Much particle board used Wood confined to low-rise buildings Apparently declining Downward trend in softwood use, less marked for hardwood Has decreased, but still used in decorative applications, especially in public buildings Major end-use for sawnwood, also plywood, increasingly for OSB

79

16 2 16 16

Residential upkeep and improvements TOTAL CONSTRUCTION

10 13 9 8

Source: Burdin, N., 2000 (personal communication)

48 16 9 27 –

Construction

25 9 6 19 –

Repair of buildings & structures Furniture

Packaging

73 25 15 46 –

3 27 76 16 –

17 5 – 7 38

(% of total consumption of product)

TOTAL CONSTRUCTION

71 23 66 50

5 4 2 7 –

Machinebuilding

6 27 7 26

Manufacturing

(% of total consumption of product)

New nonresidential construction

Share of wood products by end-use in the Russian Federation in the late 1990s

Sawnwood Plywood Particle board Fibreboard Paper & paperboard

Table 3.9

b

Particle board and hardboard Included in ‘Other’ Source: USDA Forest Service 1982

a

45 8 40 26

New housing

Share of wood products by end-use in the USA in 1976

Sawn softwood Sawn hardwood Plywood Other panelsa

Table 3.8

– – – – 62

Printing & writing

b

10 45 4

Packaging

3 39 7 23 –

Other, including mining

13 5 23 24

Other

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

THE INTERN ATION AL TIMBER TRADE

1976 for the use of sawn softwood (softwood lumber in North America) and wood-based panels, but for sawn hardwood (hardwood lumber) it was new non-residential construction. Seventy-one per cent of all sawn softwood was used in construction, two-thirds of plywood and half of particle board and hardboard. Forty-five per cent of all sawn hardwood was used in packaging (termed ‘shipping’ in the USDA Forest Service report); pallet-making was very important for the use of sawn hardwood, particularly for the lower grades. The manufacturing sector, which took more than a quarter of the sawn hardwood and particle board and hardboard consumption, included furniture-making as its main component. Apart from the large use of sawn hardwood in packaging and its relatively small use in construction, the pattern of end-uses in the USA was not greatly different from that in Europe. The end-use pattern reported in the Russian Federation shows that nearly three-quarters of all sawnwood (softwood and hardwood combined), went into construction in the late 1990s. This was also the main end-use of fibreboard. On the other hand, only 15% of particle board was used in construction, but three-quarters of it in furniture (Table 3.9).

End-uses of paper and paperboard Reference is again made to the sister publication, The International Paper Trade by Tom Bolton (1998) for detailed information on the uses of paper and paperboard. It is necessary here only to summarise the main end-uses, which to a considerable extent are self-explanatory from the names given to the various grades (Table 3.10). ‘Wood free’ paper contains less than 10% of mechanical or thermomechanical pulp, as distinct from ‘wood containing’ with more than 10% of these pulps. Certain grades of paper and paperboard are being produced which use increasing quantities of recycled waste paper, notably linerboard, fluting medium, folding boxboard, newsprint and some printing and writing grades. In the field of graphic papers, competition from other means of communication, above all television and electronic communication, is changing the relative importance of different outlets for paper. For example, national newspapers have tended to stagnate, while regional and free distribution papers continue to grow. Similarly, general interest magazines face tough competition from other forms of media, especially television, but conversely the latter actually seem to stimulate demand for specialist magazines. The dramatic increase in the use of computers and the internet could, theoretically, displace the need for paper in the office, but up to now and probably for some time to come the effect has been the reverse: the ‘paperless office’ 80

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS Table 3.10

Paper and paperboard grades by end-uses

End-uses Graphic papers Newspapers Magazines

General advertising Direct mail/mail order Office papers Books Others (writing and scholastic, telephone directories, stationery, labels, etc.) Packaging paper and paperboard Shipping cases & display packs Consumer goods packaging Sack & bag paper, others Household and sanitary papers Toilet tissue, towels, facial, serviettes in home and awayfrom-home use, including hospital and medical products

Paper and paperboard grades used

Newsprint for body of newspaper, lightweight coated papers (LWC) for supplements Supercalendered paper (SC) for mass circulation magazines, LWC and some coated wood free for special interest magazines Coated wood free is most commonly used; also other grades LWC Uncoated wood free Uncoated mechanical and all wood free Mainly uncoated mechanical and wood free

Linerboard and fluting medium Folding boxboard (includes liquid packaging board) Kraft wrapping and other packaging paper & paperboard

Cellulose wadding, soft tissue, towel and crepe paper

Source: UN-ECE/FAO 1986

remains a vision of the future. Book reading could also become less popular, but there is not much sign of that happening yet. In the packaging field, environmental concerns, such as the problems of waste disposal, have put pressure on the use of all types of packaging material, including paper and paperboard, but up to now the market for the latter has continued to expand. The above comments are very general, and take no account of different stages in economic and social development in different countries. In the advanced economies, many of which are experiencing slow or zero population growth, there are signs of saturation in the markets for paper and paperboard. On the other hand, in emerging and developing countries, per capita consumption is still low, and there remains considerable scope for expansion in the use of most grades of paper and paperboard. 81

THE INTERN ATION AL TIMBER TRADE Table 3.11 An approximate estimate of global wood products consumption by main end-use sector in the mid-1990s Energy Product groups All wood products Fuelwood Sawnwood & panels Paper & paperboard Other wood products

Total

All other uses Construction

Packaging

Graphic uses Furniture Miscellaneous

(% of volume of wood in the rough of total or of all other uses)

100

46

54

17

15

10

4

–

– 100 100

– 100 –

100 – 100

31 – 57

28 – 17

18 – –

7 – 16

16 – 10

100

–

100

1

44

41

–

14

100

–

100

45

–

–

–

55

General pattern of end-uses of wood products It is impossible to obtain a reliable picture of the end-use pattern of wood products at the global level from the fragmented and often out-dated information available at the national or regional levels. The figures given in Table 3.11 should therefore be treated with the utmost caution and are offered as one person’s informed ‘guesstimate’. Almost half of the total world consumption of wood, when expressed in terms of the equivalent volume of wood in the rough (m3 EQ) is used for energy. In fact, if the volumes of industrial and post-consumption wood residues, pulping liquors and waste paper that are also used for energy are included, energy would account for well over half the total volume of wood removed from the forest at the world level. Even in Europe, where the use of fuelwood is nowadays not very important, the volume of wood used for energy, including residues, pulping liquor and waste paper, is still equivalent to 45% of the volume of annual wood removals (UN-ECE/FAO 1996). Excluding fuelwood from the calculation, it is estimated that construction, packaging and graphic and cultural uses are, in that order, the most important end-use sectors for wood products, accounting between them for more than three-quarters of the total, with furniture and miscellaneous uses accounting for the remainder. Packaging is the only sector that is important for both sawnwood and wood-based panels and for paper and paperboard. Construction, according to the estimates, takes more than half of all sawnwood and wood-based panels. Packaging and graphic uses account for more than two-fifths each of the consumption of paper and paperboard. ‘Other wood products’ includes both wood used in the rough 82

PRODUCTION AND CONSUMPTION OF WOOD PRODUCTS

and dissolving pulp. Building poles are a major use of the former, especially in developing countries; such uses as pitprops, telegraph poles and agricultural posts (fencing, etc.) and stakes are included under ‘miscellaneous’. As stated earlier, not enough is known about the end-uses of wood products to allow a detailed and comprehensive analysis to be made. It is hoped that what has been compiled in this section is enough to give a useful general impression of what products are used where and in what proportions. Research efforts are currently being made to improve the information in this area, but they are time-consuming and costly.

83

CHAPTER

4 The place of wood industries and wood products in the global economy

W

e have seen in the previous chapter the impressive quantities of wood products that enter the world market each year. Are they enough to make the forest and wood industries sector an important component of the world economy? Are wood products major elements in international trade? ‘Important’ and ‘major’ may be imprecise and subjective terms, but nonetheless this chapter will attempt to address these questions, using as a basis data published by various international organisations.

Wood industries in national economies Sectors within the national economies National economies are amazingly complex, but are for simplicity divided into three sectors: the primary sector, covering agriculture, fisheries and forestry, as well as mining, quarrying, crude oil production and so on; the secondary sector, covering manufacturing; and the tertiary sector, covering services. In less developed economies, the primary sector is of particular importance, while in the most advanced economies the tertiary sector has 84

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

become of major significance. In virtually all countries, the tertiary sector has been gaining in relative importance at the expense of the other two sectors. Forestry activities, including the management of the forest resource and the harvesting of wood and other products, fall within the primary sector. It is not always possible to separate them in the statistics from agricultural activities, with which they are often closely integrated. The woodprocessing industries comprise one among numerous manufacturing groups that make up the secondary sector. In the statistics they can usually be identified under two categories: wood and its manufactures; and paper and paperboard and their manufactures. Care has to be taken in using the statistics, however, since in some series they are aggregated with other activities, for example wood industries with furniture manufacturing, and paper and paperboard with printing and publishing. For this and other reasons, it is not easy to show precisely the relative importance of the woodprocessing sector in national economies or in overall manufacturing. It is hoped that what follows will be enough to give a broad impression of its place.

Share of the wood industries in Gross Domestic Product In the statistics published by the Organization for Economic Cooperation and Development (OECD), furniture manufacturing, presumably of wood as well as other materials, is included with wood and wood products; and printing and publishing with paper and paper products. Both furniture and printing and publishing are important areas of activity, so the figures in Table 4.1 overstate the importance of the wood-processing sector in countries’ Gross Domestic Product (GDP). On the other hand, some ancillary activities of the wood-processing sector are probably included in other sectors, for example construction. In most of the OECD countries for which data are available, the woodprocessing sector, including furniture and printing and publishing, accounts for between 2 and 3% of total GDP. In the less developed countries, such as Mexico and South Korea, which incidentally are also countries with sizeable wood products imports, the percentage is less, while in such major exporting countries as Finland and Sweden it is appreciably higher – 6.1 and 4.6% respectively. These figures do not include the share of forestry and logging. A share of 2 or 3% may not seem very substantial, until it is pointed out that in most countries the whole of manufacturing accounts for 20% or less of total GDP. Table 4.2 shows the composition of GDP in four very different countries. The USA is the largest as well as probably the most diversified 85

86

1996 1996 1995 1996 1996 1993 1992 1995 1996 1993 1994 1994

1993 1996 1996

1996 1994 1995

Austria Belgium Denmark Finland France Germanya Italy Netherlands Norway Portugal Spain Sweden

Canada Mexico USA

Japan New Zealand South Korea

Western Länder only Source: OECD, National Accounts,Vol. II, 1998

a

Year

Country

.. 1.51 ..

0.70 0.20 ..

.. .. 0.09 2.11 0.22 0.19 0.05 .. 0.25 0.78 .. 1.16

Forestry & logging

.. 1.38 0.17

1.20 0.48 0.84

1.09 .. 1.09 1.04 0.62 0.97 1.17 0.46 0.43 0.93 0.63 1.12

Wood & wood products, including furniture

0.72 2.56 1.23

1.86 0.85 2.01

1.62 1.26 2.12 5.07 1.54 1.25 1.34 2.00 1.83 1.22 1.17 3.45

(% of total GDP)

Paper & paper products, printing & publishing

.. 5.45 ..

3.76 1.53 ..

.. .. 3.30 8.21 2.38 2.41 2.56 .. 2.51 2.93 .. 5.73

Total forestry, wood & paper etc.

.. 3.94 1.40

3.06 1.33 2.85

2.71 .. 3.21 6.11 2.16 2.22 2.51 2.46 2.26 2.15 1.80 4.57

Wood & paper, etc. excluding forestry

Table 4.1 Share of forestry, wood and paper industries in selected countries in total Gross Domestic Product (GDP) at current prices

THE INTERN ATION AL TIMBER TRADE

87

Source: OECD, National Accounts,Vol. II, 1998

1.79 1.56 18.18 1.91 0.78 0.84 2.01 3.25 0.45 0.69 7.91 0.34 2.85 4.20 16.78 5.94 28.57 11.46 92.79 7.21 100.00

USA 1996

3.13 2.56 17.80 3.14 0.42 0.46 2.00 4.90 0.65 0.66 5.21 0.37 1.75 4.95 14.18 6.62 23.37 10.58 84.95 15.05 100.00

1.98 0.27 19.64 2.03 0.34 1.12 3.45 2.57 0.47 1.05 8.45 0.16 2.72 4.85 9.86 5.88 21.38 3.99 70.57 29.43 100.00

Sweden 1994

(% of total GDP)

Netherlands 1995

5.58 1.43 19.76 5.05 1.56 0.48 0.85 3.26 1.29 1.20 5.78 0.29 1.07 3.81 19.74 9.34 15.87 12.45 91.84 8.16 100.00

Mexico 1996

Share of wood and paper industries in total GDP in selected countries compared with other components of GDP in the mid-1990s

Agriculture, forestry and fishing Mining, quarrying, crude oil production, etc. Manufacturing (total) • Food, beverages & tobacco • Textiles, wearing apparel & leather industries • Wood & wood products, incl. furniture • Paper & paper products, printing & publishing • Chemicals, coal, rubber & plastic products • Non-metallic products, excl. products of petroleum & coal • Basic metal industries • Fabricated metal products, machinery & equipment • Other manufacturing industries Electricity, gas & water Construction Wholesale & retail trade, restaurants & hotels Transport, storage & communications Finance, insurance, real estate & business services Community, social & personal services Total industries Government services & miscellaneous Total Gross National Product

Table 4.2

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

THE INTERN ATION AL TIMBER TRADE

economy in the world; the Netherlands is an example of a large wood products importer; Sweden of a large wood products exporter; and Mexico of a less developed country. In all of them except Sweden, the sector of finance, insurance, real estate and business services has the largest share of GDP, followed by community, social and personal services in the USA and the Netherlands, and transport, storage and communications in Mexico. In Sweden, where the welfare state is well established, Government services are particularly important. Combining wood and wood products, including furniture, and paper and paper products, printing and publishing, their share of total manufacturing in the USA is 15.7%, slightly less in the Netherlands (13.8%), and appreciably higher in Sweden (23.3%). In Mexico, their share is only 6.7%, while that of certain ‘traditional’ industries, such as food processing (food, beverages and tobacco) and textiles (textiles, wearing apparel and leather industries), is higher than in the more developed countries. In all four countries, the most important manufacturing sector is fabricated metal products, machinery and equipment, followed by chemicals, and coal, rubber and plastic products, except in Sweden where the woodprocessing sector is in second place. In the USA it is in third place, in the Netherlands in fourth place after food processing. What can be deduced from the figures in Tables 4.1 and 4.2? Firstly, that the wood and paper industries’ share of the overall economy in many countries is between 2 and 3% of GDP, with the percentages being appreciably higher in those where wood products exports are of particular importance in the economy. The percentages are swelled by the inclusion of the printing and publishing industries, but this is at least partly offset by the exclusion of forestry and logging and activities involving wood products in other sectors, such as construction, transport, toys and musical instruments. The importance of the wood-processing sector becomes more apparent when its share of total manufacturing is considered.

Share of wood industries in total manufacturing output Among the countries shown in Table 4.3 the share of wood industries, including furniture, in total manufacturing output is highest in Finland with 24.1% and lowest in China, the Philippines and Thailand with 3.6%. In most of the countries that are important wood products exporters, the share is more than 10%, the Russian Federation being one exception with only 4.3%. Among the larger economies, such as Japan, France and the United Kingdom, which are not only major importers but also sizeable exporters of wood products, the wood industries’ share of total manufacturing is within the 5

88

89 0.93 1.62 2.80 6.65 4.55 0.82 1.16 12.55 1.58 3.39 3.79

1996 1995

1994 1996 1995 1995 1994

1996 1996

1994 1995

Source: UNIDO International Yearbook of Industrial Statistics 1999

1.64

4.97 5.10 1.62 4.12 3.29 4.61 2.11 1.25

1995 1996 1995 1995 1996 1995 1995 1995

1996

4.98

1995

Year

Wood products, excl. furniture

Paper and products

3.16 0.75

0.04 1.48

0.24 1.05 1.08 0.51 0.41

0.51 0.95

0.81

.. 1.22 1.30 1.86 3.72 1.61 3.16 1.63

1.81

3.01 7.69

3.12 4.88

2.09 3.86 1.34 2.28 2.03

2.20 2.76

1.90

5.15 17.80 3.10 6.37 2.25 4.56 1.27 3.25

8.40

(% of total manufacturing output)

Furniture & fixtures, excl. metal

Share of wood industries in total manufacturing output in selected countries in the mid-1990s

North America Canada Europe Austria Finland France Norway Poland Portugal Romania United Kingdom Former USSR Russian Federation East Asia China Japan Other Asia-Pacific India Indonesia Malaysia Philippines Thailand Africa Cameroon South Africa Latin America Brazil Chile

Table 4.3

9.56 12.23

15.71 7.94

5.13 11.56 6.97 3.61 3.60

3.64 5.33

4.35

.. 24.12 6.02 12.35 9.26 10.78 6.54 6.13

15.19

TOTAL

6.40 11.48

15.67 6.46

4.89 10.51 5.89 3.10 3.19

3.13 4.38

3.54

10.12 22.90 4.72 10.49 5.54 9.17 3.38 4.50

13.38

TOTAL, excl. furniture WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

THE INTERN ATION AL TIMBER TRADE

to 7% range, which is probably a fair indication of the average worldwide; unfortunately no data are available from UNIDO of the largest economy, the United States. This share places the wood industries among the most important manufacturing sectors. The shares of the industries producing wood products, excluding furniture and paper and products, range from 5.1% in Finland and 5% in Canada to 0.8% in the Philippines, but in two countries it is significantly above this range: in Cameroon 12.5% and Indonesia 6.6%. The range for paper and products is much wider, from 17.8% in Finland to 1.3% in Malaysia. Furniture manufacturing accounts for more than 3% in three countries, Poland, Romania and Brazil.

Wood products in international commodity trade According to UN statistics (UN 1997), the value of world trade in commodities in 1995 was approximately 5 thousand billion US dollars (Table 4.4); and according to FAO (FAO 1999), the value of trade in wood products was around 150 billion dollars. The products covered by the FAO statistics include wood raw material, sawnwood, wood-based panels, woodpulp, paper and paperboard and recovered (waste) paper, but not added-value wood products or cork and its derivatives. World trade in 1995 in the products covered by FAO makes up about 3% of total commodity trade. At the regional level, exports of wood products from North America and the former USSR account for appreciably larger shares of total commodity exports than the world average (5.9 and 4.2% respectively), and those of East Asia for much less (0.6%). For imports, the 3.9% share of wood products in East Asia’s total commodity imports is higher than the world average of 3%; the shares in the former USSR and Other Asia-Pacific are lower (0.4 and 1.9% respectively). The proportion of wood products covered by the FAO statistics in total commodity trade in twelve of the leading wood product exporting and importing countries is shown in Table 4.5. It is striking that the range of shares is very much wider among the exporting than the importing countries. In several countries, including Finland, Canada, Sweden and Indonesia, wood products account for an important part of total exports – as much as 30% in the case of Finland – but for a very small share in others – less than 1% in China. Countries with a large share of wood products in total exports are among those with a large forest resource and/or woodprocessing base, at least in relation to their population or domestic consumption of wood products. However, according to that criterion one might expect some other countries, such as Malaysia, the Russian Federation and 90

147.7 46.1 66.7 4.9 6.4 14.3 2.9 6.5

Exports of wood products (billion US$)

91

2.9 5.9 2.9 4.2 0.6 2.5 2.8 2.9

Per cent of total exports (%) 5125.7 939.4 2230.9 96.6 896.5 598.2 119.3 244.8

Total imports (cif) (billion US$) 153.0 25.5 71.2 0.4 35.2 11.6 3.1 6.0

Imports of wood products (billion US$)

192 197 584 743 39 573 79 908 511 771 286 694 45 417 74 045 58 100 81 137 434 348 46 506

27 817 18 276 11 973 11 598 10 637 5 867 5 008 4 225 4 156 4 060 3 362 3 202

Exports of wood products (million US$) 14.5 3.1 30.3 14.5 2.1 2.0 11.0 5.7 7.2 5.0 0.8 6.9

Per cent of total exports (%)

Sources: UN Handbook of International Trade and Development Statistics 1995 FAO database

Canada USA Finland Sweden Germany France Indonesia Malaysia Austria Russian Fed. China Brazil

Total exports (fob) (million US$) USA Japan Germany China United Kingdom Italy France Netherlands South Korea Belgium-Lux. Spain Canada

IMPORTING COUNTRIES

770 958 335 882 448 132 425 458 263 760 204 062 274 972 176 123 135 119 154 206 114 831 168 426

Total imports (cif) (million US$)

22 496 19 486 14 240 10 740 9 349 8 669 8 232 5 195 4 980 4 111 3 834 2 997

Imports of wood products (million US$)

Total trade and trade in wood products in 12 leading wood products exporting and importing countries in 1995

EXPORTING COUNTRIES

Table 4.5

Sources: UN Handbook of International Trade and Development Statistics 1995 FAO database

5075.1 776.9 2291.7 115.5 1002.5 561.6 102.7 224.2

Total exports (fob) (billion US$)

Total trade and trade in wood products in 1995, by region

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Table 4.4

2.9 5.8 3.2 2.5 3.5 4.2 3.0 2.9 3.7 2.7 3.3 1.8

Per cent of total imports (%)

3.0 2.7 3.2 0.4 3.9 1.9 2.6 2.5

Per cent of total imports (%)

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

THE INTERN ATION AL TIMBER TRADE

Brazil to have a larger percentage of wood products in exports than they do, even if it is well above the world average. The range in the share of wood products in total imports is more restricted, from 5.8% in Japan and 4.2% in Italy to 1.8% in Canada.

Share of wood products, including value added products, in total trade Figures are available at the country level, but not at regional or global level, of the value of trade in wood and paper products, including manufactures. These are shown for 20 of the leading exporting countries in Table 4.6 and importing countries in Table 4.7. For both exports and imports, the aggregates of the 20 countries show that wood products, in this expanded sense, accounted for about 4.4% of total commodity exports in 1995. The countries shown probably made up 85% or more of world exports and imports of wood products, and so may be considered to be reasonably representative of the global picture. The inclusion of the manufactures of wood and paper products, i.e. those with added value, adds approximately 50% to the value of the products covered by the FAO statistics. Regarding exports, it can be seen from Table 4.6 that in most countries the value of pulp, paper and paperboard and their manufactures is higher than that of wood and cork and their manufactures, the main exceptions being Indonesia, Malaysia and New Zealand. As a share of total commodity exports, the range of wood and paper and their manufactures is very wide – from nearly 35% in Finland and around 16 and 17% in Canada and Sweden to 0.6% in Japan, 1.2% in the United Kingdom and 1.7% in China. On the import side, the only country in Table 4.7 where imports of wood and cork and manufactures are markedly higher than those of pulp, paper and manufactures is Japan. Japan has a large paper-making sector that is heavily dependent on imports of wood raw materials. Otherwise, the share of wood and paper and their manufactures in countries’ imports is between 3 and 5%, with only Japan, Denmark and Norway higher than that. Given the huge variety of products entering international trade, even a share of 3% of total exports or imports is quite significant. Table 4.8 shows by way of illustration the exports of two of the leading exporters, Canada and Sweden, by main commodity groups in 1995. The largest groups in Canadian exports are machines and transport equipment, basic manufactures and crude materials excluding fuels, with wood products comprising sizeable shares of the last two groups. The same main groups, together with chemicals and related products, also come at the top of Sweden’s exports, with wood products also figuring prominently in the crude materials and basic manufactures groups. Wooden furniture is included in the 92

93

19.53 16.17 13.06 7.22 7.72 6.91 1.45 4.52 3.93 0.37 3.48 2.79 2.81 2.72 2.07 2.47 1.50 1.04 1.51 0.78

(billion US$)

Pulp, paper and paperboardb

c

b

Including manufactures of wood and cork Including waste (recovered) paper and manufactures of paper and paperboard 1994 d Excluding Hong Kong Source: UN International Trade Statistics Yearbook 1995, Vol. I

a

10.67 7.58 2.65 3.21 2.59 2.18 5.03 1.00 1.22 4.66 1.47 1.81 1.05 0.21 0.52 0.05 1.03 1.41 0.79 0.94

Wood and corka

30.20 23.75 15.72 10.42 10.31 9.09 6.47 5.53 5.15 5.03 4.95 4.61 3.85 2.93 2.59 2.52 2.52 2.45 2.30 1.72

Total wood products

Pulp, paper and paperboardb

5.6 1.3 0.5 5.2 8.7 0.8 11.1 0.6 0.5 6.3 0.9 4.0 2.3 0.1 0.6 0.1 4.5 1.0 5.0 6.8

10.2 2.8 2.6 11.8 25.9 2.4 3.2 2.5 1.7 0.5 2.1 6.2 6.0 1.1 2.3 0.6 6.6 0.7 9.5 5.7

15.7 4.1 3.1 17.0 34.6 3.2 14.3 3.1 2.2 6.8 3.0 10.2 8.3 1.2 2.9 0.6 11.1 1.7 14.5 12.5

Total wood products

(% of total commodity exports)

Wood and corka

Share of wood products in total value of commodity exports in 1995 in leading exporting countries

Canada USA Germany Swedenc Finlandc France Indonesia Netherlands Italy Malaysia Belgium–Lux. Austriac Brazil United Kingdom Spain Japan Portugal Chinad Chile New Zealand

Country

Table 4.6

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

94

17.16 5.20 13.08 9.90 9.15 6.51 5.50 4.46 2.79 3.41 3.53 3.06 1.66§ 2.20 2.56 1.55 1.30§ 1.68§ 1.06§ 0.99

(billion US$)

Pulp, paper and paperboardb

b

Including manufactures of wood and cork Including waste (recovered) paper and manufactures of paper and paperboard c Excluding Hong Kong d 1994 § Incomplete data Source: UN International Trade Statistics Yearbook 1995, Vol. I

a

10.56 15.94 6.47 3.37 2.63 3.73 2.19 1.65 2.61 1.52 1.35 1.53 1.81 1.10 0.37 1.22 1.16§ 0.59§ 0.86 0.73

Wood and corka

27.71 21.14 19.55 13.27 11.78 10.24 7.69 6.11 5.40 4.93 4.88 4.59 3.47§ 3.30 2.93 2.77 2.46§ 2.27§ 1.92§ 1.72

Total wood products

Pulp, paper and paperboardb

1.4 4.7 1.5 1.3 1.0 1.8 1.4 0.9 1.9 0.9 1.2 1.2 4.3 1.4 0.5 2.2 1.6§ 1.0§ 2.6 1.4

2.2 1.6 2.9 3.8 3.3 3.2 3.5 3.0 2.1 2.1 3.1 2.3 4.0§ 2.8 3.5 2.8 1.8§ 2.9§ 3.2§ 1.9

3.6 6.3 4.4 5.1 4.3 5.0 4.9 4.0 4.0 3.0 4.3 3.5 8.3§ 4.2 4.0 5.0 3.4§ 4.0§ 5.9§ 3.3

Total wood products

(% of total commodity imports)

Wood and corka

Share of wood products in total value of commodity imports in 1995 in leading importing countries

USA Japan Germany United Kingdom France Italy Netherlands Belgium–Lux. South Korea Canada Spain Chinac Denmark Switzerland Mexico Austriad Thailand Australia Norway Swedend

Table 4.7

THE INTERN ATION AL TIMBER TRADE

95

Source: UN International Trade Statistics Yearbook 1995, Vol. I

192 133 12 342 23 684 8 445 8 073 17 268 10 900 32 268 2 221 11 462 75 070 9 613 10 495

CANADA Exports (million US$) 100.0 6.5 12.3 4.4 4.2 9.0 5.7 16.8 1.1 6.0 39.1 5.0 5.5

Per cent of total (%)

Value of exports from Canada and Sweden by main commodity groups in 1995

ALL COMMODITIES Food & animals, beverages & tobacco Crude materials, excl. fuels • Wood and cork • Pulp and waste paper Mineral fuels, etc. Chemicals, related products, nes Basic manufactures • Wood & cork manufactures nes • Paper, paperboard and manufactures Machines, transport equipment Miscellaneous manufactured goods Goods not classified by kind

Table 4.8

61 360 1 234 4 817 2512 1346 1 559 5 686 15 032 696 5870 27 618 5 046 254

SWEDEN Exports (million US$)

100.0 2.0 7.9 4.1 2.2 2.5 9.3 24.5 1.1 9.6 45.0 8.2 0.4

Per cent of total (%)

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

96

Source: UN International Trade Statistics Yearbook 1995, Vol. I

ALL COMMODITIES Food & animals, beverages & tobacco Crude materials, excluding fuels • Wood and cork • Pulp and waste paper Minerals, fuels, etc. Chemicals, related products nes Basic manufactures • Wood & cork manufactures nes • Paper, paperboard and manufactures Machines, transport equipment Miscellaneous manufactured goods Goods not classified by kind

770 822 34 992 22 311 6 552 3 984 63 052 41 346 94 767 4 005 13 174 357 625 129 077 26 204

Imports cif (million US$) 100.0 1.5 2.9 0.9 1.5 8.2 5.4 12.3 0.5 1.7 46.4 16.7 3.4

Per cent of total (%)

UNITED STATES OF AMERICA

Table 4.9 Value of imports by the USA and Japan by main commodity groups in 1995

336 094 50 776 34 268 12 247 2 984 53 976 23 862 39 847 3 689 2 215 75 722 49 365 7 518

Imports cif (million US$)

100.0 15.1 10.2 3.6 0.9 16.1 7.1 11.9 1.1 0.7 22.5 14.7 2.2

Per cent of total (%)

JAPAN THE INTERN ATION AL TIMBER TRADE

WOOD INDUSTRIES AND PRODUCTS IN THE GLOB AL ECONOMY

miscellaneous manufactured goods group, within which it is not shown separately in the UN statistics from which the table was derived. Figures for the USA and Japan, the two leading importers of wood products, are given in Table 4.9, which shows imports in 1995 by main commodity groups. In the USA, 46% of all commodity imports is accounted for by machines and transport equipment, which includes such major items as road and railway vehicles and aircraft and their parts, and office equipment. Wood and paper and their manufactures make up a sizeable proportion of the imports of crude materials and basic manufactures. Japan differs from the USA in that a much larger proportion of its imports consists of food, beverages and tobacco (15%), crude materials (10%) and mineral fuels (16%), while machines and transport equipment make up 23% or half the share in the USA. Wood and paper and their manufactures account for 6.3% of total imports in Japan, a much larger share than the 3.6% in the USA. The information presented in this chapter has demonstrated that the wood-processing industries and wood products hold a quite important place in the national economies and international trade of many countries and play a key role in a number of them that are major exporters. The relative importance of the wood-processing sector and wood products varies from country to country depending on such factors as the size of the forest resource, the stage of each country’s industrial and economic development, and the demand for wood products by the population.

97

CHAPTER

5 Overview of world trade in wood products

I

n 1997, world exports of wood products, including recovered (waste) paper but excluding wood and paper manufactures and cork and its products, amounted to US$136 billion (FAO database). The value of imports was US$145 billion, the difference being partly explained by the fact that exports were reported on an fob (free on board) basis and imports on a cif (cost, insurance, freight) basis.

Distribution of world trade in wood products by commodity groups The shares of the five product groups are shown in Table 5.1. Paper and paperboard accounted for by far the largest share, in value terms, with 48% of total exports, followed by sawnwood with 19%, woodpulp (including waste paper) and wood-based panels with around 13% each, and wood raw materials with 8%. This distribution reflects the high average unit value of paper and paperboard compared with the other groups, especially wood raw materials. When expressed in cubic metres equivalent volume of wood in the rough (m3 EQ), the distribution is quite different, as seen in Fig. 5.1. 98

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS Table 5.1

Value of world trade in wood productsa in 1997 by commodity group

PRODUCT

EXPORTS (billion US$)

Per cent of total (%)

IMPORTS (billion US$)

Per cent of total (%)

138.3 9.9 25.7 17.1 17.5 67.6 0.5

100.0 7.1 18.6 12.4 12.6 48.9 0.4

145.0 12.5 28.8 17.2 18.8 67.1 0.6

100.0 8.6 19.9 11.9 13.0 46.3 0.4

TOTAL Wood raw material Sawnwood Wood-based panels Woodpulpb Paper & paperboard Unspecified a

Not including manufactures thereof Including recovered (waste) paper Source: FAO database b

The unit m3 EQ, which is used in several places in this book, is obtained by multiplying the actual volume or mass of each wood product by a factor which converts it into the volume of wood raw material (wood in the rough) needed in its manufacture. For some products, such as sawnwood and plywood, which are produced uniquely from roundwood, it is the same thing as roundwood equivalent. For others, which also use industrial wood residues and chips, such as woodpulp and particle board, and waste paper in the case of paper and paperboard, it is the volume of wood in the rough that would be needed if no residues, chips or waste paper were used. Among the larger volume products, the conversion factors applied in this book are: for one cubic metre of sawn softwood, plywood and particle board, 1.8, 2.3 and 1.43 respectively; and for one metric tonne (oven-dry) of chemical woodpulp, 4.8, of paper and paperboard, 3.4, and of waste paper, 2.5. The conversion factors vary from country to country, indeed from mill to mill, depending on the processing technology, and they also change over time as technology develops and the quality of raw material alters, so that the general factors used here should be considered as approximate averages at the global level. The volume of world exports of wood products in total in 1997 was 927 million m3 EQ. Paper and paperboard accounted for the largest share with 32%, much less than their 48% share of the value. The shares of woodpulp (including waste paper) and wood raw material were 22 and 14% of total volume respectively, substantially higher than their shares by value. That of sawnwood of 22% was also higher than its share of total value. 99

THE INTERN ATION AL TIMBER TRADE Wood raw material 7% Sawnwood 19%

Paper & paperboard 49% Wood-based panels 12%

Woodpulp & waste paper 13% A. SHARE OF VALUE Wood raw material 14%

Paper & paperboard 33% Sawnwood 23%

Wood-based panels 11%

Woodpulp & waste paper 19% B. SHARE OF VOLUME

5.1 Shares of commodity groups in world exports of wood products in 1997: value compared with volume (source: FAO database).

Distribution of world trade in wood products by country groups The respective shares of the value of world trade in wood products in 1997 of the seven country groups used in this book are shown in Table 5.2. Two groups, Europe and North America, accounted for three-quarters of total 100

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS Table 5.2

Value of world trade in wood productsa in 1997 by country groups

COUNTRY GROUP

EXPORTS (billion US$)

Per cent of total (%)

IMPORTS (billion US$)

Per cent of total (%)

138.3 45.5 60.3 4.2 6.6 13.6 2.6 5.5

100.0 32.9 43.6 3.0 4.8 9.8 1.9 4.0

145.0 28.1 62.9 1.5 33.1 10.2 3.0 6.2

100.0 19.4 43.4 1.0 22.8 7.0 2.1 4.3

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America a

Not including manufactures thereof Source: FAO database

exports, with ‘Other Asia-Pacific’ taking a further 10%. For imports, Europe, East Asia and North America between them accounted for 85% of the world total. As will be discussed in a later chapter, a substantial part of world trade is intra-regional, particularly in the case of Europe and North America. Thus if the present 15 countries of the European Union were treated as a single trading entity, Europe’s share of the world total would fall appreciably. Similarly, if trade between Canada and the USA were excluded from North American exports and imports, that region’s imports would become relatively unimportant, and its exports would be very substantially reduced. Virtually all countries are importers of wood products, and the majority of them are also exporters; however, the bulk of world trade is carried out by a fairly limited number of countries. Adding exports and imports together, which is not a very meaningful exercise but useful just for this discussion, ten countries would account for over two-thirds of the value of world trade in wood products. In 1997, the countries concerned were, in descending order of importance: the United States of America, Canada, Germany, Japan, China (including Taiwan and Hong Kong), the United Kingdom, Italy, France, the Netherlands and Austria.

The ‘Top 20’ exporting and importing countries of wood products in 1997 Table 5.3 lists the ‘Top 20’ exporters and importers of wood products in 1997 in terms of value. The top 20 exporters of wood products in 1997 accounted for 86% of the world total, and the top 20 importers for 83%. The five leading exporting countries were Canada, the USA, Germany, Finland and Sweden, 101

THE INTERN ATION AL TIMBER TRADE Table 5.3

‘Top 20’ exporting and importing countries of wood productsa in 1997

EXPORTING COUNTRIES

IMPORTING COUNTRIES

(million US $)

Canada USA Finland Sweden Germany Indonesia France Malaysia Austria China Russian Federation Netherlands Italy Brazil Belgium–Luxembourg United Kingdom Switzerland Spain Norway Japan All other countries

25 648 19 835 10 414 10 295 9 828 5 142 4 664 3 952 3 835 3 743 3 008 2 667 2 651 2 647 2 446 2 124 1 893 1 699 1 655 1 640 18 495

USA Japan China Germany United Kingdom Italy France Netherlands Canada South Korea Spain Belgium–Luxembourg Switzerland Austria Denmark Thailand Australia Mexico Sweden Brazil All other countries

(million US $) 24 134 16 684 12 641 10 916 9 993 6 823 5 866 4 658 3 976 3 740 3 720 3 372 2 212 2 016 1 950 1 528 1 498 1 470 1 398 1 314 25 072

a

Not including manufactures thereof Source: FAO database

and they alone accounted for more than half the world total. Likewise, the five leading importing countries, the USA, Japan, China, Germany and the United Kingdom, also held more than half the world total of imports. It is interesting to find that two countries, the USA and Germany, figure among the four leading exporters and importers, although for both of them the value of imports outweighs that of exports, in the case of the USA by a considerable margin. It is also noteworthy that no less than 15 out of the top 20 exporting countries are also found among the top 20 importers, and vice versa. There are several important exporting countries that one might have expected to be among the top 20 exporters, such as Chile, New Zealand and Portugal. Portugal would certainly move into the top 20 if cork and cork products were included as wood products. Among importing countries, those just failing to reach the top 20 included Brazil, Malaysia, Singapore and, again, Portugal. There are a number of surprises on the list of leading exporters. It includes several countries that are either poorly endowed with forest 102

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

resources, including China, the Netherlands, Italy, Belgium–Luxembourg and the United Kingdom, or which are usually thought of as importers of wood products, such as Germany and Japan. Major exporters that also figure on the list of importers include Canada, Austria and Sweden; imports in Thailand, which was in the past more noted as an exporter, now exceed exports. The reasons for these apparent anomalies include: 1

Some countries act as in-transit processors, importing raw material or semi-processed products and exporting processed products, or simply re-export the imported goods. 2 The species composition of countries’ forest resources provides the raw material for the production of certain products, but not of others which have to be imported. 3 Specialisation has created two-way trade in the same product but with differing specifications or qualities. 4 Waste paper and wood residues provide a substantial part of the raw material base for certain wood products, such as pulp and paper, and are often abundant in major importing and consuming countries. Sometimes also ‘wood products’ are made wholly or partly from non-wood materials, an example being flaxboard, a particle board produced and exported mainly by Belgium. These will be discussed in more detail later when trade trends in individual products are reviewed.

Changing pattern of commodity composition in trade Most of the wood products in use half a century ago are still found in the market today, although there are some whose importance has diminished considerably. These include pitprops, railway sleepers, insulating board and typing copy paper. This trend has been the result of either substitution by other, wood or non-wood, products or of the decline of the user sector, or both. For example, wooden pitprops, which were of major commercial importance until some time after the Second World War, have been largely replaced by steel ones, but a more significant factor has been the marked decline in underground coal mining in many countries. At the same time, there are products that are commercially important today that did not exist 50 years ago, which have been created either in response to an emergent market need, or as the result of technological development, which resulted in them taking market share from more traditional products. Examples of the former are computer, photocopying and fax papers; and of the latter medium density fibreboard (MDF) and oriented strand board (OSB). 103

THE INTERN ATION AL TIMBER TRADE

Pattern of exports Before looking at how the pattern of trade has evolved, it is interesting to see the commodity composition of world trade in wood products in the late 1990s and the regional shares. These are set out in Tables 5.4 for exports and 5.5 for imports.

Wood raw material World exports of wood raw material amounted to 122 million m3 in 1997, roughly equally divided between coniferous roundwood (sawlogs and veneer logs, pulpwood round and split, and other industrial roundwood), non-coniferous roundwood, and wood chips and residues. The former USSR, including the Baltic States, held the largest share of coniferous (softwood) roundwood exports with 33%, Europe about 25%, North America 20% and New Zealand (in Other Asia-Pacific) and Chile (in the Latin American group) for most of the remaining 20%. Trade in non-coniferous (hardwood or broadleaved) roundwood is divided between that of tropical hardwoods, mainly sawlogs and veneer logs, and temperate hardwoods, the largest category being pulpwood. Other Asia-Pacific, Africa and Latin America export tropical hardwood logs, and their exports accounted for over half of total non-coniferous roundwood in 1997, with Other Asia-Pacific alone taking 30%. The leading exporters in 1997 were Malaysia and Papua New Guinea. The former USSR, with nearly one-quarter of the world total, is the main exporter of temperate non-coniferous roundwood. Chips are the main component of the chips and residues group, and the largest trade in chips is around the Pacific Rim, notably from the USA (softwood chips) and Australia (hardwood chips) to Japan for use in paper making.

Sawnwood Sawnwood exports totalled 114 million m3 in 1997, of which 85% was of sawn softwood. Nearly all sawn softwood is exported from northern hemisphere regions: more than half from North America and a third from Europe. On the other hand, over half of sawn hardwood exports comes from southern hemisphere (tropical) regions, with Other Asia-Pacific alone accounting for over one-quarter of all sawn hardwood exports; Malaysia is the world’s leading sawn hardwood exporter. North America and Europe each accounted for more than one-fifth of world exports of sawn hardwood, all apart from a small quantity of re-exported tropical wood from Europe, consisting of temperate zone species. 104

105

96 906 16 802 3 480 20 593 17 792 8 600 2 890 30 401 18 768 30 449 39 429

Sawnwood (m3) • Coniferous (softwood) • Non-coniferous (hardwood)

Wood-based panels (m3) • Veneer sheets • Plywood • Particle board • Fibreboard

Woodpulp (mt) • Mechanical & semi-chemical • Chemical incl. dissolving

Paper and paperboard (mt) • Newsprint • Printing & writing • Other paper & paperboard

Source: FAO database

47 466 37 386 37 177

WORLD (1000 units)

52.0 15.3 31.3

66.5 48.4

28.1 11.9 36.1 15.6

53.2 24.5

20.7 4.7 24.6

North America

37.4 73.0 48.2

22.6 27.2

15.9 10.9 52.2 52.0

33.4 21.3

26.2 17.9 21.5

Europe

World exports of wood products and regional shares in 1997

Wood raw material (m3) • Coniferous roundwood • Non-coniferous roundwood • Chips & residues

Table 5.4

4.5 0.7 1.4

0.1 3.1

0.7 4.5 4.8 4.8

8.8 3.7

33.5 23.5 3.9

Former USSR

1.8 5.5 12.1

– 0.3

8.6 6.3 0.8 3.2

0.2 6.6

0.2 1.5 8.0

2.7 2.6 4.0

10.3 5.6

29.3 61.7 3.9 16.6

1.7 25.6

14.8 30.0 25.7

Other Asia-Pacific

(% of world total)

East Asia

0.6 0.2 0.5

– 1.8

9.5 0.8 0.1 0.1

0.1 7.9

0.3 17.1 5.8

Africa

1.0 2.6 2.5

0.4 13.7

8.0 3.9 2.0 7.7

2.7 10.3

4.3 5.3 10.4

Latin America OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

106

96 559 21 066 3 788 19 522 16 553 9 095 2 585 30 085 18 566 28 362 38 678

Sawnwood (m3) • Coniferous (softwood) • Non-coniferous (hardwood)

Wood-based panels (m3) • Veneer sheets • Plywood • Particle board • Fibreboard

Woodpulp (mt) • Mechanical & semi-chemical • Chemical incl. dissolving

Paper and paperboard (mt) • Newsprint • Printing & writing • Other paper & paperboard

Source: FAO database

49 617 41 326 43 351

Wood raw material (m3) • Coniferous roundwood • Non-coniferous roundwood • Chips & residues

WORLD (1000 units)

35.1 19.4 12.6

15.9 18.4

23.6 11.8 36.9 11.8

44.8 10.4

10.5 4.9 7.1

North America

36.3 58.8 45.9

32.8 49.2

24.3 24.4 47.2 48.2

32.8 36.8

41.9 53.0 23.5

Europe

Table 5.5 World imports of wood products and regional shares in 1997

0.9 1.1 1.5

– 0.2

1.2 0.6 2.2 1.7

0.8 0.6

1.5 0.4 0.1

Former USSR

10.5 8.7 21.4

36.9 21.8

42.9 50.4 9.3 27.2

12.8 27.9

44.3 34.0 69.0

9.5 7.3 7.4

8.7 6.2

4.9 8.2 2.5 6.4

3.0 15.0

1.1 6.3 0.2

Other Asia-Pacific

(% of world total)

East Asia

1.1 2.0 2.3

2.8 0.8

1.3 2.0 0.4 1.9

4.1 4.2

0.5 1.2 –

Africa

6.6 2.7 8.9

2.9 3.4

1.9 2.6 1.5 2.8

1.7 5.1

0.2 0.2 0.1

Latin America

THE INTERN ATION AL TIMBER TRADE

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

Wood-based panels World exports of wood-based panels amounted to over 50 million m3 in 1997, about half consisting of plywood and veneer sheets and half of particle board and fibreboard. Over three-fifths of total plywood exports originated from Other Asia-Pacific, where Indonesia is the region’s and indeed the world’s largest exporter. Taking account of exports of plywood manufactured from imported tropical hardwood logs in temperate countries, more than threequarters of world plywood exports are made from tropical species. Approximately one-quarter of plywood exports came from the northern hemisphere regions, produced from softwoods, especially in North America, or temperate or imported tropical hardwoods. Particle board and fibreboard exports are concentrated in North America and Europe, although in the case of fibreboard, Other Asia-Pacific (notably New Zealand) and Latin America (notably Chile and Brazil) accounted for 17 and 8% respectively in 1997, partly as a result of the strong growth in trade in MDF.

Woodpulp, paper and paperboard Total exports of woodpulp reached 33 million tonnes in 1997, threequarters of which from North America and Europe. Of the other regions, only Latin America shipped large quantities, about 14% of the world total of chemical woodpulp, Brazil and Chile being the main exporters. North America and Europe also accounted for the major share of world exports of paper and paperboard, which amounted to 89 million tonnes in 1997. North America exported over half the newsprint total, and Europe nearly threequarters of printing and writing papers and nearly half of other paper and paperboard. East Asia was also a significant exporter of other paper and paperboard, with 12% of the world total.

Pattern of imports Theoretically, the world totals of imports of wood products in Table 5.5 should be close to those of exports in Table 5.4. This is not always the case for a number of reasons. Firstly, there can be problems of classification: the same product being classified under different Standard International Trade Classification (SITC) headings in different countries. Secondly, where volumes or quantities have to be converted into metric units from other units, inappropriate conversion factors may be used. Thirdly, there may be a time factor: a consignment may be reported as shipped by the exporter in one year but not reported as received by the importer until the following year. There may be other reasons too: for example, some shipments, such as 107

THE INTERN ATION AL TIMBER TRADE

illicit exports or imports, may not be reported at all. The fact that the world export and import volumes are within a few per cent of each other for most products and that the greater the product aggregation the closer they are suggests that, generally speaking, the statistics can be accepted with a fair degree of confidence.

Wood raw material East Asia was by far the largest importer of wood raw material in 1997, with 44% of the world total of coniferous roundwood, 34% of non-coniferous roundwood and 69% of chips and residues. There was an unfortunate change in classification when SITC Revision 3 was introduced (UN 1994), which made it no longer possible to distinguish between sawlogs and veneer logs and pulpwood, the two main categories of industrial roundwood. Consequently, roundwood imports consist of both these categories as well as some other industrial roundwood, such as pitprops and poles. Some idea of the type of roundwood can be gained from its origin. For example, the Nordic countries import large quantities of non-coniferous pulpwood from the former USSR, while other European countries import tropical hardwood sawlogs and veneer logs from Africa and other southern hemisphere regions, as well as temperate zone hardwood sawlogs, veneer logs and pulpwood from Europe and temperate zone hardwood sawlogs and veneer logs from North America.

Sawnwood North America accounted for 45% of world imports of sawn softwood in 1997, but a large proportion of that consisted of intra-regional trade, mostly from Canada to the USA. Most of Europe’s imports, 33% of the world total, are also from intra-regional trade, but with supplies also from the former USSR and North America. East Asia is the third largest importing region with 13%. For sawn hardwood, Europe had 37% of world total imports, East Asia 28% and Other Asia-Pacific 15%, consisting partly of tropical species from the southern hemisphere and temperate zone species from Europe and North America.

Wood-based panels East Asia was the largest regional importer of plywood and veneer sheets in 1997, with 50 and 43% respectively of the world totals, followed by Europe with 24% of each. As for sawn hardwood, the pattern of East Asia’s plywood imports has changed over the past decade or so, as Japan and South Korea 108

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

in particular have come to rely less on imports of sawlogs and veneer logs for processing themselves into sawnwood and plywood, and have increased their imports of the latter products at the expense of domestic production. Europe is the predominant importer of both particle board and fibreboard, with around half the world total of each. North American imports of particle board accounted for more than a third of the world total of imports of those boards, a large and relatively new trade flow being of OSB from Canada to the USA.

Woodpulp, paper and paperboard Europe and East Asia are the most important importers of woodpulp, between them accounting for nearly 70% of the world total in 1997. Although very large importers of wood raw material for the production of woodpulp, Japan and other East Asian importers are importing increasing volumes of woodpulp for paper manufacture. Europe, mainly the Nordic countries, also imports considerable volumes of pulpwood from the former USSR, but the region as a whole is, like East Asia, a heavy importer of woodpulp from other regions, notably North and Latin America. Europe is the leading importer of paper and paperboard, much of the trade being intra-regional; similarly most of North America’s imports are from intra-regional trade, notably of newsprint between Canada and the USA, which made up 35% of the world total in 1997.

Trends in trade In recent decades, trade in wood products has grown strongly and the rate of growth has outstripped that of production and consumption. For the main product groups the volume increases in production and exports between 1970 and 1995 were as follows:

Sawnwood Wood-based panels Woodpulp Paper and paperboard

Production (% increase)

Exports (% increase)

3 110 59 123

50 327 98 220

The trends in consumption were similar to those of production, and of imports to those of exports. Thus, as was seen in Chapter 4, trade has been 109

THE INTERN ATION AL TIMBER TRADE Table 5.6 Value of world trade in wood products and regional shares in 1980 and 1995, and changes between 1980 and 1995 Share of world total

Value 1980

1995

1980

(billion US$)

1995

Increase 1980–1995a (%)

160 157 188

(%)

EXPORTS WORLD, of which: North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

56.74 17.95 23.14 2.70 2.04 7.72 1.57 1.61

147.73 46.09 66.65 4.90 6.36 14.31 2.90 6.52

100.0 31.6 40.8 4.8 3.6 13.6 2.8 2.8

100.0 31.2 45.1 3.3 4.3 9.7 2.0 4.4

IMPORTS WORLD, of which: North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

63.27 8.37 30.67 0.84 12.94 5.95 1.79 2.71

152.99 25.49 71.23 0.37 35.21 11.57 3.13 5.99

100.0 13.2 48.5 1.3 20.5 9.4 2.8 4.3

100.0 16.7 46.6 0.2 23.0 7.6 2.0 3.9

b

212 85 85 305 142 204 132 b

172 94 75 121

a

The values in 1980 and 1995 are in current US dollars; therefore the changes shown are not real changes but are still of interest for comparison between one region and another b As the USSR was one country in 1980 but had become 15 by 1995, the 1995 figure cannot be compared with 1980. The actual increase of exports is less than the apparent one of 81% and the actual decrease in imports more than the apparent one of 56% Source: FAO database

playing an increasingly important role in the overall supply–demand balance of wood products.

Trends in value of trade Table 5.6 shows how the value of world exports and imports changed over the 15 years from 1980 to 1995. Note that, since the values are given in current US dollars and have not been adjusted for inflation, the increases shown exaggerate the growth in real terms. However, the table is interesting in showing the differences in growth rates between the regional groups, with much faster expansion in exports than the world average of 160% in 110

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS Table 5.7 Value of world exports of wood products by commodity groups in 1980 and 1995, and changes between 1980 and 1995 Share of world total

Value 1980

1995

1980

(billion US$) TOTALb Wood raw material Sawnwood Wood-based panels Woodpulp & waste paper Paper & paperboard Unspecified

56.74 8.68 12.34 5.16 10.29 20.03 0.24

147.73 11.55 24.78 16.39 25.42 69.14 0.45

1995

Increase 1980–1995a (%)

100.0 7.8 16.8 11.1 17.2 46.8 0.3

160 33 101 218 147 245 88

(%) 100.0 15.3 21.7 9.1 18.1 35.3 0.4

a

The values in 1980 and 1995 are in current US dollars; therefore the changes are not real changes but are still of interest for comparison between one commodity group and another b The totals are slightly less than the world totals in Table 5.6, the difference being mainly due to the exclusion of fuelwood and charcoal in this table Source: FAO database

Latin America and East Asia, although in both regions the values were relatively small in 1980. On the other hand, export growth in the former USSR, Other Asia-Pacific and Africa was much less than average, partly associated with the fact that wood raw material and sawnwood, both of which expanded relatively slowly, made up a sizeable part of their exports. The two regions where imports increased faster than the world average were North America and East Asia, as a result of which they raised their shares of the total to 17 and 23% respectively. Europe raised its imports by 132% over fifteen years, somewhat slower than the world average, but still held about 47% of the total value in 1995. Imports into Other Asia-Pacific and Africa expanded more slowly than average, while those into the former USSR declined appreciably, as the economic depression following the break-up of the Soviet Union made it difficult to afford imports. The shares of world imports of the three southern hemisphere regions, Other Asia-Pacific, Africa and Latin America, were all lower in 1995 than 1980. While world trade in the wood products covered in Table 5.7 (fuelwood and charcoal are not included) expanded by 160% between 1980 and 1995, that of wood-based panels, paper and paperboard rose considerably faster, by 245 and 216% respectively, and as a consequence their shares of the total were also raised, to 47% in the case of paper and paperboard. On the other hand, there was only slow growth in trade of wood raw material (33%) and slower than average growth in that of sawnwood (101%), and their shares 111

THE INTERN ATION AL TIMBER TRADE Table 5.8

Trends in world exports of wood products by main groups, 1965–1995 1965

1970

Units Wood raw material Sawnwood Wood-based panels Woodpulp Recovered paper Paper & paperboard

m3 m3 m3 mt mt mt

1975

1980

1985

1990

1995

111.2 89.0 30.6 24.9 13.3 55.6

130.9 111.2 42.5 33.6 16.5 74.9

(million units) 53.6 50.1 5.3 12.5 .. 16.5

93.6 57.4 10.0 16.9 1.8 23.4

98.7 52.4 12.4 15.1 2.5 23.1

114.3 79.6 16.3 21.2 5.5 35.1

105.0 86.0 19.3 21.8 8.5 41.0

Source: FAO database

dipped. There has been a tendency for some exporting countries to ban or limit the export of roundwood with the aim of encouraging domestic processing and export of processed products. Canada, Indonesia and peninsular Malaysia are examples of this policy. In the case of sawnwood, the slow growth in trade is partly associated with the modest rise in demand, but also with the tendency towards further processing, for example into doors, windows and other building components, as well as into furniture. Despite rapid growth in trade in waste (recovered) paper since 1980, the share of woodpulp and waste paper in aggregate in total trade was slightly lower in 1995 than in 1980. There has been a trend towards the integration of pulp and paper making, which has resulted in a stagnation or lowering of woodpulp exports from some traditional exporters such as Sweden and Finland, which was more than compensated by stronger growth in paper and paperboard shipments. Partly offsetting this, however, has been the emergence of a number of new woodpulp producers and exporters, based on fast-growing plantations, for example in Brazil, Chile, Indonesia and South Africa.

Trends in volume of exports Trade reported in volume or quantity does not give a good idea of the relative importance of the various products, but does show the real trend over time. Table 5.8 shows the trends in world exports between 1965 and 1995 of the volumes of the main wood products groups, and Fig. 5.2 traces the trend over the same 30-year period as indices, taking 1980 as 100. The fastest growth over the 15 years 1980 to 1995 was in waste paper, an increase of nearly 200%. This was followed by wood-based panels (161%) and paper and paperboard (114%). There was slower growth in exports of 112

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

Index – 1980 = 100

350 300 250 200 150 100 50 0 1965

1970

1975

1980

Wood raw material Wood-based panels Waste paper

1985

1990

1995

Sawnwood Woodpulp Paper & paperboard

5.2 World exports by volume of main product groups, 1965–1995 (source: FAO database).

woodpulp (58%), sawnwood (40%) and wood raw material (15%). Both before 1980 and after, the long-term trend in trade of all the wood products groups has been upward, although least decisively for wood raw material as a group. Within the main product groups, the long-term trends in trade have varied, as may be seen in Table 5.9. In the wood raw material group, chip exports (and imports) more than doubled between 1980 and 1995, while those of industrial roundwood (mainly sawlogs, veneer logs and pulpwood) stagnated. Because of the changes in classification of roundwood, mentioned earlier, it is difficult to trace the long-term development of trade of the categories within the roundwood group at the global level. However, more will be said about this later when the regional patterns of trade are analysed. Plywood showed the fastest growth in trade over the 15 years among the wood-based panels, although in the 10 years 1985 to 1995 there were sharp increases in trade in particle board, boosted by the emergence of OSB and trade in that product between Canada and the USA, and in fibreboard, in this case spurred by the dynamic worldwide growth in MDF. In the paper and paperboard group, the rapid growth in trade of printing and writing paper contrasts with the more prosaic increase in that of newsprint. Figure 5.3 shows how the shares of products within each product group have evolved over the 30 years to 1995. For the sake of conciseness, details of the trends in import volumes of wood products at the world level are not given here, since they closely mirror those of exports. Obviously, trends in exports and imports differ at the regional and country levels, and these are given attention in chapters 6 and 7. 113

THE INTERN ATION AL TIMBER TRADE Table 5.9

Trends in world exports of wood products, 1980–1995 1980 Units

1985

1990

1995

Change 1980–1995 (%)

(million units)

Wood raw material • Industrial roundwood • Wood chips • Wood residues

m3 m3 m3

93.31 17.47 3.53

86.68 14.63 3.68

83.40 24.42 3.37

88.82 37.02 5.10

-5 112 45

Sawnwood • Sawn softwood • Sawn hardwood

m3 m3

66.44 13.19

73.81 12.23

73.82 15.19

94.35 16.90

42 28

Wood-based panels • Veneer sheets • Plywood • Particle board • Fibreboard

m3 m3 m3 m3

1.42 6.63 5.95 2.31

1.78 8.85 6.44 2.27

2.14 15.65 9.34 3.49

2.80 19.51 14.30 5.93

97 194 140 156

Woodpulp & waste paper • Mechanical • Semi-chemical • Chemical pulp for paper • Dissolving pulp • Waste (recovered) paper

mt mt mt mt mt

1.25 0.11 18.18 1.65 5.53

1.33 0.12 18.99 1.33 8.53

1.30 0.87 21.36 1.42 13.27

1.27 1.62 29.13 1.55 16.48

2 1398 60 -6 198

Paper and paperboard • Newsprint • Printing & writing • Other paper & paperboard

mt mt mt

12.30 7.25 15.53

13.93 9.91 17.12

15.34 16.32 23.97

17.83 25.65 31.47

45 254 103

Source: FAO database

Cyclical trade movements By showing export volumes at five-year intervals, the cyclical nature of trade is partly hidden. Nevertheless, the checking or falling back of trade of some wood products in the mid-1970s in the aftermath of the first oil price shock and subsequent economic recession in 1973/74 is apparent from Table 5.8 and Fig. 5.3. Some products are more prone to cyclical trade movements than others, as may be seen in Fig. 5.4, which shows annual exports of selected wood products for the period 1970 to 1998. The trade cycle in the mid-1970s was particularly marked, with peaks being reached for roundwood, sawnwood and plywood in 1973 and for woodpulp and paper and paperboard in 1974, followed by troughs in 1975 for all products. Exports of industrial roundwood exceeded 100 million m3 in 1973, a level never reached before or since. For industrial roundwood and sawnwood, cyclical 114

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS 140 120

Million m3

100 Wood chips

80

Wood residues

60

Industrial roundwood

40 20 0 1965

1970

1975

1980

1985

1990

1995

A. WOOD RAW MATERIAL 120

Million m3

100 80 Sawn hardwood

60

Sawn softwood

40 20 0 1965

1970

1975

1980

1985

1990

1995

Million m3

B. SAWNWOOD 45 40 35 30 25 20 15 10 5 0

Fibreboard Particle board Plywood & veneers

1965

1970

1975

1980

1985

1990

1995

C. WOOD-BASED PANELS

5.3 Volumes of world exports of wood products, 1965–1995 (source: FAO database).

peaks were subsequently reached in 1979 and 1988, with troughs in 1981 (following the second oil price shock) and in the case of sawnwood 1991. Exports of sawn softwood and plywood hit all-time ‘highs’ in 1997 of 97 and 20.6 million m3 respectively, before falling back partly as a result of the financial crisis in some Asian countries. Exports of sawn hardwood attained an 115

THE INTERN ATION AL TIMBER TRADE 60

Million mt

50 40 Waste paper

30

Woodpulp

20 10 0 1965

1970

1975

1980

1985

1990

1995

D. WOODPULP AND WASTE PAPER 80 70

Million mt

60 50

Other paper & paperboard

40

Printing & writing

30

Newsprint

20 10 0 1965

1970 1975 1980 1985 1990 E. PAPER AND PAPERBOARD

1995

5.3 Continued

all-time record in 1988 of 17.8 million m3, since when they have moved within fairly narrow limits with no clear upward or downward trend. Chemical woodpulp exports reached peaks in 1980, 1988 and an alltime high of 30.4 million tonnes in 1997 and troughs in 1982 and 1992. The cycles for newsprint were similar: peaks in 1981, 1987, 1995 and an all-time high of 18.8 million tonnes in 1997 and troughs in 1982, 1991 and 1996. For printing and writing paper, growth in trade has been strong and almost uninterrupted; the only decline since 1975 was in 1996. It is noticeable that the trend of exports of the pulp and paper products selected is more clearly upward than that of roundwood, sawnwood and plywood. If particle board and fibreboard, as well as chips, had also been included in the figure, these would also have shown a marked upward trend.

Trends in export unit values The market cycles for wood products are apparent from Fig. 5.5, which shows the average world export unit values for the same products as given 116

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS 120 100

Million m3

80 60 40 20 0 1970

1980 Industrial roundwood

1990 Sawn softwood

2000

Sawn hardwood

Plywood

A. INDUSTRIAL ROUNDWOOD, SAWN SOFTWOOD, SAWN HARDWOOD AND PLYWOOD 35 30

Million mt

25 20 15 10 5 0 1970

1980

1990

Chemical woodpulp

Newsprint

2000 Printing &writing

B. CHEMICAL WOODPULP, NEWSPRINT AND PRINTING & WRITING PAPER

5.4 Annual trend of world exports of selected wood products, 1970–1998 (provisional) (source: FAO database).

in Fig. 5.4. For roundwood, sawnwood and plywood, unit values reached peaks in 1974, 1980 and, depending on the product, the early or mid-1990s. It should be recalled that the unit values are shown as indices with 1980 being 100 and are calculated from current US dollars per unit, i.e. they have not been adjusted to take account of inflation. If a deflator had been applied, the trend in unit values would probably have been flat, with the possible exception of sawn hardwood, for which a modest long-term rise in unit value might have occurred. 117

THE INTERN ATION AL TIMBER TRADE 180 160 Index – 1980 = 100

140 120 100 80 60 40 20 0 1970

1980 Industrial roundwood

1990 Sawn softwood

2000

Sawn hardwood

Plywood

A. INDUSTRIAL ROUNDWOOD, SAWN SOFTWOOD, SAWN HARDWOOD AND PLYWOOD 180 160 Index – 1980 = 100

140 120 100 80 60 40 20 0 1970

1980

1990

Chemical woodpulp

Newsprint

2000 Printing &writing

B. CHEMICAL WOODPULP, NEWSPRINT AND PRINTING & WRITING PAPER

5.5 Average world export unit values (not deflated) for selected wood products, 1970–1998 (provisional) (source: FAO database).

The cyclical movement of unit values for woodpulp and paper was not quite the same as for the other products. In the 1970s and 1980s, it followed the same general trend but with a time lag of one or two years. A new peak was reached towards the end of the 1980s, after which there was quite a strong downward trend until about 1993 or 1994, followed by a sharp rise to 1995/1996 and renewed weakness thereafter. Long-term trends in prices for traded wood products, as distinct from medium-term cyclical movements, are dependent on the underlying 118

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

supply–demand relationship. The evidence seems to suggest that for most products the balance has remained fairly stable over the last three decades or so, resulting in no very marked upward or downward trend in prices, when expressed in constant value terms. One apparent exception to this, among the seven products represented in Fig. 5.5, is sawn hardwood, of which the average unit value of world exports rose from US$193 to US$401 per cubic metre (current, not deflated values) in the 20 years from 1985 to 1995 or 108%, compared with 74% for sawn softwood and 44% for plywood. That rise in unit value may be associated with the fact that trade in sawn hardwood has grown more slowly than that for most other wood products (Table 5.9) and that availability of hardwood sawlogs from the tropical forests, from which a substantial part of the exports come, is in decline.

Trade in added value wood products Up to now we have concentrated on those wood products for which statistics are available from all countries and in value as well as quantity. These are the ‘traditional’ products in unprocessed (roundwood), semi-processed (chips, sawnwood, woodpulp) form, or at the primary processing stage (wood-based panels, paper and paperboard), which are contained in FAO’s database. There is, however, a volume of trade, which has now reached very large proportions, of secondary processed or added value wood products. Data are collected by the United Nations Statistical Office (UNSO) from all countries at an aggregated level and compiled in more detail for major groups of countries by OECD and EUROSTAT. A global analysis of trade in added value wood products does not seem to have been undertaken yet, however. Partly because added value wood products may include elements not made from wood, as for example in furniture, their importance in the overall wood balance is difficult to evaluate. The value of imports of these secondary processed wood products is shown in Table 5.10 (by main product groups) and in Table 5.11 (by selected OECD countries).

OECD countries’ trade in added value wood products OECD countries probably account for more than 90% of total world trade in added value wood products, also termed secondary processed wood products. The value of these countries’ imports in 1996 was about US$28 billion, of which wooden furniture accounted for nearly US$19 billion and builders’ woodwork for US$4.3 billion (16%). The value of OECD imports from 119

THE INTERN ATION AL TIMBER TRADE Table 5.10 Value of imports of OECD countries of secondary processed wood products by main product groups, 1992 and 1996 IMPORTS FROM DEVELOPING MARKET ECONOMIES AND CHINA

TOTAL IMPORTS 1992

1996

1992 Increase (%)

(million US$) TOTAL Packings, pallets, etc. Coopers’ products Builders’ woodwork Domestic/decorative products Other articles of wood Wooden furniture

1996

(million US$)

Increase (%)

23 142

27 870

20

5368

8266

54

603 110 3 150 1 353

801 154 4 340 1 745

33 40 38 29

29 1 615 945

47 2 937 1292

62 26 52 37

1 520 16 405

2 109 18 722

39 14

560 3217

781 5208

39 62

Source: ITC, ITC/UNSO Comtrade database

Table 5.11 Value of imports of secondary processed wood products by selected OECD countries, 1992 and 1996 TOTAL 1992

1996

(million US$) TOTAL OECD United States Germany Japan France United Kingdom Netherlands Switzerland Austria Belgium–Luxembourg Canada Norway Other OECD

23 142 3 930 5 179 1 247 2 336 1 554 1 612 1 214 945 1 348 752 428 2 597

WOODEN FURNITURE 1992 Increase (%)

27 870 6 509 5 304 2 750 2 331 1 656 1 453 1 431 1 287 1 279 672 583 2 615

20 66 2 121 – 7 -10 18 36 -5 -11 36 1

Source: ITC, ITC/UNSO Comtrade database

120

1996

(million US$) 16 405 2 671 3 587 744 1 919 1 061 1 267 946 685 1 000 557 329 1 639

18 722 4 550 3 357 1 589 1 807 1 031 1 002 1 087 918 927 463 423 1 568

Increase (%) 14 70 -6 114 -6 -3 -21 15 34 -7 -17 29 -4

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

developing market economies and China (DMECs) increased by 54% between 1992 and 1996, much faster than from the rest of the world, including intra-OECD trade (10%). The share of the former in total OECD imports rose from 23 to 29% over the 4-year period. At the country level (Table 5.11) the trend of imports of secondary processed wood products in total was very uneven between 1992 and 1996. The USA and Japan showed strong growth; the rest of the OECD countries in aggregate showed little change. This pattern was similar for wooden furniture. In several countries there were quite marked declines in furniture imports, for example in Germany, the Netherlands, Belgium–Luxembourg and Canada.

European Union trade in added value wood products Data from EUROSTAT for the countries of the European Union (15 countries at the time of writing) allow the share of added value products in these countries’ total imports of wood products to be evaluated as is shown in Table 5.12 (which gives the exports also). Note that the term ‘primary processed wood products’ has been used in this table to denote wood raw material as well as sawnwood and wood-based panels. Total exports of wood products, primary processed and added value, of the 15 countries of the European Union amounted to ECU26.1 billion; this excludes exports of woodpulp, paper and paperboard and their manufactures. The corresponding figure for imports was ECU28.5 billion. Of the export total, ECU14 billion or over half consisted of added value products; and their share of the import total was ECU11.8 billion or two-fifths. Added value products thus account for an important part of the total trade in wood products of the European Union, in terms of value. Admittedly, much of the trade in added value products, nearly two-thirds, is shipments between EU member countries, but as Table 5.12 shows, there are sizeable volumes of trade with third parties (non-EU countries). What is striking is that the EU’s exports of value added wood products to non-EU countries are higher than its imports, so that in 1997 it was a net exporter, even if a modest one, of these products. This is in marked contrast with its external trade in ‘primary processed wood products’, which was heavily in deficit, with imports from non-EU countries more than double exports to them. The range of added value wood products entering trade is wide, and for convenience they have been grouped under seven main headings in Table 5.12. The most important group by far is wooden furniture, which accounted for nearly two-thirds of the value of the EU’s added value wood products

121

THE INTERN ATION AL TIMBER TRADE Table 5.12 Trade in added value and other wood products (excluding woodpulp, paper and paperboard) of the European Union (15 countries) in 1997

Total exports

Exports to non-EU countries

Total imports

Imports from non-EU countries

Net trade with non-EU countriesa

(million ECU) Wooden furniture Windows, doors, frames Cases, boxes, drums, barrels, pallets, etc. Mouldings, beadings, blocks for parquet Parquet panels Joinery, carpentry, etc. Other Total added value products

9 116 960 701

3549 309 244

6 243 1 023 860

1 939 430 344

1610 -121 -100

677

196

806

362

-166

791 683 1 100 14 028

213 218 369 5098

642 601 1 672 11 847

197 304 1 045 4 621

16 -86 -676 477

‘Primary processed’ wood productsb

12 055

3022

16 613

7 966

-4944

TOTAL

26 083

8120

28 460

12 587

-4467

a

Exports to non-EU countries minus imports from non-EU countries Wood raw material, sawnwood, wood-based panels Source: EUROSTAT COMEXT b

exports in 1997 and over half of its imports. The statistics distinguish between such categories as desks for offices with wooden frames, wooden furniture and cupboards for offices, fitted kitchen units and wooden furniture of a kind used in kitchens, wooden furniture for bedrooms, for dining rooms and for shops, and other categories of wooden furniture. The EU is a large net exporter of furniture, in contrast to most other added value wood products of which it is a net importer. Another large group is made up of windows, French windows and doors, including their frames, which accounted for about 7% of the EU’s exports of added value products and 9% of imports in 1997. Wood products used for transport and storage of goods include packing cases, boxes, drums, barrels and pallets, the last of which is the most important item in this group. Mouldings, beadings and blocks and strips for parquet make up another sizeable group, as do parquet panels and joinery and carpentry products. There are four groups of products in the table that are used principally in the construction industry (windows, etc., mouldings, etc., parquet panels and joinery, etc.), which between them accounted for 22% of the EU’s exports of added value wood products and 122

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

26% of imports, and this constituted the most important aggregated group of products after furniture. Products included under ‘Other’in the table are very diverse, and include such items as wooden frames for pictures, handles for cutlery and tools, shuttering for concrete formwork, shingles and shakes for roofing and siding, tableware, statuettes, carvings, marquetry, spools and spindles and match splints, among others.

Trade in added value paper and paperboard products A different approach has been used to obtain some idea of the importance of added value paper and paperboard products. Export and import data published by the United Nations of paper and paperboard and their manufactures have been compared with FAO’s data of exports and imports of paper and paperboard, which have not been further processed. The results for selected countries, which are among the main trading countries in these products, are shown in Table 5.13 for 1995. The manufactures of paper and paperboard include a variety of products that have been made up from the basic rolls or sheets, such as writing and note pads, envelopes, corrugated paperboard, blocks of paper ready for use in photocopiers, fax machines, computers and so on, tissues ready for household use, etc., etc. On average in the 16 countries shown in Table 5.13, these added value products accounted for 30% of the total value of exports of paper and paperboard and their manufactures in 1995 as well as a higher proportion of imports. It is noteworthy that for several of the major exporters of paper and paperboard, such as Canada, Finland and Sweden, the share of manufactures is relatively low, while in others that are better recognised as importers of wood products in general, such as Belgium– Luxembourg, China, Denmark, France, Italy, the Netherlands and the United Kingdom, the share of manufactures in exports is relatively high. The share of countries’ imports of paper and paperboard manufactures is spread quite widely above and below the average for the 16 countries of 37%, but there is not a perceptible pattern to explain the spread. As said earlier, it is unfortunately not possible to give a global estimate of the importance of added value products in the total trade of wood products. But from the evidence presented here it is clear that they are of considerable importance and merit greater attention than they have generally received up to now in market and trade analyses. The lacuna can be explained by the fact that trade data on added value products are often only available in value, not in quantity. Also for many of them wood is not the only component in their manufacture, and it is difficult to estimate the volume of that component and hence its significance in wood trade balances. 123

124

78 240

TOTAL 16 countries

23 118

30

32 50 12 42 59 9 39 35 43 29 47 4 33 13 48 33

(%)

Manufactures as proportion of total

69 306

1 203 3 984 2 795 5 529 1 606 373 7 317 9 553 4 045 2 215 4 537 929 2 969 831 8 246 13 174

25 711

537 1 546 1 447 1 093 529 159 3 852 4 046 1 753 520 2 779 160 790 412 3 392 2 696

Manufacturesa

(million US$)

Total paper & paperboard imports

IMPORTS

37

45 39 52 20 33 43 53 42 43 23 61 17 27 50 41 20

(%)

Manufactures as proportion of total

a Calculated by deducting value of paper and paperboard exports and imports, as reported by FAO, from that of paper and paperboard and manufactures thereof, as reported by UN. Note that the data from the two sources may not be completely compatible (see text) b 1994 Sources: UN International Trade Statistics Yearbook 1995,Vol I; FAO Yearbook of Forest Products 1997

2 656 3 241 11 462 2 887 610 6 997 6 369 12 548 3 906 2 405 4 059 1 178 1 528 5 870 2 636 9 888

843 1 634 1 368 1 225 363 621 2 493 4 381 1 685 706 1 925 53 500 764 1 264 3 293

Manufacturesa

(million US $)

Total paper & paperboard exports

EXPORTS

Trade in paper and paperboard and manufactures thereof of selected countries in 1995

Austriab Belgium–Luxembourg Canada China Denmark Finlandb France Germany Italy Japan Netherlands South Korea Spain Swedenb United Kingdom USA

Table 5.13

THE INTERN ATION AL TIMBER TRADE

OVERVIEW OF WORLD TRADE IN WOOD PRODUCTS

The share of added value products in the total wood products trade has almost certainly been growing in recent decades, and is likely to continue to do so. This should be kept in mind when the pattern and development of trade in the primary processed wood products are examined in greater depth in the following chapter, even if they still account for the major part of total trade.

125

CHAPTER

6 Trade flow patterns and trends

Some basic principles The country groupings

A

map of the world showing the pattern of trade flows in wood products would look like an extremely complex cat’s cradle. The objective of this chapter is to simplify that picture by drawing attention to the main trade flows between regions and also within regions. The products covered in this analysis are those that were termed ‘primary processed wood products’ in the previous chapter, comprising wood raw material, sawnwood, wood-based panels, woodpulp, paper and paperboard and recovered (waste) paper. These are the products covered in the FAO database. Information on trade patterns of added value products is not adequate for them to be dealt with here in a satisfactory way. A large part of trade flows from the countries with extensive forest resources or important wood-processing industries or both to those with dense populations and, with some exceptions, advanced economies. For simplicity, the countries have been placed into seven groups, as described in the Introduction, which to the extent possible reflect these characteristics while broadly following geographic lines. The resulting groupings may not be entirely logical, but a compromise can seldom be so. North America, 126

TRADE FLOW PATTERNS AND TRENDS

for example, has large forest resources and wood-processing industries as well as, in parts of it, dense population concentrations with very high personal incomes. It is therefore both a large exporter and importer of wood products, but much of the trade is intra-regional, mostly from Canada to the USA. Europe’s situation is somewhat similar. The countries of East Asia (China, including Hong Kong Special Administrative Area and the Province of Taiwan, Japan and South Korea), on the other hand, are not well endowed with forests, have a quite large wood-processing industry and huge populations, and are consequently heavily dependent on imports of wood products, especially raw materials. Other Asia-Pacific is the most heterogeneous group of the seven, comprising both countries that are well endowed with forest (South-East Asia) and those that are not (the Indian sub-continent and the Middle East), some with advanced economies (Australia, New Zealand), some with emerging economies, and others that are still with low per capita income levels. The trading patterns in this region therefore need special attention. The other regions, the former USSR, Africa and Latin America, while holding smaller shares of the total, also have their particular characteristics determining their place in the world trade pattern, which will also be looked at later.

Methodology for creating a trade flow database A word needs to be said about the methodology used to produce the statistics of trade flows used in this chapter. It was seen earlier that for various reasons there are very often discrepancies between the volume and value of exports of a given product from country A to country B reported by country A with the corresponding figures of imports reported by country B. In order to create a coherent set of trade flow data, it is necessary to reconcile these discrepancies. This complex exercise has been carried out principally by Dr. Bruce Michie on behalf of the European Forest Institute (Wardle and Michie 1998) and the team which prepared World Forests, Society and Environment (Palo and Uusivuori (eds) 1999), using the United Nations COMTRADE data as a basis. The results have been incorporated in the EFIDAS database. Because the product coding and definitions were different in the UN Standard International Trade Classification, Revision 3 (SITC Rev. 3) (United Nations 1994) to those in SITC Rev. 2, the trade statistics for the individual years have had to be converted to a standard classification, which can be achieved for all years only for a broad product group (e.g. industrial roundwood) but not for a narrower one (pulpwood or sawlogs and veneer logs). Country names and boundaries have also changed over the years and have to be standardised for consistent data series. Value is consistently reported, but volume may be reported as weight and have to be converted to volume, 127

THE INTERN ATION AL TIMBER TRADE

volume units may be unrecognisable or missing, in which case an estimate of volume based on average unit value for the reported volume is entered: this is the first kind of estimate, which is based entirely on the reported data. In certain cases major volumes are clearly inconsistent (Canada/USA sawnwood trade flows and countries’ trade in wood chips and particles trade in general), in which cases an intervention using external data is necessary to get a reasonably consistent series: this is the second kind of estimate. Out of a total of 220 or so countries in the world, only between 80 and 120 actually provide data in any given year to the United Nations Statistical Office (UNSTAT) for inclusion in the COMTRADE database. The reporting countries report trade flows with non-reporting countries; by gathering together all trade flows of a non-reporting country that are reported by its trading partners an estimate can be made of its trade. The EFIDAS/WFSE trade flow database includes estimates of trade flows (and from them of total trade) of all non-reporting countries and territories that can be identified from reporting trading partners’ data. This brings the total number of countries and territories in the database up to approximately 220. To give an idea of the differences between the figures obtained for trade flows and those of exports and imports as reported by FAO in its forestry database, which are also mainly based on COMTRADE, Table 6.1 shows some world totals for 1997. The comparison of the data in Table 6.1 shows that in general the world trade flow totals are acceptably consistent with the world aggregates of countries’ exports and imports reported to FAO. Indeed, there is just as often as large a difference between the official export and import totals as between them and the trade flow totals. There are two cases where the discrepancies are marked: for the volumes (but not the values) of wood chips and sawn softwood. In both cases the explanation may lie in the factors used to convert the volumes in national units to metric ones. The set of data obtained from this process is unique and valuable for analyses of trade flows, such as the one in this chapter. It makes it possible to build up a comprehensive picture of the direction of trade of each wood product and how the pattern has changed over time. What follows is only a summary of the information available, but should be enough to highlight some of the principal features.

General trade patterns The value of world trade in wood products (excluding value added products) amounted to US$137 billion in 1997, and Table 6.2 shows the share of each region in total exports and imports and the flow of trade between the 128

129 15.9 13.7 1.6 67.6 13.7 25.9 31.5

Woodpulp • Chemical woodpulp for paper Waste (recovered) paper Paper and paperboard • Newsprint • Printing and writing • Other paper and paperboard

Adjusted to improve consistency with value data Sources: FAO database; EFIDAS database

a

4.8 4.9 2.6 28.8 20.2 8.6 17.2 8.9 3.5 2.4

3.8 4.1 1.8 25.7 19.2 6.6 17.1 8.7 3.6 2.5 16.7 14.6 2.0 67.1 14.6 24.3 32.3

145.0

138.3

16.1 13.8 1.6 63.2 9.7 25.7 27.8

4.5 4.5 1.8 27.7 20.0 7.7 17.1 8.6 3.6 2.5

136.8

Trade flow totals (exports) (EFIDAS)

(billion US$)

Imports (FAO)

TOTAL WOOD PRODUCTS Wood raw material • Coniferous industrial roundwood • Non-coniferous industrial roundwood • Wood chips Sawnwood • Sawn softwood • Sawn hardwood Wood-based panels • Plywood • Particle board • Fibreboard

Exports (FAO)

VALUE

34.9 30.4 17.3 88.6 18.8 30.4 39.4

47.5 37.4 31.9 113.8 97.0 16.8 50.5 20.6 17.8 8.6

..

Exports (FAO) .. (million m3) 49.6 41.3 38.5 117.6 96.6 21.1 49.0 19.5 16.6 9.1 (million mt) 34.3 30.1 18.7 85.6 18.6 28.4 38.7

Imports (FAO)

35.4 30.6 17.1 87.0 18.3 30.7 38.1

48.3a 40.5a 33.6a 116.1 98.9a 17.2 49.8 18.4 18.0 7.9

..

Trade flow totals (exports) (EFIDAS)

QUANTITY

Table 6.1 Comparison of world totals of exports and imports of the main wood products in 1997 from FAO data with derived trade flow totals based on export data (EFIDAS)

TRADE FLOW PATTERNS AND TRENDS

130

100.0 19.3 44.9 0.9 20.7 8.0 2.0 4.2

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Source: EFIDAS database

136.82 26.41 61.45 1.22 28.36 10.94 2.68 5.76

From: WORLD

31.1 15.7 4.5 – 6.7 1.6 0.2 2.5

42.61 21.48 6.13 0.01 9.18 2.12 0.29 3.40

N. America

44.2 1.6 35.8 0.5 1.7 2.7 1.2 0.7

60.48 2.14 48.91 0.69 2.33 3.69 1.71 1.02

Europe

Trade pattern of total wood products in 1997

To: WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Table 6.2

East Asia

7.07 0.41 0.12 – 5.71 0.77 0.02 0.04

3.1 0.1 1.6 0.3 0.6 0.3 0.1 –

5.2 0.3 0.1 – 4.2 0.6 – –

(% of world total)

4.25 0.07 2.21 0.48 0.89 0.41 0.16 0.03

(billion US$)

Former USSR

10.0 0.6 0.9 – 6.0 2.4 0.1 –

13.73 0.76 1.27 0.02 8.22 3.26 0.19 0.02

Other Asia-Pacific

2.0 0.9 – 0.6 0.2 0.1 – 0.1

2.69 0.09 1.29 – 0.81 0.28 0.19 0.03

Africa

4.4 1.1 1.1 – 0.9 0.3 0.1 0.9

6.00 1.47 1.53 – 1.23 0.42 0.12 1.23

Latin America

THE INTERN ATION AL TIMBER TRADE

TRADE FLOW PATTERNS AND TRENDS

regions. In order of importance, the largest exporting regions were Europe, North America and Other Asia-Pacific, which between them accounted for 85% of the world total. On the import side, the most important regions were Europe, East Asia and North America, with 85% of the total. The fact that Europe and North America figure in the top three exporting and importing regions shows the importance of their intra-regional trade flows, which make up more than half of the world total. North America’s main external markets are East Asia and Europe; Europe’s are Other AsiaPacific and East Asia. One-fifth of Other Asia-Pacific’s exports are traded within the region; of the remainder nearly four-fifths goes to East Asia. On the import side, North America’s largest external supplier of wood products is Europe, followed by Latin America. North America, followed by the former USSR, is the largest external supplier to Europe; and North America and Other Asia-Pacific are the main suppliers to East Asia. The relative importance of intra-regional trade and trade with other regions is shown in more detail in Table 6.3. At the world level about threefifths of total trade in wood products takes place within the regions and twofifths is between the regions. Most of Europe’s and East Asia’s exports, around four-fifths, remain within the respective regions, and about half of North America’s. This is in contrast to the situation in the former USSR, Africa and Latin America, most of whose exports go to other regions. As regards imports, North America and Europe obtain a large part, 80% or more, from within their respective regions. On the other hand, East Asia imported 80% from other regions. Despite being relatively well endowed with forests, Other Asia-Pacific, Africa and Latin America obtained major shares of their imports from other regions, over 90% in the case of Africa. This partly reflects the relatively slow development of wood-processing capacity in many of their countries, which makes them continue to depend on imports particularly of paper and paperboard from overseas.

Trade flow patterns of individual wood products To appreciate the diversity of trade flows in wood products, it is necessary to look at the individual products. The trade patterns for the main products entering international trade are shown for 1997 in Tables 6.4 to 6.7.

Coniferous industrial roundwood There are two principal components of this group: coniferous sawlogs and veneer logs for the manufacture of sawn softwood (coniferous sawnwood) 131

132

Source: EFIDAS database

136.82 42.61 60.48 4.25 7.07 13.73 2.69 6.00

Total exports

81.26 21.48 48.91 0.48 5.71 3.26 0.19 1.23

Intraregional

55.56 21.13 11.57 3.77 1.36 10.47 2.50 4.77

136.82 26.41 61.45 1.22 28.36 10.94 2.68 5.76

Total imports

(billion US$)

To other regions

Of which:

55.56 4.93 12.54 0.74 22.65 7.68 2.49 4.53

Of which: From other regions

59.4 50.4 80.9 11.3 80.8 23.7 7.1 20.5

As per cent of total exports

59.4 81.3 79.6 39.3 20.1 29.8 7.1 21.3

(%) 40.6 49.6 19.1 88.7 19.2 76.3 92.9 79.5

40.6 18.7 20.4 60.7 79.9 70.2 92.9 78.7

Imports as per cent of total imports

Trade with other regions:

As per cent Exports as of total per cent of imports total exports

Intra-regional trade:

Inter- and intra-regional trade in total wood products and their shares of total exports and imports in 1997

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Table 6.3

THE INTERN ATION AL TIMBER TRADE

From: WORLD

N. America

Europe 3

East Asia

(million m )

Former USSR

Trade flow patterns of the main categories of wood raw materials in 1997

133

Adjusted to improve consistency with value data Source: EFIDAS database

a

0.25 – 0.03 – 0.15 0.03 0.05 –

5.43 0.01 2.40 – 2.23 0.45 0.33 0.01

2.14 – – – 2.14 – – –

9.02 0.01 0.11 – 7.14 1.74 0.02 – 9.67a – – – 9.63a 0.04 – –

Africa

6.48a 0.09 – – 5.81a 0.58 – –

Other Asia-Pacific

A. CONIFEROUS (SOFTWOOD) INDUSTRIAL ROUNDWOOD To: WORLD 48.28 9.88a 12.54 16.47 0.09 North America 2.57 2.42a – 0.03 – Europe 19.60 0.02 12.11 7.00 – Former USSR 0.72 – 0.01 0.71 – East Asia 23.78 7.21 0.19 8.23 0.09 Other Asia-Pacific 1.25 0.10 0.06 0.48 – Africa 0.22 – 0.16 0.01 – Latin America 0.14 0.12 – – – B. NON-CONIFEROUS (HARDWOOD) INDUSTRIAL ROUNDWOOD (TROPICAL AND TEMPERATE) To: WORLD 40.53 1.76a 10.29 8.93 3.18 North America 1.61 1.40 0.02 0.01 – Europe 20.17 0.14 8.71 7.58 0.04 Former USSR 0.22 – 0.01 0.21 – East Asia 15.07 0.16 1.20 1.00 3.09 Other Asia-Pacific 2.8 0.05 0.24 0.13 0.04 Africa 0.58 – 0.11 – – Latin America 0.08 0.01 0.01 – – C. WOOD CHIPS (SOFTWOOD AND HARDWOOD) To: WORLD 33.58 8.59a 3.61 0.91 2.96 North America 2.44 2.22 – – – Europe 4.83 0.06 3.57 0.73 – Former USSR 0.01 – – 0.01 – East Asia 26.19 6.29 0.02 0.16 2.96 Other Asia-Pacific 0.08 0.01 0.02 0.01 – Africa 0.01 – – – – Latin America 0.03 0.02 – – –

Table 6.4

5.70 0.21 0.47 – 5.01 – – –

1.93 0.16 1.20 – 0.24 0.15 0.13 0.05

2.58 0.03 0.42 – 2.10 0.01 – 0.02

Latin America

TRADE FLOW PATTERNS AND TRENDS

THE INTERN ATION AL TIMBER TRADE

and plywood; and coniferous pulpwood for the manufacture of woodpulp, particle board and fibreboard. There are also small quantities of other assortments, such as pitprops, poles and pilings. As explained earlier, the current Standard International Trade Classification (SITC Rev. 3) does not distinguish between these assortments, which is unfortunate from the analytical point of view, since the way in which they are utilised and the industries using them are quite distinct and the unit value of sawlogs and veneer logs is usually appreciably higher than that of the other assortments. The former USSR, Europe and North America are the main exporters of coniferous industrial roundwood, accounting between them for 86% of the world total of 48 million m3 in 1997. In recent years supplies from fastgrowing plantations in New Zealand and Chile have become increasingly important and this is reflected in the export figures of Other Asia-Pacific and Latin America respectively in Table 6.4. The main trade flows are from the Russian Federation to East Asia, notably Japan, and the three Nordic countries; from the United States to East Asia and Canada; and from New Zealand and Chile to Japan and South Korea. The volume of intra-European trade is large, over 12 million m3 in 1997, and consists mainly of trade between neighbouring countries, for example from Germany and the Czech Republic to Austria and Italy, and between the Nordic countries. There has also been significant growth in exports from the three Baltic states (Estonia, Latvia and Lithuania, included in the former USSR) during the 1990s, and in 1997 their exports, mainly to the Nordic countries, had reached 3.3 million m3, compared with 12.2 million m3 exported by the Russian Federation, half of which went to East Asia.

Non-coniferous industrial roundwood The components of this product group comprise non-coniferous sawlogs and veneer logs for the manufacture of sawn hardwood (non-coniferous sawnwood), plywood and veneer sheets, non-coniferous pulpwood, and relatively small quantities of other non-coniferous industrial roundwood. Particularly in the case of sawlogs and veneer logs, there is a further distinction between logs of tropical origin and those of temperate-zone origin, even though many of their uses are the same. Out of the 41 million m3 of world trade in non-coniferous industrial roundwood in 1997, shown in Table 6.4, over 16 million was exported from the southern hemisphere regions (other Asia-Pacific, Africa and Latin America), and virtually all of that was in the form of tropical hardwood sawlogs and veneer logs. By far the most important destination for those logs was East Asia, with Europe and Other Asia-Pacific in second and third positions some way behind. 134

TRADE FLOW PATTERNS AND TRENDS

In the late 1990s, Malaysia (Sarawak), Papua New Guinea and the Solomon Islands were the largest Asia-Pacific exporters of tropical logs, and Gabon, Cameroon and Equatorial Guinea the largest African ones. Later we shall look at how the pattern of exports has changed over time; some countries have largely disappeared as major exporters of logs and others have at least partly taken their place. Apart from the East Asian countries, India, France, the Philippines and Thailand are the main importers of tropical hardwood logs. As with exporters, the pattern of importers has changed significantly over recent decades, and these changes are perhaps more marked than for any other wood product. The former USSR and Europe are the largest exporting regions of temperate-zone non-coniferous industrial wood. Most of the former’s exports are in the form of pulpwood, mainly going from the Russian Federation and the Baltic states to the Nordic countries. Much of Europe’s trade is between neighbouring countries, for example from France to Belgium, Italy, Germany and Spain. While it is difficult to separate sawlogs and veneer logs from pulpwood, it may be estimated that less than half of the total European exports of non-coniferous industrial roundwood of some 10 million m3 in 1997 consisted of sawlogs and veneer logs.

Wood chips In volume terms, world trade in wood chips of about 37 million m3 was lower in 1997 than that of coniferous and non-coniferous industrial roundwood; its value is less than half the value of those product groups. No separation is made in the statistics between coniferous (softwood) and non-coniferous (hardwood) chips, but it is assumed that, apart from those exported from Other Asia-Pacific, most of them entering international trade are coniferous. Chips come from two sources: from the wood-processing industries, notably as by-products of sawmilling; and directly chipped from roundwood. Australia is by far the largest producer and exporter of the latter to East Asia, mainly from natural eucalyptus stands, which have been the subject of protracted controversy on environmental grounds. North America ships large quantities of coniferous chips as industry by-products, also mainly to East Asia, predominantly Japan, which in total accounts for over three-quarters of total world imports, and Japan alone for around two-thirds. Chile and South Africa are also major suppliers of chips to East Asia. European trade in chips is, apart from some supplies from former USSR, mainly intra-regional and between neighbours, for example from Germany to France and Austria, and Austria to Italy. Likewise, there is two-way trade in North America between Canada and the United States.

135

136

32.50 0.13 26.59 0.03 1.63 1.20 2.91 0.01

Europe

17.20 2.10 7.01 0.22 3.57 3.06 0.65 0.59

3.58 1.64 0.97 – 0.58 0.15 0.05 0.19

4.44 0.03 3.55 0.03 0.15 0.20 0.47 0.01

(TROPICAL AND TEMPERATE)

51.55 41.44 1.22 – 7.15 0.76 0.08 0.90

N. Americaa

Adjusted to improve consistency with value data Source: EFIDAS database

a

B. SAWN HARDWOOD To: WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

98.90 43.12 34.66 1.08 11.44 3.42 3.97 1.22

From: WORLD

Trade flow patterns of sawnwood in 1997

A. SAWN SOFTWOOD To: WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Table 6.5

East Asia

0.62 – 0.38 0.19 0.01 0.03 0.01 –

9.55 0.03 6.57 1.05 0.67 0.56 0.63 0.05

1.23 0.02 0.02 – 1.15 0.04 – –

0.32 0.01 – – 0.30 0.01 – –

(million m3)

Former USSR

4.73 0.15 0.70 – 1.52 2.34 0.02 –

1.62 0.28 0.02 – 0.72 0.59 0.01 –

Other Asia-Pacific

1.06 0.02 0.87 – 0.03 0.04 0.09 –

0.21 0.01 0.02 – – – 0.17 –

Africa

1.55 0.23 0.53 – 0.13 0.25 0.01 0.40

3.16 1.23 0.23 – 0.97 0.29 0.18 0.26

Latin America

THE INTERN ATION AL TIMBER TRADE

TRADE FLOW PATTERNS AND TRENDS

Sawn softwood Of the world total trade in sawn softwood in 1997 of 99 million m3, twofifths took place within North America, mainly from Canada to the United States, and one-quarter within Europe. The rest of the world accounted for only one-third of the total, including other regions’ trade with North America and Europe. Of the other regions, the former USSR was by far the most important exporter with 69% of its exports going to Europe. The Russian Federation is the largest exporter among the countries of the former USSR, while the Baltic states have seen their exports increase considerably during the 1990s to take an important share of the total. Canada is the world’s leading exporter of sawn softwood with a volume in 1997 of 48 million m3, 85% of which went across the border to the United States. Of the 7 million m3 shipped overseas, the largest volumes went to East Asia, chiefly Japan. The United States is the largest supplier to East Asia after Canada. Exports from Sweden, Finland and Austria in 1997 amounted to 23 million m3 or nearly three-quarters of total European exports; other important shippers include Germany, the Czech Republic, Portugal and Poland (the three Baltic states are treated as part of the former USSR – see above). Imports are more evenly spread among countries and it takes six countries, the United Kingdom, Germany, Italy, the Netherlands, Denmark and France, to account for three-quarters of total European imports. The largest trade flows are between the Nordic countries and their neighbours to the south and west and between Austria and other central European countries and their neighbours, and these flows are supplemented by exports from the former USSR and North America into Europe. East Asia is the most important importing region of sawn softwood after North America and Europe and the largest importer from other regions. North America is its principal supplier, but the former USSR (almost entirely the Russian Federation), Other Asia-Pacific (mostly New Zealand) and Latin America (mostly Chile) are also of importance, while Europe, notably Sweden, Finland and Austria, has increased exports significantly in recent years to Japan and China. North America is the largest supplier of sawn softwood to Other AsiaPacific, of which Australia is the leading importer, and to Latin America, notably Mexico. The largest volume of sawn softwood exported from Europe to other regions goes to Africa; all five African countries bordering the Mediterranean are sizeable importers, in order of importance Egypt, Morocco, Algeria, Tunisia and Libya, which between them account for the bulk of Africa’s imports. These countries also import considerable volumes from the former USSR, as do some countries in the western part of Other 137

From: WORLD

N. America

Europe

138

Source: EFIDAS database

East Asia

1.01 0.03 0.02 – 0.67 0.27 0.01 –

0.37 0.01 – – 0.32 0.04 – –

0.24 0.01 0.12 0.05 – 0.05 0.01 –

10.78 0.84 0.81 – 7.35 1.51 0.25 0.02

0.78 – 0.01 0.01 0.55 0.20 0.01 –

1.22 0.04 0.01 – 1.08 0.09 – –

Other Asia-Pacific

0.53 0.24 – – 0.32 – 0.17 – – 0.23 0.04 0.01 – – – – FIBREBOARD)

0.92 0.14 0.58 0.08 0.01 – 0.07 0.40

(million m3)

Former USSR

Trade flow patterns of the main categories of wood-based panels in 1997

A. PLYWOOD To: WORLD 18.42 2.52 2.03 North America 2.04 0.65 0.04 Europe 4.74 1.15 1.81 Former USSR 0.10 – 0.01 East Asia 8.85 0.37 0.03 Other Asia-Pacific 1.76 0.04 0.10 Africa 0.38 – 0.04 Latin America 0.55 0.30 – B. PARTICLE BOARD (INCLUDING ORIENTED STRAND BOARD, etc.) To: WORLD 18.04 6.71 9.26 North America 6.34 6.02 0.17 Europe 8.71 0.05 8.29 Former USSR 0.43 – 0.25 East Asia 1.61 0.51 0.23 Other Asia-Pacific 0.51 0.02 0.24 Africa 0.10 – 0.06 Latin America 0.33 0.11 0.02 C. COMPRESSED FIBREBOARD (HARDBOARD AND MEDIUM DENSITY To: WORLD 6.52 0.71 3.56 North America 0.70 0.43 0.05 Europe 3.40 0.09 3.07 Former USSR 0.09 – 0.04 East Asia 1.29 0.10 0.10 Other Asia-Pacific 0.64 0.03 0.20 Africa 0.13 0.01 0.06 Latin America 0.28 0.04 0.04

Table 6.6

0.05 – 0.03 – – – 0.02 –

0.04 – – – – – 0.04 –

0.10 – 0.08 – – – 0.02 –

Africa

0.58 0.17 0.08 – 0.09 0.04 0.01 0.19

0.47 0.13 0.05 – 0.10 – – 0.20

0.86 0.33 0.30 – 0.02 0.01 0.01 0.19

Latin America

THE INTERN ATION AL TIMBER TRADE

TRADE FLOW PATTERNS AND TRENDS

Asia-Pacific, particularly Saudi Arabia, Lebanon and the United Arab Emirates, which are also supplied by Europe. Up to now the countries of the Indian sub-continent, despite their large populations and housing needs and scarce forest resources, have not been significant importers of softwood, but there are signs that this is changing, in India at least, although it is not clear whether import growth is likely to be in the form of logs or sawnwood. The situation is similar for hardwoods.

Sawn hardwood As with hardwood logs, a distinction can be made between trade in tropical and temperate sawn hardwood. The three southern hemisphere regions exported over 7 million m3 of sawn hardwood in 1997 or over 40% of the world total of 17 million, and nearly all of their exports were of tropical species. Some tropical sawn hardwood produced from imported logs is also exported from Europe and East Asia. Other Asia-Pacific is the largest exporting region, and about half of its exports is intra-regional and a further third goes to East Asia. Malaysia is by far the largest exporter in the region (and in the world), followed by Indonesia, Singapore (re-exports) and Laos, while the main importers in the region are Thailand, Singapore, the Philippines, Malaysia and Australia. Europe and North America are the main exporters of temperate sawn hardwood, with about 80% of Europe’s exports being traded within Europe and 46% of North America’s within the region, mainly from the United States to Canada (the reverse of the sawn softwood flow). Europe’s main exporters are France, Croatia, Romania, Germany and Poland. The main European importers, of tropical and temperate sawn hardwood combined, are Italy, Spain, Belgium–Luxembourg, Netherlands, Germany, the United Kingdom and France. Africa, mainly the Côte d’Ivoire, Cameroon and Ghana, is the largest supplier of tropical sawn hardwood to Europe, followed by Other Asia-Pacific, notably Malaysia and Indonesia, and Latin America, led by Brazil. The United States, the largest sawn hardwood exporter after Malaysia, has built up its trade with other regions in recent decades, particularly Europe and East Asia, on the basis of the extensive hardwood forest resource in its eastern states.

Plywood World trade in plywood amounted to over 18 million m3 in 1997 (Table 6.6). Other Asia-Pacific exported 59% of the total, with Indonesia being by far the largest single exporter; and 48% was imported by East Asia, with Japan and 139

THE INTERN ATION AL TIMBER TRADE

China being the world’s leading importers. Plywood is the only product of which North America imports more from overseas than from intra-regional trade, but its total plywood exports are still larger than total imports, with Europe being its main overseas market. Plywood is produced either from hardwoods, tropical or temperate, or from softwoods, or from a mixture, e.g. hardwood surfaces with softwood core. No precise figure can be given of the respective volumes of the different categories entering international trade, but a rough estimate is that about 70% of the world total is produced from tropical hardwoods, including tropical plywood from imported logs in temperate countries, 20% from softwoods and 10% from temperate hardwoods.

Particle board Whereas trade in plywood is concentrated in Pacific Rim countries, that of particle board is largely centred on Europe, which accounted for approximately half the world total of exports and imports of 18 million m3 in 1997. Intra-European trade alone made up 46% of the total. The other main trade flow is within North America, and this constitutes one-third of the world total. In the latter case, the notable feature has been the rapid expansion of trade in OSB in recent years; unfortunately the international trade classification does not yet allow the separation of OSB from other types of particle board. OSB has been successfully substituting plywood in a number of mass volume uses, such as concrete shuttering and wall panels.

Compressed fibreboard (hardboard and medium density fibreboard) The figures for compressed fibreboard in Table 6.6 cover hardboard and medium density fibreboard (MDF) but not insulating board (non-compressed fibreboard) which, however, accounts for only about 13% of international trade in fibreboard. Of the world total of 6.5 million m3 in 1997, Europe accounted for over half of exports and imports, while Other Asia-Pacific and East Asia were the next most important exporting and importing regions respectively. After many years of more or less stable volumes of trade, the fibreboard market was reactivated in the 1990s by the emergence of MDF, which has accounted for a large part of the growth in production and trade. It is being used increasingly in furniture and joinery as a substitute for sawnwood, particularly sawn hardwood, and other wood-based panels.

140

141 7.66 0.06 5.78 0.01 0.57 1.17 0.06 –

B. WASTE (RECOVERED) PAPER To: WORLD 17.05 North America 2.51 Europe 6.02 Former USSR 0.07 East Asia 3.92 Other Asia-Pacific 2.92 Africa 0.09 Latin America 1.51

Source: EFIDAS database

6.91 0.03 6.53 0.02 0.09 0.21 0.03 –

A. BLEACHED SULPHATE WOODPULP To: WORLD 27.22 13.74 North America 5.07 4.37 Europe 13.10 3.93 Former USSR 0.03 – East Asia 5.83 3.60 Other Asia-Pacific 1.80 0.81 Africa 0.19 0.11 Latin America 1.21 0.91

7.55 2.35 0.21 – 2.62 0.95 0.01 1.42

Europe

From: WORLD East Asia

0.07 – 0.01 0.05 – – – –

0.70 – 0.48 0.02 0.14 0.06 0.01 –

0.77 – – – 0.69 0.08 – –

0.08 – – – 0.05 0.03 – –

(million mt)

Former USSR

Trade flow patterns of bleached sulphate woodpulp and waste paper in 1997

N. America

Table 6.7

0.79 – 0.01 0.01 0.05 0.71 0.01 –

1.46 0.02 0.26 – 0.80 0.37 – –

Other Asia-Pacific

0.02 – – – – – 0.02 –

0.21 0.01 0.13 – – 0.05 0.02 –

Africa

0.19 0.10 – – – 0.01 – 0.09

4.13 0.64 1.76 – 1.14 0.27 0.02 0.30

Latin America

TRADE FLOW PATTERNS AND TRENDS

THE INTERN ATION AL TIMBER TRADE

Bleached sulphate woodpulp This category of woodpulp accounts for about 78% of world trade in woodpulp, and the trade patterns shown in Table 6.7 are therefore reasonably representative of woodpulp as a whole. North America exported half the world total of bleached sulphate woodpulp of 27 million tonnes in 1997, Europe taking a quarter and Latin America 15%. Europe imported nearly half of the total, East Asia more than a fifth and North America less than a fifth. The main trade flows are intra-European, intra-North American and from North America to Europe and East Asia. Latin American exports to Europe and East Asia have grown appreciably in the past decade.

Waste (recovered) paper Also referred to as secondary fibre, waste paper or recovered paper is included as a wood product by virtue of the fact that it mostly originated from wood and is an integral component of the wood supply–demand balance. In many countries it has become an increasingly important part of the fibre furnish for paper and paperboard. In 1997 world exports amounted to 17 million tonnes, with Europe and North America each accounting for some 45% of the total. Europe, East Asia and Other Asia-Pacific between them accounted for three-quarters of total imports. Trade is therefore concentrated between these regions, with intra-European being the most important. Trade and use of waste paper have been stimulated in some countries by legislation requiring that the fibre furnish of certain paper and paperboard grades contains a given proportion of secondary fibres for environmental reasons.

Newsprint Paper and paperboard are included here in order to have a complete view of the trade in wood products as a whole, but more detail can be found in the companion volume The International Paper Trade by Tom Bolton (1998). Of the three groups of paper and paperboard shown in Table 6.8, newsprint is the most homogeneous, with a single end-use – newspapers. Of the world total of exports in 1997 of 18 million tonnes, North America and Europe between them accounted for 90%. Because of the large volume of intra-regional trade, they also accounted for an appreciable share, 70%, of imports, but Other Asia-Pacific, East Asia and Latin America were also sizeable importers. 142

From: WORLD

143

Source: EFIDAS database

22.13 1.45 17.33 0.18 0.58 1.55 0.39 0.65

19.04 0.38 15.68 0.19 0.70 1.23 0.58 0.28

10.31 2.90 1.80 – 2.15 1.18 0.19 2.08

6.54 0.11 5.27 0.02 0.23 0.74 0.12 0.05

Europe

4.70 3.58 0.17 – 0.20 0.22 0.03 0.50

9.91 6.31 0.77 – 1.12 0.58 0.07 1.06

N. America

East Asia

0.54 – 0.23 0.14 0.02 0.13 0.01 –

0.23 – 0.05 0.08 – 0.04 0.05 0.01

0.84 0.02 0.18 0.11 0.12 0.38 0.01 0.02

5.77 0.08 0.05 – 5.31 0.30 0.01 0.02

1.77 0.08 0.01 – 1.39 0.26 0.01 0.01

0.23 0.06 – – 0.10 0.06 – –

(million mt)

Former USSR

Trade flow patterns of paper and paperboard in 1997

A. NEWSPRINT To: WORLD 18.29 North America 6.55 Europe 6.23 Former USSR 0.13 East Asia 1.76 Other Asia-Pacific 2.11 Africa 0.22 Latin America 1.30 B. PRINTING AND WRITING PAPER To: WORLD 30.66 North America 5.24 Europe 17.73 Former USSR 0.26 East Asia 2.65 Other Asia-Pacific 2.61 Africa 0.64 Latin America 1.52 C. OTHER PAPER AND PAPERBOARD To: WORLD 38.08 North America 3.55 Europe 17.99 Former USSR 0.34 East Asia 8.95 Other Asia-Pacific 3.58 Africa 0.88 Latin America 2.79

Table 6.8

1.45 0.02 0.05 0.01 0.67 0.66 0.03 –

0.92 0.01 0.04 – 0.45 0.36 0.06 0.01

0.52 0.02 – – 0.17 0.32 – –

Other Asia-Pacific

0.23 – 0.07 – 0.06 0.05 0.05 0.01

0.06 – 0.01 – – 0.02 0.02 0.01

0.05 – – – 0.01 0.02 0.02 0.01

Africa

0.75 0.16 0.10 – 0.05 0.03 0.01 0.40

0.85 0.12 0.11 – 0.03 0.17 0.09 0.33

0.21 0.01 0.01 – 0.01 0.02 – 0.16

Latin America

TRADE FLOW PATTERNS AND TRENDS

THE INTERN ATION AL TIMBER TRADE

Printing and writing paper Those types of printing and writing paper connected with computerisation and electronic communications, such as typing, photocopy, fax, and computer print-out paper, have experienced rapid growth over the past decade or two, which has been reflected in the expansion of trade. In 1997 world exports had reached nearly 31 million tonnes, of which Europe accounted for 72% of exports and 58% of imports. Intra-European trade alone made up for more than half the world total. Trade in North America came a quite distant second, followed by East Asia and Other Asia-Pacific. Europe has built up a strong net export position in these papers, exports exceeding imports by 4.4 million tonnes in 1997 and shipments overseas being widely distributed to other regions.

Other paper and paperboard Within this heterogeneous group of products, the two largest categories are household and sanitary tissues and wrapping and packaging paper and paperboard. World trade in other paper and paperboard as a group reached 38 million tonnes in 1997. Europe accounted for half the export total and just under half of the imports. North America and East Asia between them made up a further 42% of exports and 33% of imports. As with printing and writing paper, therefore, trade in other paper and paperboard is concentrated in the industrialised northern regions, although Other Asia-Pacific, Africa and Latin America between them accounted for 19% of world imports in 1997, and the volume of trade from North America and Europe to them was substantial.

Major changes in trade flows The opening up of new forest areas, the over-exploitation of others, the building of new wood-processing capacities and changes in import demand are among the reasons for the patterns of trade to alter over time. Figure 6.1 shows the changes in the shares of the main intra-regional and inter-regional trade flows of wood products in total between 1983 and 1997. The total value of world trade increased by 186% over the 14-year period. Trade flows which expanded at a rate greater than the world average and increased their shares of world trade were intra-Europe and intra-Asia Pacific (i.e. East Asia and Other Asia-Pacific combined). Those that lost some of their share of the world total were intra-North America and North American exports to AsiaPacific and Europe. 144

TRADE FLOW PATTERNS AND TRENDS

% of value of world trade

40 35

33.9

35.8

30 25 20 15 10

19.5 17.0

18.3

15.7 13.1 10.2

8.6 8.3

6.4

5 0

4.5

4.4 4.4

Intra-Europe Intra-North Intra-AsiaNorth North Europe to America Pacific America to America to Asia-Pacific Asia-Pacific Europe 1983

All other trade flows

1997

6.1 Shares of main trade flows of wood products in total, 1983 and 1997 (source: EFIDAS database).

Some of the more important changes in the volumes of trade in specific products between regions from 1983 until 1997 inclusive are shown in Tables 6.9 and 6.10. In the case of industrial roundwood, coniferous and nonconiferous, changes in classification have made it difficult to reconcile trade data from the mid-1990s onwards with earlier data. This is why statistics for 1983, 1988 and 1993 are not shown in the table. Nevertheless, some general comments on long-term trends in trade of coniferous and non-coniferous industrial roundwood can be made.

Coniferous industrial roundwood A very large trans-Pacific trade flow in coniferous industrial roundwood, mainly from the Pacific North-West of the USA to Japan, reached a peak in the early 1990s, since when it has declined sharply as supplies were constrained under pressure to protect the environment. This trade has been partly replaced by exports from the Far East of the Russian Federation, New Zealand and Chile to East Asia. Exports from the former USSR to Europe have risen substantially since 1983, but after the disruption caused by the breakup of the Soviet Union, the three Baltic states have emerged as important exporters, mainly to the Nordic countries, partly at the expense of the Russian Federation. 145

146

East Asia East Asia East Asia East Asia

North America East Asia

Wood chips North America Other Asia-Pacific Africa Latin America

Sawn softwood North America North America 22 221 4 638

4 575 11 033 748 –

.. .. .. .. ..

Non-coniferous industrial roundwood Europe Europe Former USSR Europe Other Asia-Pacific East Asia Africa Europe Africa East Asia

1983

.. .. .. ..

To:

Coniferous industrial roundwood North America East Asia Former USSR Europe Former USSR East Asia Other Asia-Pacific East Asia

From:

33 850 7 209

6 738 10 166 839 695

.. .. .. .. ..

.. .. .. ..

1988

35 650a 8 610a

9 310 9 394 540 4 017

.. .. .. .. ..

.. .. .. ..

1993

9 254 6 905 6 076 5 985

1995

40 240a 8 375a

.. .. 2 661 5 867

7 721 12 319 10 327 2 854 962

(1000 m3)

42 210a 8 865a

.. .. 2 559 5 090

6 328 6 740 9 605 2 164 1 535

9 254 5 222 6 894 6 315

1996

41 440a 7 150a

8 590a 9 630a 2 139 5 010

8 707 7 575 7 143 2 402 2 230

7 214 7 003 8 232 6 480a

1997

Table 6.9 Major changes in trade flows between regions of selected wood raw materials, sawnwood and wood-based panels, 1983–1997

THE INTERN ATION AL TIMBER TRADE

147

Europe East Asia Other Asia-Pacific

Europe Europe East Asia

Sawn hardwood Other Asia-Pacific Other Asia-Pacific Other Asia-Pacific

Plywood Former USSR Latin America Other Asia-Pacific

Adjusted to improve consistency with value data Source: EFIDAS database

a

Compressed fibreboard (hardboard and MDF) North America North America Europe Europe Other Asia-Pacific East Asia

Particle board, including OSB North America North America Europe Europe

East Asia Europe East Asia North America East Asia

Europe Former USSR Other Asia-Pacific Latin America Latin America

119 523 17

537 4 298

162 61 500

2 152 738 1 663

8 3 474 259 46 36

78 1 026 74

1 457 5 708

239 227 4 248

2 129 2 929 3 013

12 4 311 287 306 13

245 1 640 358

2 820 6 448

333 291 8 196

1 214 3 030 3 962

288 3 026 644 443 368

301 2 178 553

4 114 7 436

571 326 8 449

720 2 121 2 990

811 4 598 721 636 644

336 2 623 550

5 232 7 920

552 312 8 908

673 1 705 2 927

1 175 5 515 748 977 560

425 3 066 669

6 023 8 292

582 298 7 345

695 1 521 2 340

1 627 6 571 717 1 226 966 TRADE FLOW PATTERNS AND TRENDS

148

Source: EFIDAS database

Other paper and paperboard North America North America North America East Asia North America Latin America Europe Europe Europe Other Asia-Pacific East Asia East Asia

North America North America Europe East Asia East Asia

Printing and writing paper North America Europe Europe East Asia Other Asia-Pacific 939 795 781 7933 744 526

787 344 4969 135 3

266 2734 74

East Asia Europe Other Asia-Pacific

Newsprint North America Europe Former USSR

1983

1632 27 151 629 256

To:

1201 1081 960 9773 803 602

1981 1184 9032 397 52

546 3769 104

2783 32 361 563 323

1988

1 942 1 410 1 277 11 985 1 066 1 300

2 493 1 437 12 469 985 124

918 4 428 255

3 297 169 629 1 648 901

1993

(1000 mt)

2 338 1 565 1 701 13 804 1 056 1 644

3 003 1 595 15 401 1 112 208

1 006 4 858 387

3 811 368 679 1 725 829

1995

2 559 1 981 1 761 14 297 1 160 3 887

3 001 1 160 15 390 1 594 315

1 277 4 702 332

3 769 743 647 1 825 1 083

1996

Major changes in trade flows between regions of bleached sulphate woodpulp and paper and paperboard, 1983–1997

Bleached sulphate woodpulp North America East Asia Other Asia-Pacific East Asia Latin America North America Latin America Europe Latin America East Asia

From:

Table 6.10

2 902 2 145 2 081 15 681 1 228 5 312

3 580 1 449 17 330 1 388 447

1 119 5 268 375

3 602 804 636 1 764 1 142

1997

THE INTERN ATION AL TIMBER TRADE

TRADE FLOW PATTERNS AND TRENDS

Non-coniferous industrial roundwood Exports from Africa, mainly west Africa, of non-coniferous industrial roundwood, almost entirely hardwood sawlogs and veneer logs, to Europe in the late 1990s were appreciably lower than in the 1980s and earlier, but this was offset by a strong rise in exports to East Asia. There was also a shift in the importance of the exporting countries: in the earlier period the Côte d’Ivoire accounted for as much as half of Africa’s exports, and Gabon for a quarter. In the 1970s Ghana had been among the leading exporters and in the 1960s Nigeria also, but resource depletion in these countries caused log exports to decline. By the late 1990s the largest African exporters of tropical hardwood logs were Gabon, Cameroon and Equatorial Guinea, and their main customers in Europe were France and Italy, and in East Asia China and Japan. A similar pattern of change occurred in the Pacific Basin. Exports from Other Asia-Pacific to East Asia declined considerably, although this trade, consisting of tropical hardwood sawlogs and veneer logs, remained the largest inter-regional flow. Whereas in the 1970s Indonesia, Malaysia (Sabah and Sarawak but not peninsular Malaysia) and the Philippines were the major tropical hardwood log exporters, after the mid-1980s Indonesia and the Philippines virtually disappeared as log exporters as a result of resource depletion and log export bans, leaving Malaysia, Papua New Guinea and the Solomon Islands as the largest exporters in the late 1990s. Indonesia compensated for the cessation of log exports by growth first in exports of sawn hardwood and then of plywood and is currently the world’s largest plywood exporter. In the northern hemisphere, the volumes of trade in temperate sawlogs and veneer logs did not vary greatly over time, and the main changes concerned trade in other non-coniferous assortments, mainly pulpwood. The Nordic countries imported large quantities from the Russian Federation as well as the from Baltic states in the 1990s.

Wood chips East Asia, and in particular Japan, has grown to become the predominant importer of wood chips from the rest of the world, with increasing supplies of softwood chips coming from north-west North America, both the USA and Canada, hardwood (eucalyptus) chips from Australia, softwood chips from South Africa and softwood and hardwood chips from Chile. Whereas the chips from North America are produced from sawmilling and plywood residues, those from other sources are mainly produced directly from forest trees and this has been a matter of environmental controversy in Australia for many years. 149

THE INTERN ATION AL TIMBER TRADE

Sawn softwood The largest volume expansion in sawn softwood trade between 1983 and 1997 was that within North America, from Canada to the USA. There were also strong increases in East Asian imports from North America, both Canada and the USA, Latin America, mainly Chile, and even from as far away as Europe, mainly Sweden, Finland and Austria. Chile also increased its exports strongly to North America. While total exports of sawn softwood from the former USSR generally fluctuated between 7 and 8 million m3 a year in the 1970s and 1980s, there was a decline from the Russian Federation in the early 1990s, which was offset, as far as exports to Europe were concerned, by increasing shipments in the latter part of the decade from the Baltic states to the United Kingdom, Germany and other western European countries.

Sawn hardwood Sawn hardwood exports from Other Asia-Pacific, led by Malaysia, reached a peak in the early 1990s, thereafter showing a declining trend, partly because of resource constraints but probably more importantly as the trade in added value products developed. The decline after 1993 was common to shipments to all Other Asia-Pacific’s main markets, East Asia, Europe and intra-Other AsiaPacific. Some of the fall in Pacific Basin trade in 1997, 1998 and 1999 (data not to hand at time of writing) could be attributed to the downturn in markets as a result of the financial crises in some Asian countries, which were recovering in 2000.

Plywood There was a dramatic expansion in Indonesia’s production and exports of plywood in the 1980s, starting from a low level to become the world’s leading exporter during the 1990s. Growth of exports from Malaysia in the late 1980s and early 1990s was also impressive, and by 1997 these two countries accounted between them for three-fifths of world exports, their main markets being in East Asia, as Table 6.9 shows. There have been marked shifts in the export pattern of plywood in the Pacific Basin over the past three decades or so. In the 1970s, South Korea and Taiwan Province of China, both in-transit processors of imported tropical logs, were the leading exporters, with another in-transit processor, Singapore, also prominent. In the 1980s production shifted closer to the forest resource, and Japan, which had been largely dependent on domestic production from imported 150

TRADE FLOW PATTERNS AND TRENDS

logs, as well as China and South Korea, began importing large volumes of plywood. Europe, although a smaller market for plywood than East Asia, considerably increased its imports of plywood from the former USSR and Latin America, mainly Brazil, partly to make up for stagnating domestic production in countries that had earlier imported tropical logs. Latin American exports to North America rose between 1983 and 1997, as did North America’s to East Asia. In general, the trade flow pattern of plywood in the late 1990s showed significant changes from that in the early 1980s, reflecting shifts in the raw material base and in production strategies in many of the leading trading countries.

Particle board The main growth in trade in particle board between 1983 and 1997 was intra-European and intra-North American. In Europe, the increasing specialisation of production led to expanding two-way trade. Germany, for example, which is the region’s largest producer, exported 1.48 million m3 and imported 1.55 million m3 in 1997, mainly to and from its neighbours. In the case of North America, the main factor during the 1990s was the steep rise in production of OSB in Canada and its exports to the USA.

Compressed fibreboard (hardboard and MDF) Intra-European and intra-North American trade was also the area of growth for compressed fibreboard in the 1990s, and in both regions the driving force was the expansion of the MDF market. In Other Asia-Pacific, Malaysia and New Zealand were the leading exporters of MDF, with their main markets in East Asia.

Bleached sulphate woodpulp East Asia has grown to be the leading importing region of bleached sulphate woodpulp, complementing its role as the main importer of wood chips for pulping (Table 6.10). It has drawn increasing supplies of woodpulp from North America, Latin America, mainly Brazil and Chile, and Other Asia-Pacific, notably Indonesia and New Zealand. Latin America has also become an increasingly important supplier to Europe and North America, benefiting from production based on fast-growing pine and eucalyptus plantations. 151

THE INTERN ATION AL TIMBER TRADE

Newsprint The volume of intra-North American trade in newsprint remained the largest flow in the 1980s and 1990s. While that trade remained fairly stable, intraEuropean trade nearly doubled between 1983 and 1997. Although the volume was quite small in comparison, exports from the former USSR to Europe grew strongly, and newsprint was one of the few products of which exports from the former USSR were markedly higher in 1997 than in the 1980s. North American exports to East Asia also showed considerable growth.

Printing and writing paper Practically all trade flows in printing and writing paper in 1997 were much greater in 1997 than in 1983 – that from Europe to the former USSR was one exception. Table 6.10 shows some of the larger changes, notably in intraEuropean trade, intra-North American and intra-East Asian.

Other paper and paperboard Trade flows in other paper and paperboard were also generally much larger in 1997 than in 1983; and as for printing and writing, the largest increases were intra-European, intra-East Asian and intra-North American. Exports from North America to other regions also rose considerably, notably to Latin America and Other Asia-Pacific, which also imported on an increasing scale from Europe. The figures in Tables 6.9 and 6.10 highlight many of the important changes in trade flow patterns during the 1980s and 1990s, but there have also been some interesting smaller changes. One has been the growth of exports of coniferous industrial roundwood and sawn softwood from the Baltic states (Estonia, Latvia and Lithuania), which is concealed within the total figures for exports from the former USSR. Another has been the rise in exports of MDF from Ireland, reflecting its shift from being heavily importdependent for wood products towards becoming eventually a net exporter based on its expanding plantations. The role of plantations in a number of other countries, including Brazil, Chile, New Zealand, South Africa and Portugal, in providing the raw material base for exports of raw materials or products has also become increasingly important. At the same time, the possibilities to harvest and export high-quality wood from old-growth or natural stands have been diminishing. This was already apparent many years ago in the virtual disappearance of some countries, such as the Philippines, Nigeria 152

TRADE FLOW PATTERNS AND TRENDS

and the Côte d’Ivoire, as hardwood log exporters, and the more recent decline in softwood log exports in the United States. In some cases, these developments have resulted in new trade flows emerging, for example the growth of hardwood log exports from Papua New Guinea, despite the fact that the species composition of exports from there was quite different to that from South-East Asian suppliers. Converters and consumers in importing countries have learned how to adapt to the different properties of new species. In other cases, importers and consumers have adapted by taking up alternative materials, such as MDF for sawnwood and other types of panels, OSB for plywood, and so on. The role of in-transit processing has also been declining, as capacity has either been concentrated closer to the raw material base – as for example plywood in Indonesia and woodpulp, paper and paperboard in the Nordic countries – or to the consumer, as partly the case with paper and paperboard in Japan. These shifts are part of a continuing process, the future course of which is not easy to predict. No doubt one of the factors that will influence such shifts, at least for certain wood products, will be the future course of globalisation and the merging of wood products industries into ever fewer and larger companies.

153

CHAPTER

7 The major players

Trading structures and corporate players Trading structures

B

etween the forest and the ultimate consumer there may be many stages in handling, transforming, transporting and utilising the tree. Between the stages there may be a change of ownership of the wood raw material or product, involving a commercial transaction. The number of stages varies according to the degree of sophistication of the final product and the distance between the forest and the consumer, and a flowchart of all the movements of wood along the different chains of supply would be quite complex. The main stages include the following: • • • • •

Felling of the standing tree. Primary conversion (e.g. cutting of the log to length, debarking, chipping). Primary processing (e.g. production of sawnwood, veneer sheets, particle board, woodpulp). Secondary processing (e.g. production of plywood, fibreboard, paper and paperboard and other products of woodpulp). Tertiary and further processing (e.g. production of furniture, building 154

THE MAJOR PLAYERS

•

components and prefabricated buildings, packaging and other manufactures of sawnwood and wood-based panels, manufactures of paper and paperboard). Application (e.g. in construction, printing, etc.) or use of the product.

People are not only involved at each stage, but also in the movement and handling of the wood, both as raw material and processed product, between the stages. This includes extraction from the felling site, transport to the primary processing mill and of the processed products along the chain to the final consumer, storage and handling at wholesalers, retailers and consumers, and at all stages the negotiations and paperwork connected with the commercial transactions involved. International trade may be involved at any stage of supply after the wood raw material has left the forest and it may occur more than once.Thus, roundwood from country A’s forest may be exported for processing into sawnwood in country B, which exports the sawnwood for secondary or tertiary processing in country C, which exports the final product, e.g. furniture, to country D. The flowpath could be a lot simpler than that or even more complicated. An example of a simpler path, not involving international trade, would be the sale of roundwood by a forest owner to a neighbour for use in unprocessed form as fencing material or building poles. A more complex path might involve the following steps: • •

•

• • •

Felling of tree, extraction to roadside, sale to sawmill. Road transport to mill, storage, cutting to length, debarking, sawing into sawnwood, air-drying or kiln-drying, sorting, packaging, sale for export. Rail transport to port, loading on board ship, ship transport to port of destination, unloading, transport to importer’s timber yard, storage. Regrading and resawing to specifications of customer, e.g. roof truss manufacturer, sale and road transport to customer. Use of sawnwood in truss production, sale of trusses to building contractor, transport to building site. On-site incorporation of trusses in housing, sale of houses to ultimate consumer, the new home owner.

To this highly simplified description of a flowpath a number of comments should be added: 1

The roles of sawnwood producer and exporter have been combined here. In practice, the sawmiller may consign his product to a specialised export organisation. 155

THE INTERN ATION AL TIMBER TRADE

2

3

4

5 6

The exporter is supported by an agent, whose role is to act as go-between in the negotiations between him and the importer, including shipping arrangements. The example does not include the production, handling and utilisation of by-products, such as bark, sawdust, mill residues and chips at the sawmilling stage as well as at later stages of processing, e.g. sawdust, shavings and other residues from resawing and truss production. Different forms of transport may be used at each stage. For the transport of logs to the mill, floating is still used in some countries, for instance Finland and some tropical countries, but road transport is the most common method and in some cases rail. Road, rail, barge or ship, or combinations of all of them, may be used to move the processed products, according to location of the mill and the customer. In this example, the roles of importer, wholesaler and retailer are in effect merged. Variations to this flowpath are possible. For instance, the production of roof trusses might be carried out in the exporting country, even as an integrated operation with sawmilling. Or the producer/exporter of sawnwood may sell and ship directly to the truss producer in the importing country, thereby reducing the cost of ‘middlemen’. This type of operation has become increasingly used as improvements in communications and such developments as containerisation and roll-on roll-off ferries, as well as the need for ‘just-in-time’ deliveries to reduce storage costs, have made it more attractive.

The growth in international trade in wood products in past decades has been made possible to a considerable extent by advances in transport and handling technology, some of which have already been mentioned, such as packaging, containerisation and roll-on roll-off ferries. There has also been the development of specialised carriers such as container ships and bulk carriers for logs, chips, sawnwood and other products, which play a particularly important role in trans-Pacific trade. Inland waterways have also been a common means for the movement of wood products by barge, while in the past, floating was one of the ways of transporting roundwood to the mill in some places such the Nordic countries and North America, as well as in the tropics. Increasingly, however, rail and road transport have come to account for the major part of non-maritime shipments, for example within Europe and within North America. Where distances are not too great, the convenience of road transport for door-todoor delivery may outweigh the disadvantage of possibly higher costs. 156

THE MAJOR PLAYERS

Corporate players Thousands of companies are involved in the wood products trade. The way these companies operate varies from country to country and to some extent according to the types of product they are trading. To take the sawnwood trade in Europe as an example, many of the exporters and importers were traditionally family-owned companies, established in the eighteenth or nineteenth century, but in some cases earlier. During the latter part of the twentieth century, the increasingly rapid changes in trading practices and intensifying competition resulted in many of them going out of business or merging into larger, sometimes joint stock companies. To some extent the old family traditions of trading have disappeared and been replaced for better or worse. This process has not finished, and new developments, notably e-commerce, are bringing constant change to the trade. In the main exporting countries with formerly planned economies such as the USSR, Poland and Czechoslovakia, trade used to be handled by a Statecontrolled central organisation. Producers allocated a proportion of their output to the organisation for export sale. For example, up to the end of the 1980s, all wood products exports from the USSR, as well as its imports, were traded by EXPORTLES, the All-Union Wood Agency. As a result of the transition process towards a market economy, export activity was liberalised during the 1990s. While EXPORTLES continues to operate in the form of a joint stock company, a number of other companies have been established, the primary activity of which is the export of wood products (Burdin 2000). Individual mills may export, subject to licence. In Japan, international trade in wood products is concentrated to a large extent in the hands of a number of general trading houses, or sogo shosha, most of which are parts of larger groups arranged around traditional family firms or banks. While there are several thousand sogo shosha, only a handful, including Mitsubishi, Marubeni and C Itoh, control most of the trade in wood products and have been involved in large-scale timber operations overseas (Dudley and Stolton 1994). There are also, however, a large number of smaller companies that buy wood from abroad. Several paper companies also have overseas forest concessions, mills or subsidiaries, including Honshu Paper Co., Oji Paper and Sanyo-Kokusaka Pulp Co. South Korea’s industry and trade structure, which is dominated by a few large groups called chaebol, is quite similar to that of Japan. Most of the large chaebol are involved in the wood products trade, but in addition to them there are many small and medium-sized trading firms. Countries where the international trade in wood products is a monopoly through State control or an oligarchy through domination by a small number of big enterprises are in a small minority. In most countries such 157

THE INTERN ATION AL TIMBER TRADE

trade is conducted by private companies, either family-owned or joint stock companies, operating for the most part under open market conditions. As in industry and trade in general, there is a trend towards greater concentration and integration, but it would be reasonable to conclude that this trend has not reduced competitiveness in the market. On the contrary, competition in the international market for wood products remains keen, one indicator being the relatively modest level of profitability achieved over the years in parts of the sector. Indeed, a self-criticism sometimes heard within the sector is that too much effort is expended by wood companies competing with each other, and not enough on fighting the competition from alternative materials.

Major trading nations In Chapter 5, Table 5.3 showed the ‘Top 20’ exporting and importing nations of wood products. In fact, as many as 15 of them figured in the lists of both exporters and importers, so that the number of countries accounting for the bulk of international trade in wood products is fairly limited. Here, we take a look at these countries on an individual basis, pointing out why they are important as trading nations, the main commodities in which they trade and their main trading partners. They are divided into three groups: (1) those that are very important both as exporters and importers: the USA, Germany and France; (2) major net exporting countries: Canada, Finland, Sweden, Indonesia, Austria, Malaysia, Russian Federation, Brazil; and (3) major net importing countries: Japan, China, United Kingdom, Italy, Netherlands, South Korea. There are also a number of others, which deserve special mention because of their importance in international trade in particular commodities, and these are also discussed. Among exporting countries, they include Chile, New Zealand, Portugal and South Africa; and among importing countries, Australia (also deserving mention as an exporter), Mexico and Thailand. Some basic trade data for these countries are given in Table 7.1. The three countries that are very important as both exporters and importers, the USA, Germany and France, are all net importers, although the ratio of the value of their exports to imports, which is between 0.8 and 0.9, is closer to unity than that of the major net importing countries in the table. Among the net exporting countries, Finland has the highest export to import ratio with 14.5, followed by Sweden and Canada with 7.4 and 6.5 respectively (1997 data). Table 7.1 is also interesting in showing the considerable differences between countries in the shares of product groups in total exports and 158

159

6.45 14.54 7.36 5.27 4.24 1.90 4.00 2.01

3 976 716 1 398 976 931 2 016 752 1 314

16 684 12 641 9 993 6 823 4 658 3 740

1 498 281 1 470 309 1 107 476 1 528

Major net exporting countries Canada 25 648 Finland 10 414 Sweden 10 295 Indonesia 5 142 Malaysia 3 952 Austria 3 835 Russian Federation 3 008 Brazil 2 647

Major net importing countries Japan 1 640 China 3 743 United Kingdom 2 124 Italy 2 651 Netherlands 2 667 South Korea 1 214

Other important trading countries Australia 802 Chile 1 436 Mexico 445 New Zealand 1 418 Portugal 1 422 South Africa 832 Thailand 575

Source: FAO database

0.82 0.90 0.80

Countries important as both exporters and importers USA 19 835 24 134 Germany 9 828 10 916 France 4 664 5 866

0.54 5.11 0.30 4.59 1.28 1.75 0.38

0.10 0.30 0.21 0.39 0.57 0.33

Ratio of exports to imports

Exports of all wood products (million US$)

55.1 17.7 0.4 33.1 3.0 24.6 4.4

0.1 9.6 0.9 0.2 1.0 –

0.8 0.8 1.2 0.4 21.7 2.5 34.8 2.3

11.1 3.5 6.2

Wood raw material

11.3 22.8 48.5 36.3 19.4 2.7 24.1

3.1 36.4 9.0 26.0 11.2 5.8

42.9 22.1 25.9 73.1 75.9 40.9 32.2 33.0

18.0 17.9 23.0

Sawnwood & woodbased panels

1.0 48.0 1.8 15.0 35.1 46.1 7.9

3.0 1.5 4.5 0.4 9.4 –

19.7 7.8 14.1 11.8 0.1 3.8 12.3 38.7

19.0 4.0 6.9

Woodpulp & waste paper

32.5 11.5 49.2 15.6 42.5 26.6 63.7

93.8 52.5 85.6 73.4 78.3 94.1

36.6 69.3 58.7 14.8 2.2 52.9 20.5 25.9

51.8 74.7 63.9

Paper & paperboard

Share of product groups in total wood products exports (%)

Exports and imports of the leading trading countries of wood products in 1997

Imports of all wood products (million US$)

Table 7.1

0.1 – 0.8 0.3 17.8 0.4 11.8

32.0 10.7 1.2 7.8 1.1 26.2

9.7 44.9 29.1 4.3 1.5 17.7 0.9 0.1

0.6 2.4 5.3

Wood raw material

24.6 0.4 18.6 11.9 15.5 23.2 31.8

48.4 27.8 30.6 33.5 32.5 29.5

21.5 16.4 23.9 6.2 12.5 25.7 16.0 14.9

40.2 26.8 21.7

Sawnwood & woodbased panels

6.7 1.4 22.3 1.6 5.6 9.1 19.4

10.8 12.6 10.0 22.5 14.4 31.2

8.0 9.2 11.3 63.9 3.9 16.0 4.0 10.9

11.4 20.0 19.1

Woodpulp & waste paper

68.6 98.2 58.4 86.1 61.2 67.3 36.9

8.8 48.9 58.2 36.2 52.0 13.1

60.7 29.5 35.7 25.6 82.1 40.5 79.2 74.1

47.8 50.8 53.7

Paper & paperboard

Share of product groups in total wood products imports (%)

THE INTERN ATION AL TIMBER TRADE

imports. The factors explaining these differences will be discussed below for individual countries, but they include legislation restricting the export of wood raw material (low percentage of that product group in Canada’s and Indonesia’s exports); development of woodpulp exports based on fastgrowing plantations (Brazil, Chile and South Africa); sawnwood and/or plywood exports based on natural tropical hardwood forest (Indonesia and Malaysia); among net importing countries, the use of waste paper in paper and paperboard manufacturing and the greater relative importance of paper and paperboard in total exports than in total imports; and so on. In the table for each country, its main trading partners are abbreviated as follows: ARG AUS AUSL BL BRA CAM CAN CHI CHN CIV CRO CZR DEN EGT FIN FRA GAB GER HUN IN IND IT JAP

= Argentina = Austria = Australia = Belgium–Luxembourg = Brazil = Cameroon = Canada = Chile = China = Côte d’Ivoire = Croatia = Czech Republic = Denmark = Egypt = Finland = France = Gabon = Germany = Hungary = India = Indonesia = Italy = Japan

LAT LIT MAL MEX NL NOR NZ PHI PNG POL POR RUF SAF SIN SK SOL SP SWE SWZ THAI TUR UK USA

= Latvia = Lithuania = Malaysia = Mexico = Netherlands = Norway = New Zealand = Philippines = Papua New Guinea = Poland = Portugal = Russian Federation = South Africa = Singapore = South Korea (Rep. of Korea) = Solomon Islands = Spain = Sweden = Switzerland = Thailand = Turkey = United Kingdom = United States of America

A word of warning should be given about the comparability of the data in the country tables. The source of the figures for total exports and imports of wood products in 1997 is the FAO database. The percentages of total trade taken by a country’s main trading partners are calculated from figures in the FAO Yearbook of Forest Products and the UN-ECE/FAO Timber Bulletin and, for reasons associated with the compilation of trade flow data, they may not always be consistent with the FAO database figures. The percentage shares 160

THE MAJOR PLAYERS

of total trade should therefore be treated as indicative rather than as fully reliable.

Countries important as both importers and exporters The three countries in this group, the USA, Germany and France, between them accounted for a quarter of world exports of wood products by value in 1997, and a slightly higher proportion of imports. While all three are net importers, the margin between their imports and exports is much less than that of other net importing countries. Features that they have in common to a greater or lesser degree include advanced economies, high per capita levels of consumption of wood products, important areas of forest available for wood supply, and well-developed wood-processing industries. Of the three, France has probably the most potential for moving closer to full selfsufficiency in wood products.

United States of America The USA is the largest importer of wood products in the world, and the second largest exporter after Canada. In 1997 its imports amounted to US$24.1 billion and exports to 19.8 billion, giving a net import value of 4.3 billion and an export to import ratio of 0.82. Being the leading world economy and with per capita income levels for all wood products among the highest in the world, its demand for wood products is huge. Despite a considerable forest resource and a wood-processing sector that is the largest in the world, it is still obliged to import part of its needs, all but a small part of which comes from its northern neighbour, Canada. At the same time, the USA is a major supplier of certain wood products to other regions, notably Japan and other countries around the Pacific Rim and in Europe. The principal wood products traded by the United States of America in 1997 and its main trading partners are shown in Table 7.2. With 217 million ha, the USA possesses the third largest area of forest among temperate and boreal countries after the Russian Federation and Canada. Ninety-one per cent (198 million ha) is classified as forest available for wood supply (FAWS), with a growing stock of 27 billion m3 ob (overbark) and net annual increment of 694 million m3 ob or 3.5 m3 ob per hectare. Annual removals in the late 1990s amounted to around 490 million m3 ub (underbark), so that even allowing for the volume of bark on removals and harvesting losses, the volume taken from the forest was still somewhat less than annual growth, although the margin was less than in most other temperate and boreal countries. The scope for further increasing removals of coniferous species, which accounted for about three-fifths of the total, 161

162 19 835 9 413 1 451 6 212 3 886 2 890 1 595 6 328 1 066 1 667 8 223

EXPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Chips (m3) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

JAP 20.2%; CAN 18.8%; CHN 7.9%; MEX 7.3% JAP 48.3%; CAN 40.5%; SK 7.9%; CHN 1.4% CAN 66.8%; JAP 7.8%; IT 3.8%; CHN 3.5% JAP 80.9%; CAN 17.1%; SK 1.1% JAP 36.9%; CAN 19.3%; SP 3.6%; IT 3.5% CAN 31.3%; CHN 10.8%; JAP 8.5%; IT 7.2% CAN 19.2%; UK 17.9%; GER 15.1%; NL 9.1% JAP 14.3%; MEX 11.4%; IT 10.9%; SK 9.6% JAP 36.7%; CHN 12.8%; BRA 8.0%; MAL 3.5% CAN 41.4%; AUSL 4.2%; SIN 3.0% CHN 16.6%; CAN 15.0%; MEX 7.3%; JAP 5.4%

CAN 77.7%; BRA 3.1%; FIN 2.9%; IND 2.0% CAN 96.6%; CHI 0.6%; NZ 0.4% CAN 44.2%; IND 19.9%; CHN 6.5%; BRA 5.4% IND 43.1%; CAN 16.1%; BRA 14.0%; MAL 7.6% CAN 94.1%; SWE 1.6%; NZ 0.4% CAN 84.6%; BRA 10.4%; SAF 1.5%; CHI 1.1% CAN 96.7%; NOR 0.7%; SWE 0.4% CAN 48.0%; FIN 15.6%; NOR 6.7%; GER 6.5% CAN 74.8%; FIN 4.8%; GER 3.4%; JAP 2.1%

Main trading partners

Country abbreviations: See page 160 Sources: FAO database; FAO Yearbook of Forest Products 1997; UN-ECE/FAO Timber Bulletin Vol. LI, Nos. 2 & 5

24 134 42 514 1 096 1 868 5 948 5 805 7 168 5 257 1 933

IMPORTS Total wood products (1000 US$) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Particle board (incl. OSB) (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

The principal wood products traded by the USA in 1997 and its main trading partners

Commodity

Table 7.2

54.2% 98.1% 81.9% 99.1% 63.3% 57.8% 61.3% 46.2% 61.0% 48.6% 44.3%

85.7% 97.6% 76.0% 80.8% 96.1% 96.6% 97.8% 76.8% 85.1%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

appears to be limited, if the principles of sustainability are to be respected, but that is not yet the case for broadleaved species. Concerns over environmental protection have resulted in a marked reduction in commercial logging activity in publicly owned forests, particularly in coniferous forests in the Pacific North-West, leading also to the closure of wood-processing plants. For most wood products, the USA is the leading world producer. In 1997, US production of sawnwood amounted to 114 million m3, of woodbased panels 39 million m3, of woodpulp 60 million tonnes, and of paper and paperboard 76 million tonnes, which represented about one-quarter of the world total – even more in the case of woodpulp. Particularly for woodpulp, paper and paperboard, there are many large-capacity mills, while the process of integration has reached the point where many of the top dozen or so international wood products companies are American-owned. Compared with many other exporting countries, the USA has a rather well diversified range of wood products exports, from softwood logs and chips, through sawnwood, both softwood and hardwood, plywood and woodpulp, to paper and paperboard. It exports throughout the world, but Japan and Canada are its largest markets, followed by China and Mexico. European countries are also important trading partners. In contrast to the diversified pattern of its exports, the USA depends to a large extent on one country, Canada, for its imports of wood products, this trade accounting for as much as 78% of its total imports. Its main imports are sawn softwood, paper and paperboard, woodpulp and particle board (mainly OSB), for all of which Canada is the leading supplier – for nearly 97% of the total in the case of sawn softwood and newsprint. Other countries that are important suppliers to the USA include Indonesia (sawn hardwood and plywood), Brazil (plywood and woodpulp) and several European countries (printing and writing paper). Germany Ranking fourth among importing countries in 1997 and fifth among exporters, Germany is a key player in the international trade in wood products. Its imports amounted to US$10.9 billion and exports to US$9.8 billion, with net imports of 1.1 billion and an export to import ratio of 0.9. This high degree of self-sufficiency is rather remarkable, given that Germany is Europe’s leading economy with high levels of consumption of wood products and a forest resource which is quite modest in terms of area of forest per inhabitant (0.13 ha/capita compared with a European average of 0.3). The principal wood products traded by Germany in 1997 and its main trading partners are shown in Table 7.3. Germany possesses 10.7 million ha of forest, all but 6% of which is 163

164 9 828 3 277 755 3 522 1 895 1 544 770 4 384 2 636

EXPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Wood chips (m3) Sawn softwood (m3) Particle board (m3) Fibreboard (m3) Printing & writing (mt) Other paper & paperboard (mt)

Country abbreviations: See page 160 Sources: See Table 7.2

10 916 1 415 355 5 280 852 1 095 1 630 4 069 1 286 3 769 2 801

IMPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Particle board (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

FRA 12.2%; UK 10.3%; IT 8.5%; NL 8.0% AUS 36.4%; IT 13.7%; SWE 10.3%; CZR 9.9% DEN 20.6%; SWE 16.6%; IT 16.0%; AUS 8.9% FRA 49.1%; AUS 16.0%; BL 9.0%; SWE 8.9% IT 25.7%; FRA 18.8%; NL 15.7%; AUS 10.4% NL 15.8%; FRA 11.3%; DEN 10.6%; AUS 8.6% BL 16.1%; POL 12.1%; NL 11.3%; FRA 10.3% FRA 15.2%; UK 12.8%; IT 8.4%; NL 6.9% FRA 18.4%; NL 12.1%; BL 11.5%; UK 10.2%

FIN 15.6%; SWE 15.6%; FRA 8.2%; USA 7.3% CZR 38.6%; BL 31.5%; RUF 4.6%; SWE 3.3% USA 50.0%; FRA 14.5%; CAM 10.7%; GAB 2.2% SWE 22.0%; FIN 15.4%; CZR 11.6%; LIT 10.8% USA 11.9%; IT 10.2%; POL 8.8%; MAL 8.3% FIN 21.3%; IND 14.2%; USA 13.6%; FRA 6.2% BL 27.8%; AUS 22.4%; SWZ 14.2%; FRA 6.2% CAN 23.5%; SWE 20.8%; FIN 18.2%; USA 9.4% SWE 38.8%; FRA 13.9%; FIN 9.9%; NOR 6.5% FIN 28.1%; FRA 11.1%; SWE 9.5%; AUS 8.8% SWE 17.3%; FIN 12.1%; NL 11.2%; USA 8.7%

Main trading partners

The principal wood products traded by Germany in 1997 and its main trading partners

Commodity

Table 7.3

39.0% 70.3% 62.1% 83.0% 70.6% 36.1% 49.8% 43.3% 52.2%

46.7% 78.0% 77.4% 59.8% 39.2% 55.3% 70.6% 71.9% 69.1% 57.5% 49.3%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

classified as available for wood supply. The volume of growing stock on FAWS amounts to 2.8 billion m3 ob, the third largest amongst European countries after Sweden and France, and net annual increment (NAI) is nearly 90 million m3 ob or 8.8 m3 ob per hectare. The latter figure is the highest in Europe, and is explained partly by favourable growing conditions and partly by the high intensity of silviculture practised in the country. Removals in the late 1990s amounted to about 38 million m3 ub a year and, allowing for bark and unrecovered fellings, fellings were equivalent to only about 55% of NAI, meaning that the volume cut could be increased appreciably without jeopardising sustainability and explaining why the volume of growing stock has been rising quite strongly in recent decades. Supplementing wood from the forest, Germany has high recovery rates for industrial wood residues and waste paper as raw material for its wood-processing industries. Germany is the largest producer in Europe of paper and paperboard and wood-based panels in Europe and second largest after Sweden of sawnwood, but is not among the main producers of woodpulp, of which it imports about 70% of its requirements. Strict environmental regulations limit the possibilities for the establishment of pulpmills, but favour the recovery and utilisation of waste paper for papermaking. Germany is a major importer of most assortments of processed wood products, but its imports of wood raw material are relatively limited, amounting to only 2.4% of the total value of imports. Its purchases of imported wood products tend to be concentrated in its neighbouring countries, with Finland, Sweden and France accounting for two-fifths of the total, and the Czech Republic, Belgium–Luxembourg, the Russian Federation, Lithuania, Poland, Austria, Italy and Norway also being important suppliers, depending on the product. For example, the Czech Republic is its largest supplier of coniferous industrial roundwood, and Belgium–Luxembourg of particle board (mainly flaxboard). Overseas suppliers are of importance for nonconiferous industrial roundwood (USA, Cameroon, Gabon), sawn hardwood (USA, Malaysia), plywood (Indonesia, USA) and woodpulp (Canada, USA). In terms of value, nearly three-quarters of Germany’s wood product exports consist of paper and paperboard and a further 18% of sawnwood and wood-based panels. As is apparent from Table 7.3, the main partners for its exports are almost exclusively its neighbours in the European Union, but the destinations of its exports are quite diversified, and for example substantial volumes of sawn softwood and paper and paperboard are shipped to the USA, Japan and China. France France ranks seventh among both exporters and importers. In 1997 its imports amounted to US$5.9 billion and exports to 4.7 billion, with a net 165

THE INTERN ATION AL TIMBER TRADE

import value of 1.2 billion and an export to import ratio of 0.8. It is among the leading economies in Europe and a large consumer of wood products. Given that it has extensive areas of forest, it might be expected to be more self-sufficient in wood products than it is, but its net import position may be partly explained by the nature of its forest resource, which consists predominantly of broadleaved species, much of mediocre quality. The principal wood products traded in France in 1997 and its main trading partners are shown in Table 7.4. France has over 15 million ha of forest, the largest area after Sweden and Finland, and 95% of it is classified as available for wood supply. The volume of growing stock on FAWS amounts to 2.9 billion m3 ob, the same volume as in Germany but with a proportion of broadleaved species of 64% compared with only 31% in Germany and 15% in Sweden. Net annual increment on FAWS, at 92 million m3 ob, is the highest in Europe, and at 6.4 m3 ob/ha is well above the European average of 4.4. Annual removals in the late 1990s amounted to over 40 million m3 ub. Allowing for the volume of bark on removals and unrecovered fellings losses, the fellings to NAI ratio is 0.65, indicating considerable scope for raising the volume of removals without jeopardising sustainability. France is a large producer of wood products. It is the leading producer of sawn hardwood in Europe, and second after Finland of plywood; for both products it is partly dependent on imports of tropical hardwood logs. It is also the second largest European producer after Germany of particle board. France’s imports of wood products are well diversified in terms of commodity composition and, as for Germany, its trade is largely with its European neighbours. Exceptions to that are non-coniferous (hardwood) industrial wood and sawn hardwood, Gabon and Cameroon being major suppliers of the former and Brazil, the USA and Malaysia of the latter. For woodpulp also, an important part of its imports comes from overseas, Canada, the USA and Brazil. Regarding exports, France’s principal customers are, for the most part, its neighbours, led by Germany, Italy, Spain and Belgium–Luxembourg, and with the Netherlands and the United Kingdom also prominent. For some products, it is also shipping sizeable quantities to North African countries and the USA, and in a more recent development to China and other Asian markets.

Major net exporting countries The eight countries in this group are Canada, Finland, Sweden, Indonesia, Malaysia, Austria, the Russian Federation and Brazil. They accounted for 47% by value of total world exports of wood products in 1997, but for not much 166

167 4664 1848 565 1252 1292 1670

EXPORTS Total wood products (1000 US$) Non-coniferous industrial wood (m3) Sawn hardwood (m3) Particle board (m3) Printing & writing (mt) Other paper & paperboard (mt)

Data for some major trading partners not available Country abbreviations: See page 160 Sources: See Table 7.2

a

5866 1398 1278 1828 565 2136 1590 2105

IMPORTS Total wood products (1000 US$) Non-coniferous industrial wood (m3) Chips (m3) Sawn softwood (m3) Sawn hardwood (m3) Woodpulp (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

GER 21.3%; IT 12.3%; SP 11.7%; BL 9.6% BL 28.5%; IT 28.3%; GER 10.7%; SP 10.2% BL 20.6%; SP 18.7%; GER 11.9%; NL 9.4% GER 26.6%; UK 19.2%; SP 16.2%; IT 10.5% GER 26.5%; UK 16.1%; BL 9.5%; SP 9.3% GER 18.7%; UK 15.5%; IT 13.8%; SP 13.1%

GER 16.8%; FIN 12.9%; SWE 11.0%; BL 7.3% GAB 27.4%; CAM 15.9%; GER 18.1% GER 84.0% FIN 33.2%; SWE 21.2%; GER 18.1%; RUF 9.3% BRA 25.6%; IT 9.8%; USA 7.8%; MAL 6.6% CAN 18.2%; USA 18.2%; SWE 15.8%; BRA 8.8% GER 23.9%; FIN 21.9%; IT 8.4%; BL 8.0% GER 23.1%; SWE 15.9%; NL 9.7%; IT 8.2%

Main trading partners

The principal wood products traded by France in 1997 and its main trading partners

Commodity

Table 7.4

54.9% 77.7% 60.6% 72.5% 61.4% 61.1%

.. 81.8% 49.8% 61.0% 62.2% 56.9%

a

48.0%

Share of four main partners in total

THE MAJOR PLAYERS

THE INTERN ATION AL TIMBER TRADE

more than 8% of imports. They are mostly characterised by having extensive forest resources and large export-oriented wood-processing industries. With the exception of the Russian Federation, exports make up an appreciable part of their output of wood products. Depending on the state of their industrial development, the relative importance of the different groups of products in total exports varies. For example, wood raw material holds the largest share of exports by the Russian Federation, sawnwood and wood-based panels in Canada, Indonesia and Malaysia, woodpulp in Brazil, and paper and paperboard in Finland, Sweden and Austria. An interesting feature with regard to the last three named countries is the large amount of wood raw material which they import to supplement the input to their woodprocessing industries from domestic sources, while about 64% by value of Indonesia’s total imports consists of woodpulp. Canada Canada is the world’s largest exporter of wood products, with a value of US$25.6 billion in 1997. Surprisingly perhaps, it is also a major importer, ranking ninth in the world with a value of nearly US$4 billion. Nevertheless, with exports more than six times imports and a net export value of US$21.7 billion, Canada’s positive balance in wood products far outstrips that of any other country. A large part of its trade is with its neighbour to the south, the USA, to which it exported 71% of its total shipments in 1997 and from which it imported as much as 88% of its total imports. The principal wood products traded by Canada in 1997 and its main trading partners are shown in Table 7.5. With 245 million ha of forest and a further 173 million of other wooded land, Canada possesses the third largest area of forest and other wooded land in the world after the Russian Federation and Brazil. However, little more than half its area of forest, 126 million ha, is classified as available for wood supply, much of the remaining area being considered non-available for economic reasons, that is to say inaccessible to markets. Rather more than half the total forest area is described as being ‘undisturbed by man’, meaning that it is natural or old-growth forest, with the remainder having experienced significant intervention by man at some time or other in the past. The volume of growing stock on FAWS is estimated at 17 billion m3 ob, nearly threequarters of which consists of coniferous species. With such a high proportion of undisturbed forest, it is very difficult to assess the net annual increment. Natural losses, notably from fire, insects and disease, can approximately offset the gross annual growth. However, NAI on all forest has been estimated at about 440 million m3 ob, of which about half is on FAWS. Annual removals in the late 1990s were of the order of 190 million m3 ub, which after allowing for bark and unrecovered felling losses, roughly 168

169 3 976

IMPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

25 648 47 664 1 003 863 6 072 11 037 8 992 3 152 2 395

EXPORTS Total wood products (1000 US$) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Particle board, incl. OSB (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

71.3%; JAP 10.4%; GER 2.5%; CHN 2.5% 85.0%; JAP 11.4%; UK 0.7%; CHN 0.6% 60.9%; CHN 9.6%; UK 4.4%; GER 4.1% 38.7%; JAP 33.6%; GER 10.9%; UK 4.7% 95.1%; JAP 3.4%; SK 0.7%; CHN 0.3% 44.5%; JAP 12.6%; GER 7.3; CHN 6.5% 70.7%; CHN 4.2%; BRA 4.2%; UK 4.0% 93.0%; GER 0.6%; CHN 0.6%; FRA 0.6% 71.8%; CHN 4.2%; BL 4.1%; SK 4.0%

USA 88.4%; FIN 1.6%; GER 1.6%; BRA 1.3%

USA USA USA USA USA USA USA USA USA

Main trading partners

The principal wood products traded by Canada in 1997 and its main trading partners

Commodity

Table 7.5

92.9%

86.7% 97.7% 79.0% 87.9% 99.5% 70.9% 83.1% 94.8% 84.1%

Share of four main partners in total

THE MAJOR PLAYERS

THE INTERN ATION AL TIMBER TRADE

corresponds with the volume of NAI on FAWS. That is to say, it appears that removals could not be increased without causing a fall in growing stock, unless either some areas of unavailable forest became accessible to commercial harvesting or the intensity of silviculture were increased on FAWS or both. In parts of Canada, notably in British Columbia, a fierce debate has been raging about the negative environmental consequences of further depletion of old-growth stands, which have been the source of most of the wood harvest. Canada has a very large wood-processing sector, second in size only to the USA. While domestic consumption is high, both in volume and per capita, for most wood products exports are more important than the home market, and this is especially the case for such mass-produced products as sawn softwood, woodpulp and newsprint. The possibility for Canada to export sawn softwood (softwood lumber in North America) to the USA at very competitive prices has been the cause of friction over many years between the two countries, leading eventually to agreements on the conditions for trading in this commodity. Canadian sawn softwood, however, still accounts for a third of all sales in the USA. After the USA, Japan is Canada’s second largest market for sawn softwood, wood-based panels and woodpulp. China has been an expanding market for several products. European countries have traditionally been important markets for Canada, notably for sawn softwood, plywood and woodpulp, but trade with Europe has often been affected by exchange rates and has consequently fluctuated markedly. In 1997 the United Kingdom, Canada’s largest customer in Europe, took less than 1% of its exports. The percentage was much higher in some earlier periods. For geographic reasons, exports to Japan and other Pacific Rim countries come mainly from British Columbia. That province does also ship substantial quantities to Europe and other parts of the world, as do the Maritime Provinces and Quebec on the eastern side of the country. While there are legal restrictions on exports of roundwood from Canada, it is quite a significant importer of wood raw material. These imports, as well as those of other wood products, notably paper and paperboard other than newsprint, come very largely from the USA.

Finland In 1997 Finland was the third largest exporter of wood products after Canada and the USA, although the value of its trade, year by year, parallels closely that of Sweden. More than in Sweden, and even Canada, the forest and woodprocessing sector is a key element in Finland’s economy and trade. Its exports in 1997 amounted to US$10.4 billion, which was 14 times more than 170

THE MAJOR PLAYERS

its imports of US$700 million. The principal wood products traded by Finland in 1997 and its main trading partners are shown in Table 7.6. Seventy-five per cent of Finland’s land area is covered by forest and other wooded land, one of the highest levels of forest cover in the world. The area of forest amounts to 22 million ha, of which nearly 95% is classified as available for wood supply. The volume of growing stock on FAWS is 1.9 billion m3 ob, the fourth largest in Europe, and consists predominantly of coniferous species, Norway spruce and Scots pine, while broadleaved species, mainly birch, make up 18% of the total. Growing conditions vary from the severe in the Arctic tundra to relatively mild in the south of the country, and the average net annual increment is 3.5 m3 ob/ha giving a total on FAWS of 74 million m3 ob. Wood removals in the late 1990s amounted to over 50 million m3 ub a year. The ratio of fellings to NAI on FAWS has been calculated as 0.75, one of the higher ratios in Europe, but still theoretically leaving some margin for an increase in fellings without jeopardising the principle of sustainability. Finland has a well-developed wood-processing sector, oriented strongly towards the production of paper and paperboard as well as sawn softwood. Integration of woodpulp and papermaking has been promoted in recent years, with the result that production and exports of paper and paperboard, particularly of printing and writing grades, have expanded strongly, while exports of woodpulp have tended to decline. Another important feature has been the concentration of many Finnish industries into a small number of international-sized companies, which has also involved mergers with companies in other countries, both in Europe and overseas. While exporting throughout the world, Finland’s main customers are chiefly in Europe along shipping routes across the Baltic and North Seas. Its four leading customers, Germany, the United Kingdom, France and the Netherlands, account for nearly half its exports of wood products. For sawn softwood, however, there are sizeable markets in North Africa and the Middle East, and Egypt alone took 10% of Finland’s total exports of sawn softwood in 1997, with Algeria and Tunisia also important. Finland’s exports to Japan have been increasing. Finnish companies have expanded their production capacity of printing and writing paper very strongly, and exports of these grades accounted for more than half total exports of paper and paperboard in 1997 with European Union countries the main destination, but also the USA as a large market with 10% of total exports. Among the major net exporting countries, Finland is notable for having the largest share of exports of wood products by value in the form of paper and paperboard – 69% in 1997 – while sawnwood and wood-based panels, mainly plywood, accounted for a further 22%. In 1997 45% by value of Finland’s imports consisted of wood raw material, from its neighbours, the Russian Federation and Estonia. Besides 171

172 716

IMPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

10 414 7 509 861 1 751 1 211 6 374 2 576

EXPORTS Total wood products (1000 US$) Sawn softwood Plywood (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

RUF 35.2%; SWE 20.2%; GER 7.4%; UK 4.1%

GER 18.2%; UK 17.1%; FRA 7.0%; NL 6.1% UK 16.4%; GER 13.7%; EGT 9.9%; FRA 9.5% GER 27.7%; NL 12.2%; UK 9.3%; FRA 7.0% GER 42.2%; UK 15.1%; FRA 9.1%; IT 5.5% UK 24.8%; GER 14.0%; DEN 7.5%; SP 6.4% GER 17.4; UK 15.6%; USA 9.6%; BL 7.8% GER 13.8%; UK 12.3%; SP 9.7%; FRA 5.8%

Main trading partners

The principal wood products traded by Finland in 1997 and its main trading partners

Commodity

Table 7.6

66.9%

48.4% 49.5% 56.2% 71.9% 52.7% 50.4% 41.6%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

coniferous sawlogs and pulpwood, the imports include large volumes of nonconiferous pulpwood. Sweden Sweden was the world’s fourth largest exporter of wood products in value terms in 1997 with a total of US$10.4 billion. It also figured in the ‘Top 20’ list of importers (in nineteenth place) with US$1.4 billion, thus having net exports of 9 billion and an export to import ratio of 7.4. The principal wood products traded by Sweden in 1997 and its main trading partners are shown in Table 7.7. The area of its forest and other wooded land amounts to 30.3 million ha, or 74% of the total land area. This is equivalent to 2.4 ha per inhabitant. The values of forest cover and forest per inhabitant are very high by international standards and show that Sweden has a strong raw material base from which to export a substantial part of its production of wood derivatives. There are 21.2 million ha that are classified as forest available for wood supply (FAWS) with a growing stock of 2.93 billion m3 ob, the largest in Europe, of which 85% is coniferous (pine and spruce). Net annual increment (NAI) on FAWS is 85.4 million m3 ob, while fellings on FAWS amount to 66.5 million m3 ob out of a total reported volume of fellings of 67.8 million m3 ob. The fellings to NAI ratio on FAWS is thus 77%, explaining the trend towards a long-term increase in the volume of growing stock. Nevertheless this ratio is relatively high by European standards and suggests that the scope for further expansion of fellings may not be very great, assuming that the principle of sustainability will be respected. Annual removals in the late 1990s were of the order of 60 million m3 ub. Sweden is a major producer of wood products, the most important of which are sawn softwood (production of 15.4 million m3 in 1997), chemical woodpulp for paper (7.3 million tonnes), mechanical woodpulp (3.0 million tonnes), newsprint (2.4 million tonnes), printing and writing paper (2.5 million tonnes) and other paper and paperboard (4.9 million tonnes). Its industries are amongst the most technologically advanced in the world and, as a result of mergers and acquisitions in recent years, there is a high degree of concentration with three companies accounting for a large part of the total output of wood products. Exports reflect the pattern of production, with sawn softwood, woodpulp and paper and paperboard leading the way and accounting for 97% of the total value of exports of wood products in 1997. Sweden ships to many countries around the world, although the lion’s share goes to European countries and in particular to its EU partners. It is noteworthy that five of the six trading partners shown in Table 7.7 are Sweden’s neighbours within convenient shipping distance by road, rail or sea, Italy being the exception. Other 173

1 396

IMPORTS (1000 US$) Total wood products (1000 US$)

174

FIN 17.2%; NOR 13.8%; GER 11.9%; RUF 7.0%

GER 20.0%; UK 17.4%; NL 9.4%; DEN 6.8% UK 22.9%; GER 14.4%; DEN 12.3%; NL 8.9% GER 32.3%; NL 12.7%; FRA 9.7%; IT 7.7% UK 25.5%; GER 21.3%; DEN 6.7%; NL 5.8% GER 20.4%; UK 17.4%; NL 10.2%; FRA 7.5% GER 18.0%; UK 16.1%; NL 10.1%; IT 9.8%

Main trading partners

976

IMPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

5142 8500 1285 1213

EXPORTS Total wood products (1000 US$) Plywood (m3) Woodpulp (mt) Paper & paperboard (mt)

Total (1000 units)

..

JAP 29.2%; CHN 26.5%; USA 7.6%; SK 6.1% JAP 38.2%; CHN 18.2%; USA 7.4%; SK 4.7% CHN 39.9%; SK 18.3%; IT 7.1%; IN 5.9% CHN 67.6%; JAP 4.3%; MAL 4.1%; AUSL 3.5%

Main trading partners

The principal wood products traded by Indonesia in 1997 and its main trading partners

Commodity

Table 7.8

Country abbreviations: See page 160 Sources: See Table 7.2

10 295 10 902 2 863 2 105 2 153 3 957

EXPORTS Total wood products (1000 US$) Sawn softwood (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total exports (1000 units)

The principal wood products traded by Sweden in 1997 and its main trading partners

Commodity

Table 7.7

..

69.4% 68.5% 71.2% 79.5%

Share of four main partners in total

49.9%

53.6% 58.5% 62.4% 59.3% 55.5% 54.0%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

important partners within Europe include Norway, Spain, Belgium– Luxembourg and Austria, and in other regions the USA, Japan, China and Egypt for one or more of the commodities shown. While Sweden is a very large exporter, mainly of semi-processed and processed products, it also imports considerable volumes of wood products, mostly wood raw material to augment domestic supplies for industry. Indonesia Indonesia held sixth place among the world’s exporters of wood products in 1997, and first among the developing countries. Its exports amounted to US$5.1 billion and, with imports of just under one billion, its export to import ratio was 5.3. The principal wood products traded by Indonesia in 1997 and its main trading partners are shown in Table 7.8. Indonesia is a major forestry country with an area of forest of 110 million ha or 61% of the land area, as well as 29 million ha of other wooded land. Natural forest covers 104 million ha, and plantations 6 million. The natural forests are very diverse and they represent about 10% of the world’s total of tropical forest. They consist predominantly of broadleaved species divided into two classes: wetland land forests, comprising mangroves, swamp, peat and heath forests; and dry land forests, comprising tropical, montane and sub-alpine rainforests, and monsoon forests. There are small areas of naturally occurring coniferous forests, mainly Pinus merkusii and Agathis spp. Forests are mainly owned and administered by the State, and production forests are granted to private or State companies under logging concessions. The officially reported rate of deforestation is 1% a year, roughly a million ha, but unofficial estimates put the rate two or more times higher as a result of illegal logging and conversion of the natural forest to palm and rubber plantations. In several recent years, the smoke haze from fires set to clear the natural forest has created a hazard to health and air traffic, even in neighbouring countries. Problems of law enforcement, including corruption, have made it very difficult to bring illegal logging and exports under control, which have been compounded by pressures from a large and land-hungry population. In 1997 the reported volume of wood removals amounted to 202 million m3, of which 47 million (23%) was industrial wood, and the remainder fuelwood. Indonesia has been a major producer of hardwood plywood and sawn hardwood, while its output of woodpulp, paper and paperboard has been rising strongly during the 1990s. Plywood and sawnwood production has been based on a limited number of broadleaved (hardwood) species, notably meranti (Shorea spp.), ramin (Gonystylus bancanus) and keruing (Dipterocarpus spp.). 175

THE INTERN ATION AL TIMBER TRADE

Legislation has heavily restricted the export of roundwood (although illegal exports are said to be substantial) and more recently of sawnwood, in order to encourage further processing domestically. On the other hand, plywood exports are very important – Indonesia is by far the largest world exporter. Plywood is the main component in the 73% share by value of total wood products exports held by sawnwood and wood-based panels. Woodpulp and paper and paperboard account for nearly all the rest. As seen in Table 7.8, a large part of Indonesia’s exports of wood products are sent to Pacific Rim countries, with Japan and China alone accounting for 56%. For woodpulp, Italy and India are also important customers, although far smaller than China and South Korea. For imports, woodpulp accounted for nearly two-thirds by value of the total of wood products in 1997, needed to supplement domestic production to feed the strongly growing paper and paperboard sector.

Malaysia After Indonesia, Malaysia is the next most important exporting country of wood products, with a value of nearly US$4 billion in 1997. It comes eighth in the list of ‘Top 20’ exporters. With imports of over US$900 million, its net exports amount to US$3 billion and it has a ratio of exports to imports of 4.2. Like Indonesia, the commodity composition of its exports is heavily weighted towards sawnwood and wood-based panels, which made up 76% of total wood exports in 1997, with wood raw material (tropical hardwood logs) accounting for most of the remainder (22%). The principal wood products traded by Malaysia in 1997 and its main trading partners are shown in Table 7.9. Malaysia had a forest area of 15.5 million ha in 1995, covering 47% of the land area and divided between peninsular Malaysia and the states of Sabah and Sarawak on the island of Borneo (Kalimantan). Virtually all its forest is considered natural and is mostly comprised of broadleaved species from genera in the Dipterocarp family, including Dipterocarpus, Shorea, Parashorea, and Anisoptera. The area of forest plantations is still quite small, although there are extensive rubber plantations, which are also used for wood production. Deforestation is reported at the relatively high rate of 2.4% a year, although this is in accordance with a strategy for the conversion of part of the forest resource to other land uses, notably agriculture. There is official recognition for the need to leave a substantial part of the remaining forest either under reservation or managed according to principles of sustainability. In fact three-quarters of its remaining natural forests have been designated as Permanent Forest Estate (PFE) to be managed and developed sustainably. 176

931

IMPORTS Total wood products (1000 US$)

177

..

JAP 45.3%; CHN JAP 44.7%; CHN THAI 31.3%; JAP JAP 41.1%; CHN

21.8%; THAI 8.3%; SIN 8.0% 31.8%; IN 10.3%; SK 5.6% 16.3%; CHN 16.3%; SIN 14.7% 29.3%; SIN 12.4%; USA 3.9%

Main trading partners

2016

IMPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Source: See Table 7.2

3835 4838 1204 1857 819

EXPORTS Total wood products (1000 US$) Sawn softwood (m3) Particle board (m3) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

GER 37.5%; CZR 11.4%; SWE 8.9%; FIN 7.8%

IT 31.4%; GER 18.7%; SWZ 6.8%; FRA 5.7% IT 71.9%; JAP 11.6%; GER 8.7%; SWZ 2.9% GER 36.5%; IT 31.0%; SWZ 8.9%; UK 3.6% GER 19.4%; IT 12.5%; FRA 12.0%; UK 11.4% GER 26.0%; IT 20.1%; FRA 4.8%; BL 4.5%

Main trading partners

The principal wood products traded by Austria in 1997 and its main trading partners

Commodity

Table 7.10

Country abbreviations: See page 160 Sources: See Table 7.2

3952 6593 3007 3825

EXPORTS Total wood products (1000 US$) Non-coniferous industrial wood (m3) Sawn hardwood (m3) Plywood (m3)

Total (1000 units)

The principal wood products traded by Malaysia in 1997 and its main trading partners

Commodity

Table 7.9

65.6%

62.6% 95.1% 80.0% 55.3% 55.4%

Share of four main partners in total

..

83.4% 92.4% 78.6% 86.7%

Share of four main partners in total

THE MAJOR PLAYERS

THE INTERN ATION AL TIMBER TRADE

Wood removals in 1997 amounted to 39 million m3, of which 31 million were industrial wood (in contrast to most developing countries, fuelwood made up only a minor share of the total). Wood-processing has centred on sawn hardwood and plywood, of which Malaysia is among the leading world producers. It is also strongly pursuing a strategy to expand the production and export of added value products, notably furniture and joinery. On the other hand, production of woodpulp, paper and paperboard has been developing more slowly, which explains why in 1997 imports of paper and paperboard accounted for 82% by value of Malaysia’s total imports of wood products. Malaysia’s exports of wood products are still heavily oriented towards wood raw material (22% of the total by value in 1997) and sawn hardwood and wood-based panels (76%). The latter are shipped mainly from peninsular Malaysia, with the main markets for sawn hardwood being Thailand, Japan, China and Singapore, the last also serving as a transit point. Plywood accounts for the major part of wood-based panels exports, with shipments mainly to Japan, China and Singapore, but Malaysia’s exports of MDF and to a lesser extent of particle board have been rising steeply in recent years. Roundwood exports from peninsular Malaysia have been legally restricted for many years, and the large volumes still being exported, though less than in the past, come mainly from Sarawak, with Japan and China the main destinations. Until fairly recently, Malaysia has been largely a threeproduct exporting country – tropical hardwood logs, tropical sawn hardwood and plywood – but diversification has been taking place into value added products and MDF, a trend that is likely to be pursued.

Austria Lying in the heart of Europe and neighbouring large importing countries such as Germany, Italy and Switzerland, Austria with its important forest resource and well-developed wood-processing industries is in a good position as an exporter. In 1997 its exports of wood products amounted to US$3.8 billion, placing it ninth among world exporting countries. It is also a medium-sized importer, with US$2 billion, leaving a net export value of 1.8 billion and an export to import ratio of 1.9, the lowest among the major net exporting countries. The principal wood products exported by Austria in 1997 and its main trading partners are shown in Table 7.10. The area of Austria’s forest is 3.8 million ha, of which 87% is classified as available for wood supply. While this area is by far the smallest among leading exporting countries, it is offset by the fact that the average volume of growing stock, at 310 m3 ob/ha, is one of the highest in the world, giving 178

THE MAJOR PLAYERS

a total growing stock on FAWS of over 1 billion m3 ob. Net annual increment amounts to 27 million m3 ob, of which 80% is coniferous. Annual removals in the late 1990s averaged less than 15 million m3 ub, and even after allowing for the bark volume on removals and unrecovered felling losses, the fellings to NAI ratio was about 0.7, leaving scope for some potential growth in removals without threatening sustainability. Austria has a well-developed and well-balanced wood-processing sector supplying a domestic population with high per capita levels of consumption as well as export markets. Regarding the latter, European countries to its south and west are its main customers, led by Italy, Germany, Switzerland and France. For sawn softwood, 72% of its exports in 1997 went to Italy. Interestingly, Japan had grown to become its next largest market in 1997 with over 11% of total exports. For the other main commodities exported, particle board, printing and writing paper and other paper and paperboard, Germany was the largest market, followed by Italy. Sawnwood and wood-based panels accounted for 41% by value of Austria’s exports in 1997 and paper and paperboard for 53%. On the other hand, exports of wood raw material and of woodpulp were relatively small. With regard to imports, Austria is a sizeable importer of wood raw material to augment its domestic supply of raw material to industry, but not on the scale of Finland and Sweden. It is also importing quite large volumes of other wood products, while for some such as sawn softwood it is providing an export-forwarding service for certain central European neighbours, such as the Czech Republic, Germany and Slovakia.

Russian Federation Immediately before its break-up, the USSR held a larger proportion of world exports of wood products than does the Russian Federation today. In 1988, for example, the USSR exported US$3.8 billion of wood products or nearly 41/2% of the world total. In 1997 the Russian Federation’s exports amounted to US$3 billion, less than half the 1988 share. To make the figures comparable, exports from other countries, formerly part of the USSR, such as the Baltic states, Belarus and the Ukraine, should be added to the Russian Federation’s, but the latter account for the predominant part of the total exports of the group of countries that is termed here the ‘Former USSR’. The Russian Federation’s imports were US$750 million in 1997, giving an export to import ratio of 4. A description of the Russian Federation’s forest resources requires superlatives. Its area of forest of 817 million ha is easily the largest in the world, roughly 22% of the total. It is four-and-a-half times the size of Europe’s forest area and almost twice that of the whole of North America. Forest avail179

THE INTERN ATION AL TIMBER TRADE

able for wood supply comprises 525 million ha, or 64% of the total. However, a large (but difficult to assess) part of that, mainly in central and western Siberia, is probably economically inaccessible to commercial exploitation for the foreseeable future. A large part, 749 million ha of forest, FAWS and other combined, is classified as ‘undisturbed by man’, representing a vast pool of more or less natural or virgin forest comparable in size to the whole of the Amazon Basin in South America. The volume of growing stock on FAWS is estimated at 61 billion m3 ob, of which nearly three-quarters is coniferous. With so much of the forest area, even of FAWS, still in a more or less natural (undisturbed) state, a large part of gross increment is lost to natural causes, such as fires, disease and insect attack, and the remaining increment, the net annual increment, is difficult to assess. The estimate by Russian experts of NAI on FAWS is 742 million m3 ob and, with a volume of fellings on FAWS of 126 million, the fellings to NAI ratio is a low 0.17. The physical potential for raising fellings is therefore considerable, but enormous economic, infrastructural, social and environmental obstacles would have to be overcome to make it realisable: it is a matter of decades rather than years. The principal wood products traded by the Russian Federation and its main trading partners are shown in Table 7.11. At the time of its dissolution, the former USSR had a large but obsolescent wood-processing sector, which experienced severe difficulties in the period of transition. There were steep falls in output of all products with the exception of wood-based panels. The USSR’s production of sawnwood in 1989 was 105 million m3 (by far the largest in the world), in the Russian Federation in 1997 22 million; of woodpulp in 1989 10.4 million tonnes, in 1997 3.8 million; and of paper and paperboard in 1989 10.7 million tonnes, in 1997 3.3 million. Even allowing for production in parts of the former USSR other than the Russian Federation, the declines were marked. In the latter part of the 1990s some stabilisation occurred and even signs of recovery, but the shortage of capital with which to modernise industries, or build new ones, remained a serious problem. There was a corresponding fall in supply of raw materials to industry. Removals of industrial roundwood in the former USSR in 1989 were 305 million m3 ub and in the Russian Federation in 1997 88 million and in the countries of the former USSR 103 million. The impact of the transition process on the Russian Federation’s trade was not as severe as on production and consumption, at least in volume terms. One reason was that the fall in the exchange rate of the rouble helped to maintain competitiveness in foreign markets; another was the need to earn foreign currencies with which to buy essential imports. Russian exports of some products in 1997, such as plywood and newsprint, were actually higher than those of the former USSR in the 1980s. For others, such as 180

181

752

3 008 12 174 5 671 4 780 631 983 822 GER 22.0%; FIN 17.6%; SWE 8.3%; IT 7.8%

JAP 20.8%; CHN 7.1%; FIN (..); UK 3.8% JAP 49.2%; FIN 20.3%; SK 5.7%; SWE 5.6% FIN 63.7%; SWE 15.7%; CHN 8.9%; JAP 6.7% JAP 13.2%; EGT 10.3%; UK 7.9%; IT 6.2% USA 19.1%; UK 13.0%; EGT 10.6%; GER 8.8% CHN 17.2%; SWZ 14.9%; HUN 11.2%; SK 3.9% IN 21.0%; TUR 15.8%; CHN 13.7%; GER 5.1%

Main trading partners

1314

IMPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

2647 885 2526 1329

EXPORTS Total wood products (1000 US$) Sawn hardwood (m3) Woodpulp (mt) Paper & paperboard (mt)

Total (1000 units)

..

USA 21.5%; ARG (..); JAP 7.3%; UK 7.2% FRA 19.9%; PHI 18.1%; USA 11.3%; THAI 7.5% USA 23.1%; JAP 17.9%; BL 14.0%; UK 8.1% ARG 24.2%; USA 7.2%; CHN 5.1%; UK 5.1%

Main trading partners

The principal wood products traded by Brazil in 1997 and its main trading partners

Commodity

Table 7.12

Data for some main trading partners not available Country abbreviations: See page 160 Sources: See Table 7.2

a

IMPORTS Total wood products (1000 US$)

EXPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Sawn softwood (m3) Plywood (m3) Woodpulp (mt) Newsprint (mt)

Total (1000 units)

The principal wood products traded by the Russian Federation in 1997 and its main trading partners

Commodity

Table 7.11

..

.. 56.8% 55.8% 41.6%

Share of four main partners in total

55.7%

55.6%

a

51.5%

a

80.8% 95.0%

a

Share of four main partners in total

THE MAJOR PLAYERS

THE INTERN ATION AL TIMBER TRADE

industrial roundwood and sawn softwood, exports were appreciably lower, but the fall was much less than that of production. The Russian Federation exports wood products to a large number of countries, shipping from eastern Siberia and the Far East to Pacific Rim countries, and from the European part of the country to Europe, North Africa and the Middle East. Two-thirds of total wood products by value consist of wood raw material and sawnwood and wood-based panels, a much higher proportion than in other industrialised countries. Among its largest customers are Japan, China and South Korea, but between them they account for less than a third of the total. Finland is its largest European partner, although the trade consists almost exclusively of industrial roundwood; for nonconiferous roundwood Finland takes 64% of Russia’s exports and Sweden 16%. The United Kingdom, Italy, the Netherlands and Germany are the main European customers for sawn softwood, while Egypt is an important market for Russian sawn softwood and plywood, the USA for plywood, and India and Turkey for newsprint. Brazil In 1997, Brazil’s exports of wood products were valued at US$2.6 billion and its imports at 1.3 billion, leaving a net export value of 1.3 billion and an export to import ratio of 2.0. It was in fourteenth place among the world’s wood products exporters and twentieth among importers. The principal wood products traded by Brazil and its main trading partners are shown in Table 7.12. Brazil possesses the world’s largest area of forest after the Russian Federation and the largest area of tropical rainforest. The area of forest is 551 million ha, or 65% of the land area, and all but 5 million ha of plantations are reported as being natural forest. There are also 106 million ha of other wooded land, savannah-type woodlands. The humid tropical Amazon rainforests in the north-western half of the country account for 95% of the total forest area and comprise a wide variety of broadleaved forest types and species. There are also Atlantic humid evergreen forests scattered along the Atlantic seaboard and coniferous (Araucaria spp.) forests in the south, both of which have been extensively cleared for agriculture in the past. The 5 million ha of plantations are mainly of fast-growing pine and eucalyptus species. The rate of deforestation is reported as being 0.5% a year, or about 2.8 million ha, with forest being burned to make way for smallholdings, cattle ranching and other types of agriculture, some of which is doomed to failure within a few years on the often mineral-poor forest soils. Removals of roundwood in 1997 amounted to almost 200 million m3, of which 85 million consisted of industrial wood, the highest volume among developing countries apart from China and in fact exceeded only by the USA, 182

THE MAJOR PLAYERS

Canada and China. Broadleaved species accounted for 61% of the total. The removals provide the basis for a large and rather well-diversified woodprocessing industry, much of the output of which is destined for consumption within Brazil by a large and expanding population, leaving a smaller share for export. Most of the production of sawn hardwood and plywood is based on roundwood from the natural forest, while that of woodpulp, paper and paperboard is dependent on plantation-grown wood. The USA is Brazil’s largest market for wood products with 22% of total exports by value, followed by Argentina, Japan, the United Kingdom and Belgium–Luxembourg. For sawn hardwood, France, the Philippines, the USA and Thailand are the main customers, while for paper and paperboard China comes after Argentina and the USA as leading destinations. A large proportion of woodpulp exports consists of hardwood (eucalyptus) pulp, which has become increasingly competitive with other hardwood pulps, such as birch from the Nordic countries. Woodpulp accounts for the largest share of exports by value, with 39% in 1997, followed by sawnwood and wood-based panels with 33% and paper and paperboard with 26%. While Brazil imports some quantities of sawnwood, panels and woodpulp to supplement its domestic production, the biggest share of imports is taken by paper and paperboard, with 74% of total value.

Major net importing countries The six countries in this group are Japan, China, the United Kingdom, Italy, the Netherlands and South Korea (Republic of Korea); five of them are not only large importers of wood products, but also figure in the list of ‘Top 20’ exporters in Table 5.3; the exception is South Korea. Between them, they accounted for about 38% of world imports of wood products in 1997 and a more modest 10% of exports. All of them, with the exception of Japan and South Korea, are rather poorly endowed with forest resources, and so must depend to a greater or lesser extent on imports to meet their consumption needs.

Japan The value of Japan’s imports of wood products in 1997 was US$16.7 billion, placing it in second position among importing countries after the USA. Whereas the USA, as seen earlier, obtains a large part of its external supplies from one source, Canada, Japan has a very diversified trading pattern, with suppliers situated not only around the Pacific Rim, but also in other regions, including Africa and Europe. Japan also figures – just – in the list of ‘Top 20’ exporting countries, due mainly to its substantial exports of 183

184 1 640

EXPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

16 684 13 961 6 446 26 905 10 326 1 789 5 422 3 405 1 614

Total (1000 units)

IMPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Chips (m3) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Woodpulp (mt) Paper & paperboard (mt)

Commodity

..

USA 24.1%; CAN 18.8%; MAL 13.0%; IND 10.5% RUF 40.3%; USA 38.9%; NZ 13.9%; CHI 1.1% MAL 45.3%; PNG 22.3%; SOL 5.7%; GAB 3.3% AUSL 28.2%; USA 22.4%; CHI 15.7%; CHN 9.1% CAN 51.8%; USA 13.7%; RUF 6.0%; CHI 5.7% MAL 28.2%; IND 24.7%; CHN 18.55; USA 13.5% IND 60.0%; MAL 29.0%; CAN 5.5%; CHN 1.2% CAN 40.5%; USA 26.4%; BRA 13.7%; NZ 7.0% USA 48.3%; CAN 17.6%; FIN 16.0%; IND 2.8%

Main trading partners

Table 7.13 The principal wood products traded by Japan in 1997 and its main trading partners

..

66.4% 94.2% 76.6% 75.4% 77.2% 85.0% 95.7% 87.6% 84.7%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

paper and paperboard. The principal wood products traded by Japan in 1997 and its main trading partners are shown in Table 7.13. The forestry situation in Japan is something of a paradox. With 24 million ha of forest and a further million of other wooded land, it has one of the highest forest covers in the world, with 69% of the land area. That it has to import roughly half its needs of wood requirements is due to the fact that it also has a very low area of forest per inhabitant, 0.2 ha/capita. In addition, because of the age-class structure of its forests, high production costs and other reasons, it only harvests about 42% of the net annual increment on the forest available for wood supply. Wood removals in the late 1990s were about 23 million m3 ub a year; net annual increment on FAWS is reported at 69 million m3 ob. Japan has a very large wood-processing sector. Its output of paper and paperboard is third in size after the USA and China, and it is among the world’s leaders in production of sawnwood and wood-based panels. Production is heavily dependent on imports of wood raw material, both roundwood and chips, which in 1997 accounted for nearly a third by value of its total wood imports, a higher share than any other country in Table 7.1 except Finland. More than half of Japan’s paper and paperboard production is based on broadleaved species, including the substantial import of eucalyptus chips from Australia. In most other countries coniferous species still account for the major part of the raw material input. Japan is the world’s leading importer of wood raw material. Its main suppliers of coniferous industrial roundwood are the Russian Federation, the USA and New Zealand, and of non-coniferous (broadleaved) industrial roundwood Malaysia, Papua New Guinea and the Solomon Islands, but other countries in Asia and Africa are also suppliers. For chips, Australia is the largest supplier, followed by the USA and Chile (coniferous). A decade or more ago, Japan was a relatively small importer of sawnwood and plywood, depending largely on imported logs for conversion by its domestic industry. However, it has been following the trend seen earlier in other importing countries to replace part of its own production by imports, and today it is a major importer of sawn softwood and hardwood and of plywood. It is also a major importer of woodpulp, with Canada as the largest supplier, and a quite large importer of paper and paperboard, with the USA as the leading supplier. Its imports of paper and paperboard are relatively modest compared with domestic production and not much larger than its exports. China In international statistics ‘China’ includes Taiwan (Taiwan Province of China) and Hong Kong (Hong Kong Special Administrative Region), both of which 185

186 3 743

EXPORTS Total wood products (1000 US$)

Data for some major trading partners not available Country abbreviations: See page 160 Sources: See Table 7.2

a

12 641 1 079 5 859 1 864 734 2 830 3 475 1 528 2 458 1 310 2 218 6 936

IMPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Chips (m3) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Fibreboard (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

..

IND 12.6%; USA 12.5%; SK (..); MAL 8.3% RUF 52.9%; USA 13.2%; NZ 2.6% MAL 43.2%; GAB 19.7%; RUF 11.7%; CAM 6.3% IND 21.4%; AUSL 15.4%; CHI 11.4% CAN 30.8%; CHI 9.0%; USA 5.3%; SWE 1.5% MAL 32.6%; USA 20.1%; IND 18.4%; CAN 4.5% IND 44.6%; MAL 32.2%; SIN 1.5%; SK 1.5% .. CAN 28.9%; USA 17.9%; IND 20.5%; CHI 13.9% CAN 35.5%; USA 11.8%; RUF 10.7%; SWE 5.0% SK 30.3%; IND 15.5%; USA 9.2%; FIN 4.6% USA 35.3%; IND 7.7%; JAP 7.3%; GER 3.5%

Main trading partners

The principal wood products traded by China in 1997 and its main trading partners

Commodity

Table 7.14

..

46.6% 75.6% 79.8% .. 81.2% 63.0% 59.6% 53.8%

a

80.9%

a

..

Share of four main partners in total THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

are in-transit processors of wood products. That helps to explain why China is not only the third largest importer of wood products, with US$12.6 billion in 1997, but also the tenth largest exporter, with 3.7 billion. Its population of one and a quarter billion is one-fifth of the world total, and its economy has enjoyed strong growth in recent decades, even if GNP per capita is still low, especially among the rural population which make up two-thirds of the total. Standards of living are appreciably higher in Taiwan and Hong Kong and are rising fast in the eastern provinces of mainland China. The principal wood products traded by China in 1997 and its main trading partners are shown in Table 7.14. China has 133 million ha of forest, which amounts to only 0.1 ha/capita. Its removals of roundwood in 1997 were 313 million m3, of which about one-third was industrial wood. This put it in third position as producer of industrial wood after the USA and Canada, but the volume per capita of less than 0.1 m3 falls far short of the latent demand. Even so, it has placed a heavy strain on the forest resource, and the authorities have had to take steps to limit production. There has been a very large afforestation programme, with a reported 20 million ha of plantations, but these have been established for purposes other than wood production, including soil protection and the provision of nuts and fruits. It seems inevitable that any increase in consumption of wood products will have to be met largely from imports. China is a major producer of wood products, the second largest in the world after the USA of paper and paperboard and wood-based panels and third largest after the USA and Canada of sawnwood. Although fairly small compared with supplies to the domestic market, exports of these products accounted for 89% by value of China’s exports of wood products in 1997, the main markets being in Asia and the USA. China is a major importer of most categories of wood products, the most important of which are shown in Table 7.14, and it draws its supplies from a wide range of countries. For coniferous industrial roundwood, the Russian Federation is the biggest supplier; for non-coniferous roundwood, it is Malaysia and Gabon; and for chips, Indonesia and Australia. Canada and Chile are the largest suppliers of sawn softwood for China; Malaysia and the USA of sawn hardwood; and Indonesia and Malaysia of plywood. The most important exporters of woodpulp and newsprint to China are Canada and the USA, the latter also of other paper and paperboard, while South Korea and Indonesia are the leaders for printing and writing paper. United Kingdom In 1997 the value of the United Kingdom’s imports of wood products was just under US$10.0 billion, which placed it fifth amongst the world’s leading importing countries. With exports of US$2.1 billion, it was sixteenth among 187

188 2124

EXPORTS Total wood products (1000 US$)

Country abbreviations: See page 160 Sources: See Table 7.2

9993 6491 611 947 1119 1870 1628 3059 2411

IMPORTS Total wood products (1000 US$) Sawn softwood (m3) Sawn hardwood (m3) Plywood (m3) Particle board (m3) Woodpulp (mt) Newsprint (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

GER 13.9%; FRA 9.2%; NL 7.4%; USA 5.9%

FIN 19.4%; SWE 17.9%; GER 9.1%; USA 7.8% SWE 32.6%; LAT 18.6%; FIN 15.9%; RUF 6.9% IT 17.3%; USA 13.7%; MAL 8.4% IND 22.7%; USA 22.3%; RUF 7.6%; MAL 7.0% BL 27.4%; GER 15.9%; FIN 11.7%; POR 11.3% USA 20.6%; CAN 17.0%; BRA 14.8%; FIN 12.6% SWE 27.7%; CAN 25.1%; FRA 10.0%; FIN 7.1% FIN 36.8%; GER 16.5%; SWE 11.8%; FRA 9.1% SWE 23.0%; USA 13.7%; FIN 12.9%; GER 12.4%

Main trading partners

The principal wood products traded by the United Kingdom in 1997 and its main trading partners

Commodity

Table 7.15

36.4%

54.2% 74.0% 39.4% 59.6% 66.3% 65.0% 69.9% 74.2% 62.0%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

exporters. Its export to import ratio of 0.2 was the lowest among the leading trading countries apart from Japan. The country is poorly endowed with forest resources and, despite an active plantation programme over the past 80 years, its area of forest and other wooded land in the late 1990s amounted to only 2.5 million ha or 10% of the land area (European average 38%). Being densely populated, the area of forest and other wooded land per inhabitant is, at 0.04, amongst the lowest in the world. The area of forest available for wood supply of 2.1 million ha with a growing stock of 317 million m3 ob supplies a minor though increasing part of the United Kingdom’s requirements of wood products. Apart from imports of wood raw material, which are small, the commodity pattern of the UK’s imports is diversified, as is the pattern of its trading partners. In value terms the most important import commodity group in 1997 was paper and paperboard with 55% of the total, followed by sawnwood (20%), wood-based panels (11%) and woodpulp (10%). There is a large domestic paper and paperboard industry, based to a considerable extent on waste paper and imported pulp and producing about 6.5 million tonnes a year or over half domestic needs; and also sizeable particle board and fibreboard industries. Sawmilling, though by no means negligible, meets only about a quarter of domestic consumption. The principal wood products imported by the United Kingdom in 1997 and its main trading partners are shown in Table 7.15. Sweden and Finland supplied nearly half the UK’s imports of sawn softwood in 1997, but it was noteworthy that Latvia had risen within a few years to become the second largest supplier after Sweden with nearly 19% of the total volume, while the Russian Federation’s share was only 7% and Canada, which sometimes in the past had been the UK’s largest supplier, accounted for only 1% in that year. For sawn hardwood, the United Kingdom draws on a large number of suppliers, but in 1997 Italy was the leader with 17%, followed by the USA and Malaysia. Indonesia and the USA were the leading exporters of plywood to the UK; and Belgium–Luxembourg of particle board (flaxboard), followed by Germany. There is a contrast between the United Kingdom’s sources of woodpulp and of paper and paperboard. For the latter, North America accounted for 38% in 1997, followed by Brazil with 15%. For paper and paperboard, the Nordic countries are overall the largest suppliers, with France, Germany and the USA also important, depending on the particular commodity. Italy Italy is the sixth largest importing country of wood products with US$6.8 billion in 1997, and thirteenth largest exporter with 2.6 billion, leaving a net import value of 4.2 billion and an export to import ratio of 0.4. It has an 189

190 2651

EXPORTS Total wood products (1000 US$)

Data for some major trading partners not available Country abbreviations: See page 160 Sources: See Table 7.2

a

6823 1680 2824 5145 1760 3119 1247 1879

IMPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Sawn softwood (m3) Sawn hardwood (m3) Woodpulp (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

GER 20.8%; FRA 14.8%; UK 8.2%; SP 7.2%

AUS 14.3%; GER 12.4%; USA 10.7%; FRA 9.5% GER 28.0%; SWZ 25.4%; AUS 25.4%; BL 1.5% HUN 23.3%; FRA 20.7%; CAM 7.0%; GER 5.1% AUS 59.6%; GER 11.9%; SWE 5.4%; RUF 5.0% CRO 14.0%; USA 10.2%; CIV 7.0%; HUN (..) CAN 23.2%; USA 21.5%; SWE 7.2%; CHI 5.7% GER 27.8%; FIN 15.0%; AUS 14.6%; FRA 13.3% SWE 19.2%; USA 16.5%; FRA 12.0%; GER 11.7%

Main trading partners

The principal wood products traded by Italy in 1997 and its main trading partners

Commodity

Table 7.16

51.0%

57.6% 70.7% 59.4%

a

81.9%

a

46.9% 80.3%

Share of four main partners in total

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

area of forest of 9.9 million ha and nearly a million ha of other wooded land giving a forest cover of 37% of the land area and 0.2 ha per capita. The area of forest available for wood supply is 6 million ha, with a growing stock volume of 877 million m3 ob, of which two-thirds is broadleaved. Net annual increment on FAWS is 19 million m3 ob and fellings a bit less than half of that to give a fellings to NAI ratio of 0.47. There has in consequence been an appreciable rise in growing stock in recent decades. Removals of industrial wood in the late 1990s amounted to around 4 million m3 ub a year or 43% of total removals. Italy is an important producer of paper and paperboard and of woodbased panels. These are mainly destined for the domestic market, but a part is exported. Three-quarters by value of its exports of wood products consist of paper and paperboard. It should also be mentioned that Italy is a major producer and exporter of added value wood products, notably furniture, of which it is a net exporter. The principal wood products traded by Italy in 1997 and its main trading partners are shown in Table 7.16. Italy’s imports of wood products are well diversified. Those of coniferous industrial roundwood come mainly from its neighbours, Germany, Switzerland and Austria, and of non-coniferous industrial roundwood from Hungary and France, as well as from Cameroon and other tropical, mainly African, countries. With France and Spain, Italy has traditionally been the main importer of tropical hardwood sawlogs and veneer logs, although the volume of imports has been declining over the past decade or more and partly replaced by imports of sawn hardwood and plywood. Austria supplies Italy with as much as 60% of its sawn softwood imports, and Germany with a further 12%. Sweden and the Russian Federation are other large suppliers. Before the break-up of Yugoslavia, it was the major supplier of sawn hardwood to Italy, along with Romania and France. In 1997, Croatia was the largest exporter to Italy with 14% of the total, followed by the USA, Côte d’Ivoire and Hungary. Canada and the USA are the biggest exporters of woodpulp to Italy. For paper and paperboard, Italy obtains most of its supplies from within Europe, notably from Germany, Austria, France and the Nordic countries, but the USA is also a large supplier of other paper and paperboard. The Netherlands In 1997, the Netherlands imported wood products to the value of US$4.7 billion, its exports were 2.7 billion, net imports were 2 billion, and the ratio of exports to imports was 0.57. It was eighth among the world’s importing countries and twelfth among exporters, a surprisingly high figure given its very small forest resource base. The principal wood products traded by the Netherlands in 1997 and its main trading partners are shown in Table 7.17. 191

2667

EXPORTS Total wood products (1000 US$)

192 3740 6955 1311 1202 970 1981 1214

EXPORTS Total wood products (1000 US$)

Total (1000 units)

IMPORTS Total wood products (1000 US$) Coniferous industrial wood (m3) Non-coniferous industrial wood (m3) Chips (m3) Plywood (m3) Woodpulp (mt)

Data for some major trading partners not available Country abbreviations: See page 160 Sources: See Table 7.2

a

GER 27.0%; FRA 14.8%; BL 13.4%; UK 13.1%

SWE 18.7%; GER 16.7%; FIN 10.7%; BL 9.7% SWE 30.0%; FIN 21.1%; RUF 11.9%; GER 10.3% SWE 21.7%; POR 21.3%; USA 18.0%; CAN 6.8% GER 25.4%; SWE 15.9%; FIN 15.2%; BL 11.4% SWE 28.8%; GER 25.5%; FIN 9.7%; USA 8.5%

Main trading partners

..

USA 21.9%; IND 8.4%; CAN 8.2% NZ 46.4%; CHI 20.2%; RUF 13.2%; USA 13.0% PNG 37.1%; MAL 31.8%; SOL 15.4%; GAB 3.2% CHN 53.6%; CHI 7.8%; AUSL 7.0%; USA 6.4% IND 58.1%; MAL 17.0%; BRA 9.1%; USA 2.8% USA 35.9%; CAN 31.5%; IND 13.9%; BRA 7.9%

Main trading partners

..

92.8% 87.5% 74.8% 87.0% 89.2%

a

Share of four main partners in total

68.3%

55.8% 73.3% 67.8% 67.9% 72.5%

Share of four main partners in total

The principal wood products traded by South Korea (the Republic of Korea) in 1997 and its main trading partners

Commodity

Table 7.18

Country abbreviations: See page 160 Sources: See Table 7.2

4658 2889 1174 1023 1443

IMPORTS Total wood products (1000 US$) Sawn softwood (m3) Woodpulp (mt) Printing & writing (mt) Other paper & paperboard (mt)

Total (1000 units)

The principal wood products traded by the Netherlands in 1997 and its main trading partners

Commodity

Table 7.17

THE INTERN ATION AL TIMBER TRADE

THE MAJOR PLAYERS

The Netherlands has only a small area of forest and other wooded land, 339 000 ha, which covers only 10% of the land area and amounts to a mere 0.02 ha per capita. Wood production is of secondary importance to other uses of the forest, such as nature conservation and recreation. Consequently, for most wood products the country is largely dependent on imports to meet its needs, although its paper and paperboard industry is fairly important and is based mainly on imported woodpulp and recycled waste paper – it has one of the highest waste paper recovery rates in the world. Its exports of paper and paperboard are almost as much as its imports, and with rather small volumes of exports of other categories, they account for 78% of the value of the country’s total wood products exports. Sweden, Finland and Germany figure prominently among the leading suppliers of sawn softwood, woodpulp, paper and paperboard to the Dutch market, but the Russian Federation is also important as a source of sawn softwood, Portugal and Canada of woodpulp, and Belgium–Luxembourg and the USA for paper and paperboard. Although not shown in Table 7.17, the Netherlands is a medium-sized importer of sawn hardwood from South-East Asia (it is Malaysia’s largest European customer), Africa, the USA and Brazil, of plywood, notably from the USA, Finland and France, and of particle board (it is Belgium–Luxembourg’s leading customer). South Korea (the Republic of Korea) South Korea’s imports of wood products amounted to US$3.7 billion in 1997, and its exports to 1.2 billion, leaving net imports of 2.5 billion and an export to import ratio of 0.33. It was the tenth largest importer of wood products, but did not figure in the ‘Top 20’ exporters. The principal wood products traded by South Korea (the Republic of Korea) in 1997 and its main trading partners are shown in Table 7.18. The area of forest in South Korea is 7.6 million ha or 77% of the total land area, even higher than Japan’s. Many of its forests are the result of large-scale reforestation after widespread degradation in the first half of the twentieth century culminating in the Korean War. Unusually for a developing country, a large part of the forests, about 70%, are privately owned. Because of their age-class structure the forests are not large producers of industrial wood, the volume of removals in the late 1990s amounting to around 1 million m3 ub a year, which covered a minor part of the country’s needs. The commodity pattern of South Korea’s imports bears some resemblance to that of Japan, with a large share of wood raw material imports (26%) in the total value of imports, as well as of sawnwood, wood-based panels and woodpulp, and a relatively small share of paper and paperboard (13%). The imports of wood raw materials, as well as of woodpulp, provide 193

THE INTERN ATION AL TIMBER TRADE

the basis for the quite large output of all types of wood products. The sources are mainly from around the Pacific Basin: New Zealand, Chile, the Russian Federation and the USA for coniferous industrial roundwood; Papua New Guinea, Malaysia and the Solomon Islands for non-coniferous industrial roundwood; and China, Chile, Australia and the USA for chips. West Africa also supplies some quantities of non-coniferous roundwood. Unlike Japan, South Korea has not yet become a major importer of sawnwood. Its imports of plywood, however, are substantial, mainly from Indonesia, Malaysia and Brazil, and this represents an interesting development from the situation in the 1970s when for a while it was a large in-transit processor of imported tropical hardwood logs and the world’s leading exporter of plywood. This was part of the strategy for rapid industrialisation, somewhat similar to that followed by the Taiwan Province of China.

Other important trading countries Seven other countries are shown in Table 7.1, which between them made up about 5% of world exports and imports in 1997. Thus, while not qualifying for inclusion among the ‘Top 20’ trading nations, they are nonetheless of importance and interest as exporters or importers or both. Four of them are net exporters: Chile, New Zealand, Portugal and South Africa; three are net importers: Australia, Mexico and Thailand. It may be noticed that a number of European countries figuring in the lists of ‘Top 20’ exporters and importers (Table 5.3) are not listed here: they include Belgium–Luxembourg, Denmark, Norway, Spain and Switzerland. The reason is that their trading patterns are not very different from their neighbours’ that have been described in this chapter, a common feature being the rather high share of total trade that took place with neighbouring or near-neighbouring countries as well as the incidence of two-way trading in the same commodity but of different specifications. An obvious example of this is Belgium– Luxembourg with its exports of non-wood particle board (flaxboard) and imports of different types of wood particle board, mostly to and from its neighbours.

Australia Australia has an area of forest of 189 million ha and of other wooded land of as much as 424 million ha, together giving a coverage of 76% of the land area. Of the area of forest, 41 million ha are classed as available for wood supply, on which 80% of the growing stock is broadleaved and predominantly eucalyptus. While there is an active afforestation programme of both coniferous and broadleaved species, these plantations cannot yet provide the balance 194

THE MAJOR PLAYERS

of wood raw material needed to meet domestic consumption needs, and Australia is importing quite substantial quantities of certain products, including sawn softwood and paper and paperboard. In due course, Australia may become a net exporter of wood products when its plantation programme has developed further. In the meantime, it is a major exporter to East Asia of wood chips from its natural eucalyptus forests. The felling for export of these forests has aroused considerable opposition on environmental grounds.

Chile, New Zealand and South Africa What these countries have in common is that their exports of wood products are largely based on fast-growing plantations. Chile has more than 2 million ha of plantations, of which three-quarters are of Radiata pine and much of the rest eucalyptus, both exotic species. New Zealand has more than one and a half million ha, mostly Radiata pine, and South Africa over one million ha, also with Radiata pine and eucalyptus predominating. Besides these plantations there are quite extensive areas of natural forests in all three countries which, however, play a minor role as providers of industrial roundwood. All three countries export considerable quantities of wood raw material, mainly as coniferous industrial roundwood but also as chips, with the countries of East Asia being the main markets. Nearly half by value of Chile’s and South Africa’s exports of wood products in 1997 consisted of woodpulp, with markets in the USA, Asia and Europe, and Chile also to some Latin American countries. Chile also exports sawn softwood and wood-based panels, but these do not make up as large a part of total exports as from New Zealand (23% by value in 1997 compared with 36%). The USA and Japan are Chile’s largest markets for sawn softwood, with some quantities also going to China, Europe and other markets. Australia is New Zealand’s largest market for sawn softwood, followed by the USA and Japan. Fibreboard, mainly MDF, is the wood-based panel exported in the largest volume by Chile and New Zealand. Compared with most other exporting countries, the three countries’ share of paper and paperboard in total wood products is low.

Mexico Mexico has 136 million ha of forest and other wooded land, of which 55 million or 41% is forest. The forest cover is about 30%. A broad range of climatic zones gives rise to an equally broad range of vegetation and forest types. More than 70% of the country is classified as semi-arid or drier, but there are also wet humid zones, as well as montane and alpine vegetation. 195

THE INTERN ATION AL TIMBER TRADE

Lowland forest is mostly broadleaved. Montane regions have mixed coniferous (pine and fir) forests, also with significant proportions of oak. There are some areas of plantations, mainly pine. Mexico’s imports of wood products, amounting to US$1.47 billion in 1997, were three times its exports. Paper and paperboard accounted for 58% of the import total, with woodpulp and waste paper taking a further 22%. Its main trading partners are the fellow-members of NAFTA, the USA and Canada. Sawnwood and wood-based panels make up nearly half its exports, which go mainly to the USA.

Portugal Portugal is also a moderately forested country; its 3.2 million ha of forest and other wooded land (all but 11% being forest) cover 31% of the land. Its forests consist mostly of maritime pine (P. pinaster) in the north and central part of the country, while cork and evergreen oaks (Q. suber and ilex) are found in the south. Eucalyptus plantations, mostly E. globulus, are spread along the central and southern coastal regions. Portugal has one-third of the world’s area of cork oak forests and produces half of the world’s output of cork. It is the leading exporter of cork and cork manufactures, which are not included in the trade figures in Table 7.1. Their inclusion would lift the total value of forest products considerably and bring Portugal in the ‘Top 20’ exporters’ club. Its main exports of wood products in 1997 were paper and paperboard with 43% of the total and woodpulp with 35%. It also ships moderate quantities of sawnwood, particle board and fibreboard.

Thailand Some decades ago, Thailand was still quite an important exporter of wood products, notably of teak (Tectona grandis). However, since 1960 it has lost half its forest cover, most of the remaining forests are in relatively inaccessible mountainous areas, and since 1989 there has been a ban on logging in natural forests. It is now a large importer of wood products with US$1.5 billion in 1997, putting it in sixteenth place in the ‘Top 20’ importers list, and its exports to imports ratio is 0.4. Thailand is an example of the longterm impact on the trade balance in wood products of the over-exploitation of a once rich forest resource. Other countries that have trod the same path include the Philippines and Nigeria. To feed a still quite large wood-processing sector, Thailand imports roundwood and sawnwood, mainly from tropical sources, as well as woodpulp and waste paper. Its production of added value products, notably fur196

THE MAJOR PLAYERS

niture, has been expanding, and exports of these have helped to offset the trade deficit in other wood products.

Emerging and declining suppliers and markets The preceding section gave a snapshot view of the trade situation in wood products in the leading exporting and importing countries in the late 1990s without going into detail about the long-term trends. Nevertheless, there were some indications of where important changes had occurred. This section looks at some of the changes and the reasons behind them.

Declining suppliers There are examples of countries that were in past years important exporters of wood products but have seen their exports shrink in recent times. Reasons for this include: • • • •

Over-exploitation of the forest resource. Introduction of legislation affecting exports. Competition from other sources. Political disturbances affecting production and trade.

Over-exploitation of the forest resource In several countries ‘timber-mining’ has taken place with no consideration to the long-term sustainability of the resource. It has involved the cutting of tree species most in demand on the market and in the most accessible areas. The Philippines was the world’s largest exporter of tropical hardwood sawlogs and veneer logs in 1970 with 9.6 million m3; its exports were negligible by the late 1990s. In Africa, Ghana and Nigeria exported 775 000 m3 and 733 000 m3 respectively of these logs in 1961, but only minor volumes in the 1990s. Exports from the Côte d’Ivoire reached a peak of over 3 million m3 in the early 1970s but had declined steeply by the late 1990s.

Introduction of legislation affecting exports Sometimes as a measure to bring over-exploitation under control, countries have introduced legislation banning or restricting the export of wood raw material, an additional aim being to divert supplies to domestic industries 197

THE INTERN ATION AL TIMBER TRADE

and thereby encourage the growth of exports of added value products. Some countries like Canada have had controls for many years; others, for example Indonesia, have introduced them more recently. Indonesia’s exports of tropical hardwood logs reached nearly 15 million m3 in 1980 but fell to virtually nothing in the following decade. Over the same period its exports of sawn hardwood and plywood rose steeply until further legislation was brought in to curtail exports of sawn hardwood, which dipped after 1989.

Competition from other sources During the first two decades after the Second World War, Sweden and Finland were Europe’s leading exporters of fibreboard. Thereafter, however, their exports declined, partly as a result of competition from cheaper supplies from eastern Europe and other sources. A somewhat similar development occurred with particle board: Finland’s exports peaked in 1973, Sweden’s in 1978, and since then their exports have remained well below those levels.

Political disturbances affecting production and trade These may be temporary in nature, although the impact can last for a decade or a generation. An example is the sudden breakdown of totalitarian rule in the countries of the east European bloc at the end of the 1980s, and the process of transition of their economies from State planning systems to forms of market economy. There was also the break-up of the former USSR into 15 separate countries, 12 of them continuing to be linked as members of the Commonwealth of Independent States (CIS), while the 3 Baltic states, Estonia, Latvia and Lithuania, decided to remain outside the CIS. The introduction of market economy practices had severe impacts, especially in the CIS countries, whose economies shrank and standards of living fell sharply in the early 1990s. In the Russian Federation, for example, production of wood derivatives declined, particularly of sawnwood, which had a noticeable effect on the trend of world production of this product. Sawn softwood exports from the Russian Federation decreased in the first half of the 1990s before stabilising in 1996, but the fall was less than that of production. Exports from the Baltic states increased considerably and by the late 1990s total exports from the countries of the former USSR were comparable in volume to those of the USSR in the 1980s. Romania and the former Yugoslavia were two leading exporters of sawn hardwood in Europe. Exports from Romania and the countries of the former Yugoslavia in the late 1990s were about half the peak levels achieved in the past under the effect of the political and economic changes there. In Africa, Mozambique’s exports of sawn hardwood were curtailed after the 1970s, as 198

THE MAJOR PLAYERS

were Liberia’s of hardwood sawlogs and veneer logs after the mid-1990s, no doubt largely as a result of the political difficulties in those countries.

Emerging suppliers It is sometimes difficult to separate countries that took part in the general expansion of trade in wood products from those whose appearance on the market as suppliers was prompted by some special circumstances. Among the reasons for the latter have been: • •

Opening up of existing forest areas or creation of plantations. Appearance of new products.

In several instances, export development has been based on a combination of the two.

Opening up existing forest areas or creation of plantations Papua New Guinea is an example of a country that has grown to become a leading exporter of tropical hardwood sawlogs and veneer logs. As availability of the commercially preferred species from South-East Asia became increasingly problematical, the possibilities of harvesting and exporting the different species growing in Papua New Guinea were explored, with the result that it is now the second largest exporter of this commodity in the world after Malaysia. The development of Australia’s large export business in chips during the 1980s was also based on its natural hardwood (eucalyptus) resource. Plantations have provided the basis for important manufacturing industries and exports, as seen in the previous section for Brazil, Chile, Indonesia, New Zealand and South Africa. Woodpulp accounted for a large part of the growth of plantation-based exports of wood products from Brazil, Indonesia and South Africa, while those from Chile and New Zealand were more diversified, with wood raw material and sawn softwood also important.

Appearance of new products The most obvious examples that come to mind are medium density fibreboard (MDF) and oriented strand board (OSB). The explosive growth in the demand for MDF in the 1990s provided the opportunity for new capacity to be built in many countries, and in some to develop new export markets. 199

THE INTERN ATION AL TIMBER TRADE

A large MDF plant was established in Ireland, using plantation conifers, mainly Sitka spruce, as raw material, and a large part of its production is directed to export markets with the UK as the biggest. This has been a case of plantation wood becoming available at about the same time as a market emerged for a new product for which the raw material was well suited. The quadrupling of Canadian exports of particle board during the 1990s was largely due to the emergence of OSB as an alternative to plywood in a number of major construction and packaging uses, combined with increasing difficulties in providing raw material supplies (veneer logs) for plywood production in both Canada and the USA, its principal market. OSB is produced from lower-quality wood, largely non-coniferous, of which there are abundant supplies.

Declining markets Trade in a given product may decline for reasons connected with demand, as well as of supply. Demand may be affected by substitution by other products and/or by changes in the utilising industry. Take the case of pitprops: after the Second World War, the restoration of the underground coal-mining industry was crucial for the economic recovery in Europe, and pitprops were essential for the industry. Volumes of trade in the post-war years were substantial. By the 1970s oil and natural gas had become the main sources of energy, underground mining was falling in many countries, partly replaced by surface mining, but wooden pitprops were also being replaced by steel. Consequently, trade in wooden pitprops declined, notably between the former USSR and Hungary, the UK and Germany. The case of wooden sleepers (railroad ties) was somewhat similar. Postwar reconstruction required large quantities of sleepers, but subsequently the replacement market slowed down and new techniques, such as continuous rails, demanded the use of concrete sleepers rather than wood. Trade in the latter declined appreciably from the 1980s onwards in line with the overall market. Another example of the same trend is dissolving pulp. Used as the basic material for rayon for the textile industry and other products, it has faced increasing competition from fossil fuel-based substitutes, and its use and imports in some countries, such as the USA and the UK, decreased during the 1990s.

Emerging markets There are many countries whose imports of wood products have expanded over the past decades from small beginnings as a natural part of their overall 200

THE MAJOR PLAYERS

economic development. It is not these that are of interest here, but rather those that are having or may have a significant impact on world trade over a relatively short period of time by reason of changes in trade policy. Such changes may include a loosening of import controls, including the lowering of tariff barriers and the easing of import restrictions. Coupled with this would be a situation where domestic supply of wood raw material as well as of waste paper would be incapable of meeting the growth in demand released by economic expansion. Two examples come to mind, one where the process of import expansion has been going on for some time but still appears to have a long way to go, namely China; the other where the process seems to be in its early stages, namely India. There may be others, but these are the demographic giants, and may become economic giants as well during the twenty-first century. In 1997, however, China was still only importing US$10 of wood products per inhabitant, and India less than one US$ per inhabitant. This compared with US$297 per person in the Netherlands, US$171 in the UK, US$133 in Japan and Germany and US$89 in the USA. No one would suggest that China and India, or most other developing countries for that matter, are likely to catch up with the economically advanced countries in the foreseeable future, if ever. There could be reasons for demand for wood products to become detached from overall economic expansion, resulting in ‘wood-free economic growth’, a kind of extension of the concept of the future ‘paperless office’ when electronics would eliminate the need for any kind of printing and writing paper. Neither wood-free growth nor the paperless office look realistic for the foreseeable future, but at the same time countries like China and India could not afford to open the floodgates to unlimited imports of wood products, even if greater trade liberalisation would benefit the quality of life of their citizens. Yet China’s imports of wood products rose from US$2.75 billion to 12.6 billion between 1990 and 1997, and this may only be the beginning. India’s rose from US$260 million to 760 million between 1993 and 1997 and it still has quite a way to go before joining the ‘Top 20’ importers, but the signs are there of important developments to come.

201

CHAPTER

8 Influences on wood products markets and trade

H

aving dealt in some detail in the previous chapters with trade patterns and trends, it is time to address some of the factors which influence them. The cost of production has a strong bearing on the price at which products can be offered on the international market, while the competitiveness of exporters in a given country is affected by the exchange rate between its currency and those of other exporting countries and of customer countries. Similarly, tariffs and non-tariff barriers to trade have an impact on decisions by importers as to their choice of supply sources. Measures, such as export bans and import controls, are another cause of distortion to trade. Less direct but important as an influence on trade patterns and volumes are the globalisation of markets and regional integration. Also included in this chapter are short sections on futures markets for wood products and on the international institutions most directly concerned with the international trade in wood products.

Costs, prices and exchange rates There is a natural link between the cost of producing wood products and the price at which they are sold on the market, the most obvious being that 202

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

prices cannot over the long term be less than costs, otherwise the producing enterprise would go bankrupt. Depending on the degree of processing, the cost of raw material plays a progressively declining part in the total cost of a product. Typically, the price of sawlogs may account for 60 to 70% of the production cost of sawnwood, but by the time that sawnwood has been converted into joinery products or furniture the log price component may have fallen to a relatively minor share of the total. The other main components of the production cost of sawnwood are energy, labour, capital costs and overheads. For plywood and particle board, other (non-wood) materials, notably glue, are an important item of cost, as are chemicals in chemical woodpulp production costs, and fillers and coatings for paper and paperboard. Production costs vary from mill to mill, or in the case of roundwood from forest to forest, and according to the specification of the product. Mainly for this reason, they have not been collected and published in a systematic way at the international level.

Prices The availability of price data at the international level is considerably better than that of costs, although efforts to collect prices that are comparable between countries have met with mixed results. The usefulness of price data depends to a large extent on how precise they are as regards product specification, and each country tends to produce to its own grading system. Furthermore, prices quoted in national currencies have to be converted to a common currency, usually the US dollar. Export or import unit values, obtained by dividing the total export (or import) value of a product by total volume, are sometimes used in analysis as an alternative to prices, but they suffer from the disadvantage that the traded product may consist of a wide range of qualities and specifications, which will change over time. The unit value is therefore an average, which is comparable neither between countries nor between periods. Changes in exchange rates may further complicate attempts to analyse trends. Bearing these problems in mind, and the need to adjust current prices to take account of inflation, it is not surprising that there are different opinions regarding the long-term development of prices for wood products. One opinion, based on observed trends within the USA, is that prices for sawnwood (lumber) measured in constant dollars have risen since 1900 at an average annual rate of 1.4% (Haynes et al. 1995) although the rise has tended to be in steps, for example in the 1940s and 1970s, followed by periods of relative stability. Furthermore, as Table 8.1 shows, the price trend has varied from product to product, at least during the period 1952–1991. For 203

THE INTERN ATION AL TIMBER TRADE Table 8.1 1991

Deflated price indexes for selected wood products in the USA, 1952–

1952

1962

1970

1976

1986

1991

(Index – 1982 = 100) Sawnwood • Sawn softwood • Sawn hardwood

99.8 104.7

88.3 103.7

95.3 118.6

126.0 109.9

114.3 126.2

113.0 127.2

Structural panels • Plywood • OSB – waferboard

172.0 156.3

119.0 104.0

109.2 99.2

143.6 111.1

121.1 100.3

94.2 118.7

Non-structural panels • Plywood • Other panelsa

184.5 151.4

174.5 115.0

53.4 92.1

110.6 107.1

90.7 ..

.. 107.1

Paper and paperboard Paper Paperboard

93.2 130.4

102.8 121.1

105.1 107.6

104.2 112.9

106.8 106.3

98.9 118.7

a

Hardboard, particle board and fibreboard products Source: Haynes et al., 1995

example, there appears to be no clear upward or downward trend over the 40-year period in prices for paper and paperboard, but apparently a downward trend for certain types of wood-based panels. In the past, a large part of the sawnwood produced in the USA came from logs taken from old-growth (natural) stands, and it could be that as these sources were cut over and logs had to be brought from more distant forests, costs tended to increase, which would be reflected in prices. This trend may have been exacerbated by the restrictions on fellings in public forests in the Pacific North-west for environmental reasons during the 1990s. Another opinion about long-term price trends, based on data compiled by FAO, which are aggregated from available country sources of information on specific product assortments, considers there is no evidence for a significant change in prices for most wood products between the early 1960s and early 1990s (UN-ECE/FAO 1993, FAO 1995(b), OECD 1995). Unfortunately, the FAO series has not been up-dated recently, but it does not appear that the trends in the previous decades have changed during the 1990s. Figure 8.1 shows the trends in current and deflated prices up to 1992 for selected wood products. Those in current prices all show a rising trend because of the upward trend in prices in general (inflation). Those for deflated prices appear to have been reasonably stable over a period of several decades or have even moved slightly downwards. This was the case for both 204

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

raw materials (sawlogs, pulpwood) and processed products (sawnwood, panels, woodpulp). One apparent exception is for tropical sawn hardwood, for which the price trend has been upward. One reason for this may have been the declining accessibility or availability and hence the increasing cost of sawlogs from natural forests in some tropical countries.

150

125 +

+

+

+

Product price index

+

100

+ +

+

+ +

+

75

+

+

1978

1983

+

+ +

+

50 25

+

+

+

+

+

+

+

0 1963

+

+

+

+

+

1968

+

1973 +

+

Current

+

1988

1993

Deflated

A. CONIFEROUS SAWLOGS AND VENEER LOGS 150 +

125

+

Product price index

+

+

+

+

100

+ + + +

75

+

+

+ +

+ + +

50 +

25

+

0 1963

+

+

+

+

+

1968

+

+

+

+

+

+

1973

1978 +

+

+

Current

1983

1988

Deflated

B.TROPICAL HARDWOOD LOGS

8.1 Price indexes (current and deflated) for selected wood products, aggregated from available country data, 1963–1992: Index - 1980 = 100 (source: FAO 1995). 205

1993

THE INTERN ATION AL TIMBER TRADE 150 +

125

+

Product price index

+

100

+

+

+

+ + + +

+

75

+

+

+

+

+

+ +

+

+

50 +

25

+

+

+

+

+

0 1963

+

+

+

+

1968

1973 +

1978

+

+

1983

Current

1988

1993

Deflated

C. SAWN SOFTWOOD 150

125

+

Product price index

+

+

+

+

100

+ +

+ +

+

+

+

+ +

75 + +

50

+ +

+

+

25 +

+

+

+

+

0 1963

+

1968

+

+

+

+

1973 +

+

1978 +

Current

1983 Deflated

D.TROPICAL SAWN HARDWOOD

8.1 Continued

206

1988

1993

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE 150

+ + +

125

+

+

Product price index

+

100

+

+

+

+

+

+

+ +

+

75

+ + +

+

+

50 +

+ +

+

+

+

+

+

+ +

25 0 1963

1968

1973 +

1978

+

+

1983

Current

1988

1993

Deflated

E. PLYWOOD

150 +

125 Product price index

+

+ +

+

+

100

+ +

75 +

+

50

+ +

+ +

+

+

+

+

+

+ +

+ + +

+

+

+

+

+

+

25 0 1963

1968

1973 +

+

1978 +

Current

1983 Deflated

F. PARTICLE BOARD

8.1 Continued

207

1988

1993

THE INTERN ATION AL TIMBER TRADE +

150

+

+

125

+

Product price index

+

100

+

+

+ +

75

+

+ +

+ +

+

+

+ + +

50 +

25

+

+

+

+ +

+

0 1963

+

+

+

+

1968

1973 +

1978

+

+

1983

Current

1988

1993

Deflated

G. CHEMICAL WOODPULP 150

125

+ +

+

+

+

Product price index

+

100

+ +

+ +

+ +

+

75

+ +

+

+

+

+

+

50 +

+

+

+

+

+

+

+

+

+

25 0 1963

1968

1973 +

+

1978 +

Current

1983

1988

1993

Deflated

H. PRINTING AND WRITING PAPER

8.1 Continued

Changes in relative prices over the long term, i.e. prices of wood products relative to competing materials, are indicative of the supply–demand balance. Rising relative prices should result in a fall in demand, or slower growth, unless there are possibilities for supply being stimulated by the higher prices. Assumptions about future price trends are key elements in 208

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

forest sector modelling, and the different price assumptions used partly explain the differences in outlook for consumption and supply of wood products presented in Chapter 10. In the short term, prices are a major factor, although by no means the only one, determining buyers’ decisions in the market. In international trade they can be quite strongly affected by changes in exchange rates, resulting not only in shifts in the sources of supply but also in the quantities traded.

Exchange rates During a period of turbulence in exchange rates some years ago, a trader in the United Kingdom made a comment to the effect that he felt he was no longer a timber importer but a currency speculator. And at a symposium in 1985 in Seattle, a banker concluded his paper on financial issues affecting international trade in wood products by saying: I cannot complete a discussion of financial issues in trade without recognizing the greatest barrier of all: the unprecedented strength of the U.S. dollar against foreign currencies. . . . The prices of our logs, lumber, plywood, and other products have increased abroad by 20 to 35 per cent in the past year. Only where we have resources that cannot be obtained elsewhere in the world do we still have the capacity to compete (Rosenberg in Schreuder 1986).

The last comment about the high US dollar in the mid-1980s is supported by the data in Table 8.2: in 1985 the dollar was appreciably stronger against the currencies of the major European economies, Japan and Canada compared with 1980, but it may also be noted that against most of them it had weakened again by 1990. Over the period 1970–1990 the currencies of several countries, including Germany, Austria, the Netherlands and Japan, tended to strengthen against the US dollar, while others weakened, including those of the United Kingdom, Italy and Canada. The decline of the Canadian dollar from almost parity with the US dollar in 1970 to US$ 0.722 to the Canadian dollar in 1997 certainly contributed to the growth in Canadian exports to the US over the period. Any assessment of the impact of changes in exchange rates on trading patterns needs to be carried out on a country-by-country basis, taking into account the changes between a given country’s currency and that of its main trading partners. A government decision to devalue the national currency has among its objectives the expectation that it will boost exports by making them cheaper to its importing partners and discourage imports. However, in practice these effects tend to be rather short-lived, as a further 209

Currency

210

b

1000 Cruzeiro ECU Source: FAO Yearbooks of Forest Products

a

Major wood products net importers Japan 1000 Yen China Germany D Mark United Kingdom Pound Italy 1000 Lira France 1000 F Franc Netherlands Guilder South Korea 1000 Won

Major wood products net exporters Canada Can. $ Finland Markka Sweden Sw. Krona Indonesia 1000 Rupiah Malaysia Ringgit Austria 1000 Schilling Former USSR Rouble Brazil Cruzeiro

Country

3.370 0.407 2.222 1.530 0.234 0.396 2.070

0.273 2.400 1.600 0.180 0.276 3.220

0.983 0.272 0.241 2.410 0.418 57.540 1.386 0.122

1975

2.778

0.955 0.238 0.193 2.751 0.327 38.462 1.111 0.223

1970

1985

1990

4.428 0.668 0.551 2.326 1.170 0.237 0.504 1.650

0.855 0.268 0.237 1.595 0.460 77.417 1.547 0.019 4.224 0.341 0.343 1.296 0.526 0.112 0.304 1.150

0.732 0.162 0.117 0.901 0.403 48.739 1.193 0.179a 6.940 0.209 0.620 1.785 0.836 0.184 0.551 1.413

0.857 0.262 0.169 0.542 0.370 88.180 1.712 ..

(Equivalent in US dollars)

1980

Table 8.2 Exchange rates of national currencies of selected countries against the US dollar

10.696 0.120 1.308b 1.308b 1.308b 1.308b 1.308b 1.298

0.729 1.308b 1.308b 0.445 0.398 1.308b .. ..

1995

8.277 0.121 1.134b 1.134b 1.134b 1.134b 1.134b 1.074

0.722 1.134b 1.134b 0.361 0.363 1.134b .. ..

1997

THE INTERN ATION AL TIMBER TRADE

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

effect may be to increase the rate of inflation, partly because of the higher cost of imports. Strengthening of a currency may, by making imports cheaper, have impacts on the competitiveness of domestic producers. For example the strong pound sterling at the end of the 1990s was one factor for the weaker prices for roundwood obtained by United Kingdom forest owners. Conversely, the weakness of the Euro, since it was adopted by 11 European countries on 1 January 1999 (falling to well below parity with the US dollar) was certainly an assistance to exports to third countries.

Futures markets For many commodities futures trading is a common feature of the trading scene. This is the case for many agricultural products, base and precious metals, energy and currencies, for example. A futures contract legally binds two parties, the seller and the buyer, to delivery of a standardised commodity in a set futures contract month. Quantity, quality and location of delivery point(s) are the same for each contract traded. Only the price is left unspecified until the moment the contract is executed between a buyer and a seller. Standardisation of the commodity gives futures contracts several advantages. First, a futures contract can be bought or sold instantaneously at any time prior to its last day of trading. Second, standardisation makes all futures contracts interchangeable. Every buyer could be matched with every seller. Therefore a futures contract can be sold now and later bought back. And because of interchangeability, every buyer and every seller are anonymous to one another in the futures market. Lastly, standardisation makes price the only factor of negotiation. Therefore the futures prices available today become pure forecasts of where the lumber market will be at some time in the future, up to 12 months ahead. The necessity to have standardised commodities may be the reason why it has proved difficult to create futures markets for wood products. However, the Chicago Merchantile Exchange (CME) has such markets for two wood products, Random Length Lumber and OSB, while woodpulp is traded on the Pulpex-Pulp Derivatives Market. The rationale behind the creation of the Random Length Lumber futures market is interesting. In its introductory hedge guide (Chicago Mercantile Exchange 1995), the CME states: Cash lumber prices are often unpredictable and volatile. In recent years, domestic lumber supplies have been constrained due to mill closings, the spotted owl controversy and other environmental concerns. In Canada, lumber supplies have been limited as provinces move towards sustainable yields, where only enough trees can be harvested as can be replaced 211

THE INTERN ATION AL TIMBER TRADE in 40 or 50 years. Unfortunately, demand shifts all too rapidly. In the past decade, due in part to economic conditions and interest rate policies, housing starts have ranged from record highs to 36-year lows. Price, the final arbiter for these and a host of other factors, must react to supply and demand imbalances with frequent and often extreme changes. Highly volatile prices can mean opportunity for large profits. But in an industry like lumber, where costs are high and margins tight, volatile prices can also mean risk of loss, sometimes devastating loss. In 1969 the Chicago Mercantile Exchange became the first exchange to offer price protection to the forest products industry with the listing of Random Length Lumber futures contracts. Since 1969, firms engaged in producing, processing, marketing or using lumber and lumber products have been able to hedge – reduce the risk of holding or acquiring inventory through taking an equal and opposite position in the Random Length Lumber futures market. Usually, but not always, hedgers transfer unwanted price risk to speculators. Speculators are investors who hope to achieve profits by buying futures when they think prices will rise, or by selling futures when they think prices will fall. Both hedgers and speculators are necessary for the efficient operation of a futures market.

The specifications for a Random Length Lumber Futures contract as from May 1996 were as follows: Trading unit:

Price quote: Description:

Grade:

Species: Origin:

80 000 board feet (Note: board feet is the unit used in the USA and Canada. One board foot is a piece one foot long by one inch thick and one inch wide. 1000 board feet [Mbf] nominal measure equals 2.36 m3 nominal measure or approximately 1.7 m3 true measure after allowing for shrinkage during drying, so that 80 Mbf equals approximately 136 m3). US$ per Mbf. Nominal 2 ¥ 4s (i.e. 2 inches by 4 inches) of random lengths from 8 to 20 feet; kiln dried (moisture content of each piece shall not exceed 19%) and double end trimmed; surfaced four sides and eased edges and of minimum dressed dimensions. CONSTRUCTION AND STANDARD; STANDARD AND BETTER or #1 and #2. #2 may not exceed 50% of the delivery unit. [These are typical North American grades used principally in timber-frame construction.] Alpine Fir, Engleman Spruce, Hem-Fir, Lodgepole Pine and/or Spruce-Pine-Fir. Manufactured in California, Idaho, Montana, Nevada, Oregon, Washington, Wyoming in the United States and provinces of British Columbia and Alberta in Canada. 212

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

The contract also specifies such details as the minimum price fluctuation, daily price limit, contract months and last day of trading. While the quantity of lumber (North American term for sawnwood, and in this instance specifically for sawn softwood) to which this specification could be applied is large, it will be noted that it excludes production from many parts of the USA and Canada as well as from other countries. However, there is provision through a system of basis hedging to cover lumber that does not fully comply with the specification, e.g. that meets the description and grade but is produced in other areas of the USA or Canada. Theoretically, therefore, the CME futures trading could cover lumber imported from countries other than Canada, although in practice this seems unlikely to occur. The specifications for futures trading of OSB on the CME are as follows: Trading unit:

Price quote: Delivery method: Delivery point: Freight costs:

100 000 square feet of 4 ft by 8 ft panels; each 7/16 in thick and span-rated 24–16; delivered total may vary from 95 000 to 105 000 sq feet. [100 000 sq ft 7/16≤ basis equals approximately 103 m3.] US$ per mbf (1000 sq ft.). On track at producing mill by rail. Chicago. Prepaid by seller to destination, buyer pays from Chicago to destination.

Other details include minimum price fluctuation, daily price limit, contract months, trading hours and last day of trading. Note that there is no clause regarding origin. The possibilities have been explored of opening futures markets for wood products elsewhere, but so far without any definite conclusion. Usually the problem has been to identify a set of conditions, including a sufficiently homogeneous product made in sufficient quantity for which a futures market would be viable.

Tariff and non-tariff barriers Tariffs Over the past 50 years international trade negotiations under the auspices of GATT, the General Agreement on Tariffs and Trade, including the Tokyo, Kennedy and Uruguay Rounds, have centred on measures to improve market access, principally by the lowering of tariffs. It is fair to claim that they have 213

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contributed to the strong growth in world trade and economic development. The Uruguay Round, which was concluded in 1994, marked a further important step towards trade liberalisation, as well as marking the occasion that the GATT was converted into a new organisation, the World Trade Organisation (WTO). Wood products figured prominently in the GATT negotiations, not least in the Uruguay Round, in which significant reductions in tariffs were agreed. For much of the information on these reductions and other aspects of tariffs, acknowledgement is made to the FAO report by Bourke and Leitch (1998), Trade Restrictions and their Impact on International Trade in Forest Products. There have been some developments since its publication, including the negotiations between China and the United States and the European Union, which are the precursor to the likely adhesion of China to WTO. As a generalisation, it can be said that in developed countries, which as seen earlier account for the major share of world imports, most tariffs on wood products are quite low (less than 5% ad valorem on most) and only have a relatively limited impact on the volume of trade. There are some country exceptions to this, including tariffs on wood-based panels, especially plywood, some value-added products, such as items of builders’ woodwork and furniture, and various types of paper products, with rates between 10 and 15%. Both in developed and developing countries there is often a mixture of low rates for some products and higher rates for others. Only a few countries, including Singapore, Hong Kong Special Administrative Region and to a lesser extent China Taiwan Province and South Korea, have low tariffs on almost all products. Generally speaking, tariffs are appreciably lower in developed countries than in developing ones, where they may range from 10 to 60%. Quite often special preferences exist which allow exporting countries to avoid full tariff rates. Members of regional groupings get benefits from others in the group, and some countries give special rates to those with which they have close trade or other political ties. Examples include the North American Free Trade Agreement (NAFTA), the Association of SouthEast Asian Nations (ASEAN), the European Union–ACP (African, Caribbean and Pacific Group of States) and New Zealand–Australia. Most, but not all, developing countries receive the benefits of the General System of Preferences (GSP), a scheme set up by the United Nations Conference on Trade and Development (UNCTAD), under which developed countries may offer reduced tariffs to selected developing countries without reciprocal benefits. A feature of many countries’ schedules is tariff escalation, which occurs when rates rise as the degree of processing increases. Thus tariffs may be zero on roundwood and low on sawnwood, higher on wood-based panels and higher still on added-value products. This generally acts as a disincentive to trade in higher processed products and is designed to protect industries 214

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

and jobs in the importing countries. It is difficult to assess the impact of tariff escalation on trends in trade of products at different degrees of processing, as other factors also have an impact, for example lower transport costs per unit weight for higher value products. Nevertheless, the existence of tariff escalation would appear to have been a disincentive to investment in wood-processing industries in exporting countries in some instances. Table 8.3 shows the pre- and post-Uruguay Round tariff rates in the European Union, Japan and the USA, which between them account for a major part of wood products imports in the world. The rates shown should only be taken as a guide as they are continuously subject to change. Tariffs will decline or be completely eliminated as the results of the Uruguay Round are implemented. Many tariffs will be lowered over a period of years, the extent and speed varying between countries and also products. The post-Uruguay rates are ‘bound’, that is to say countries have put a ceiling on them and thus agree not to raise them above the level indicated. Virtually all pre-Uruguay Round rates are unbound, whereby they could raise the rates without warning. Where the bound post-Uruguay Round rates, set through the general negotiating process, are higher than the earlier ones, in practice there will not be a rise in the rates. Table 8.4 shows the tariffs in some of the main importers among the developing countries. Generally speaking, tariff rates are appreciably higher than in the developed countries. In quite a number of cases, the postUruguay Round (bound) rates appear higher than the pre-Uruguay Round (unbound) ones, but the comment made above about the former not exceeding the latter in practice in developed countries also applies to the developing country tariffs. South Korea is following the route of the developed countries to reduce tariffs on paper and paper products to zero. Generally speaking, though, rates in developing countries will remain substantially higher than for developed countries. An overall indication of how tariff rates will be lowered over a period of years as a result of the Uruguay Round is given in Table 8.5. For some products, including wood-based panels and especially plywood, the rates will remain quite high. On the other hand, tariff escalation will be reduced; those on wood articles will fall by 67% compared with 43% for wood and wood products as a whole and 31% for wood-based panels. Tariffs on paper and paper articles will virtually disappear, as will those on furniture in the European Union, Japan and the USA.

Non-tariff barriers In addition to tariffs, there are a wide range of rules and procedures that may impede the flow of trade. These are called non-tariff measures (NTMs), 215

216 0.0 1.4–2.9 0.0 0.0 0.0 0.0 0.0

3.8

2.0–4.2 0.0 4.5

4.5–5.7

6.0, 10.0 7.2 2.2

0.0 0.0 0.0

0.0

0.0, 3.0 0.0 0.0

3, 4

7.0 7.0

6, 7

2.4

0.0 0.0 0.0

Post-URc (bound)

Most Favoured Nation General System of Preferences Post-Uruguay Round

Source: Bourke and Leitch 1998

Note: C = Coniferous; NC = Non-coniferous;T = Tropical

c

b

a

N.B. No change in post-Uruguay Round bound tariff if it exceeds pre-Uruguay (unbound) rate

5.7 5.7

0.0 0.0 5.3–7.0

0.0

GSPb (unbound)

8.2 8.2

0.0–3.8(C) 3.0–4.9(NC) 7.6–10.0

Veneer sheets

Plywood & laminated wood Particle board & similar Fibreboard Packing cases, drums, pallets, etc. Builders’ joinery & carpentry Woodpulp Newsprint Uncoated kraft in rolls or sheets Corrugated paper & board, etc Coated paper (printing) Furniture of wood

0.0 0.0 0.0–2.5

MFNa (unbound)

European Union

0.0 0.0 4.8–7.0(C) 7.6(NC) 5.0

2.4, 2.9 2.9 0.0

1.8, 2.5

2.8–6.3 0.0 0.0

3.4–4.7

7.5(C) 7.4–12.0(T) 6.3 2.8–3.6

GSPb (unbound)

0.0 0.0

0.0

0.0

0.0

0.0 0.0

2.5

(% ad valorem)

MFNa (unbound)

Japan

0.0 0.0 0.0

0.0

0.0, 5.0 0.0 0.0

2.8, 3.9

5.0, 7.9 2.6

6.0–10.0

0.0 0.0 0.0–6.0 3.0 0.0–5.6

Post-URc (bound)

0.0–3.2 0.0–2.1 0.0–7.0

0.0

0.0–6.4 0.0 0.0

0.0, 3.2

0.0–15.2(C) 0.0–8(NC) 0.0–2.4 0.0–1.8

0.0

0.0 0.0 0.0

MFNa (unbound)

0.0 0.0 0.0

0.0

0.0

0.0 0.0

GSPb (unbound)

United States

0.0 0.0 0.0

0.0

0.0, 4.8 0.0 0.0

0.0, 10.7

0.0 0.0

0, 8

0.0

0.0 0.0 0.0

Post-URc (bound)

Current (1996/97) and post-Uruguay Round tariff rates for selected wood products in the European Union, Japan and the USA

Industrial roundwood Chips & particles Sawnwood

Table 8.3

THE INTERN ATION AL TIMBER TRADE

217 35.0

20.0, 35.0 35.0 40.0

20.0

20.0, 30.0 30.0 22.0

30.0 30.0 35.0

25.0

– – 10.0 15.0

20.0 30.0 20.0 20.0

– 60.0–70.0

5.0–15.0

MFNa (unbound)

Most Favoured Nation Post-Uruguay Round

Source: Bourke & Leitch 1998

Note: C = Coniferous; NC = Non-coniferous

b

a

Post-URb (bound)

India

N.B. No change in post-Uruguay Round bound tariff if it exceeds pre-Uruguay (unbound) rate

40.0 40.0 1.3–20.0 20.0

2.0(C) 22.5(NC) 20.0 5.0(C) 21.3(NC) 20.0, 35.0 35.0 20.0 20.0, 35.0

Post-URb (bound)

60.0 18.0 2.0 20.0

5.0–12.0 15.0 22.0 22.0

3.0 3.0

Chips & particles Sawnwood

Veneer sheets Plywood & laminated wood Particle board & similar Fibreboard Packing cases, drums, pallets, etc. Builders’ joinery, carpentry Woodpulp (chemical) Newsprint Uncoated kraft in rolls or sheets Corrugated paper & board, etc. Coated paper (printing) Furniture of wood

2.0

MFNa (unbound)

China

9.0 9.0 9.0

9.0

9.0 8.0 2.0 9.0

5.0 15.0 8.0 8.0

2.0 5.0

1.0

0.0 0.0 2.2

0.0

13.0 13.0 0.0 0.0

10.0 30.0 25.0 20.0

5.0 10.0

2.0

Post-URb (bound)

(% ad valorem)

MFNa (unbound)

South Korea

35.0 35.0 80.0

35.0

40.0 40.0 10.0 0.0–30.0

20.0 20.0 20.0 20.0

10.0 1.0–5.0

1.0

MFNa (unbound)

30.0 30.0, 50.0 20.0

30.0

20.0 20.0 20.0 30.0

10.0 20.0 20.0 20.0

5.0 10.0

5.0

Post-URb (bound)

Thailand

15.0 15.0 20.0

15.0

20.0 20.0 1.3 0.0

15.0 15.0, 20.0 20.0 15.0

10.0 12.5

10.0

MFNa (unbound)

35.0 35.0 35.0

35.0

35.0 35.0 35.0 15.0

35.0 35.0 35.0 35.0

35.0 10.0

35.0

Post-URb (bound)

Mexico

Current (1996/97) and post-Uruguay Round tariff rates for selected wood products in China, India, South Korea, Thailand and Mexico

Industrial roundwood

Table 8.4

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

THE INTERN ATION AL TIMBER TRADE Table 8.5 Uruguay Round (UR) changes in tariffs by product categories in developed countries on a trade-weighted basis Tariff pre-UR (%)

Tariff post-UR (%)

Reduction (%)

Wood in the rough (logs) Wood-based panels Semi-manufactures Wood articles Total

0.0 9.4 0.9 4.7 2.0

0.0 6.5 0.4 1.6 1.1

– 31 50 67 43

Pulp & waste paper Paper & paperboard Printed matter Paper articles Total

0.0 5.3 1.7 7.3 3.5

0.0 0.0 0.3 0.0 0.0

– 100 83 100 99

Source: Bourke & Leitch 1998

and they include health and technical standards and measures that influence prices. The impacts on trade of NTMs are more difficult to assess than tariffs and wood products face a variety of them, which in some cases can have a restrictive effect and in others not. Among the measures which have most impact on trade in wood products are:

1 Quantitative restrictions on imports These may take the form of overall quotas, a quota on imports from a specific country or a quota restricting eligibility for a particular tariff rate. For example, the European Union imposes import quotas on wood-based panels: there is an annual duty-free quota of 650 000 m3 of coniferous plywood; imports above that volume are subject to tariffs. It also has tariff quotas or tariff ceilings on newsprint, fibreboard, builders’ joinery and carpentry and furniture.

2 Technical standards and plant health (phytosanitary) standards These are concerned with human safety and health, protection of animal and plant life from pests and diseases, and maintenance of air, water and land quality. While not trade restrictions in the true sense of the term, one of their main results is to create difficulties for trade by changing relative costs and comparative advantages. As an example, Japan and some other countries have complex systems of standards and codes, especially in construction, 218

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

which create difficulties for external suppliers. Steps in the European Union to harmonise standards may have a similar impact. There are some technical regulations and standards that are environmentally motivated. Some are concerned with the physical characteristics of the products or materials used in their manufacture, while others relate to the processes used in their production. Examples include restrictions on the use of formaldehyde glues in wood-based panels; the use of certain wood preservation processes and materials; certain types of pulp bleaching process; packaging regulations; and the recovery and recycling of waste paper. Regulations in importing countries regarding the waste paper content of certain paper categories can result in trade distortions, for example by making it necessary for exporters to import waste paper and invest in processes to incorporate it in the product for export. An example of a phytosanitary regulation affecting the wood products trade is the European Union requirement that sawn softwood be treated prior to importation against the pine nematode infestation. This caused dispute between the EU and North America over the actual risk from the nematode and on the appropriate way to deal with it.

3 Other measures imposed by importing countries These include import licensing procedures; customs procedures; domestic policies on subsidies, financial assistance, tax concessions and export encouragement schemes. The question of subsidies can be particularly vexed; witness the long-running dispute between the USA and Canada, affecting the massive trade in sawn softwood between the two, concerning the royalties (stumpage) charged by Canadian provinces for logs. Subsidisation may also take the form of tax concessions, planting subsidies, assistance with transport and with road building, and so on.

4 Export restrictions These, like import restrictions, can create distortions to trade, and their use has been expanding. They are common in most developing countries and some developed ones, and have a noticeable impact on trade in such products as industrial roundwood and plywood. Export controls include total bans, export quotas or selective bans based on species. Indirect restrictions include controls on harvesting levels. Direct charges can take the form of export taxes or levies, and indirect charges in the form of royalties or reforestation levies. There may also be administrative controls such as permits and licences. Controls on log exports may have the objective of avoiding over-exploitation of the forest resource or of diverting a certain proportion 219

THE INTERN ATION AL TIMBER TRADE

of fellings to domestic industries. Measures to control log exports have been particularly prevalent in tropical countries, including Indonesia, Malaysia, Papua New Guinea, Ghana, Cameroon and Gabon. Log export restrictions have a long history in North America; in British Columbia, for example, they date back to 1906. In order to avoid falling foul of GATT/WTO rules, countries are having to replace direct quantitative restrictions by other means such as export taxes, permits and licences.

Impediments to trade Tariffs and non-tariff measures, as described briefly above, are seen as formal institutional measures, which restrict trade, either overtly or covertly. In addition, there are many measures which may be considered as impediments rather than formal trade restrictions. A common thread that runs through many of these measures is concern for the environment and especially the sustainability, in a broad sense, of the forest resource. This will be discussed in Chapter 9, where questions relating to trade and the environment are raised. Here, we may note certain types of impediment:

1 Bans and boycotts In certain European countries, the USA and a number of other developed countries, restrictions or bans on the use of certain wood products have been introduced. Some bans on the use of wood products have been introduced by sub-national government authorities, such as local councils, housing authorities or government departments, often without any direct association with official national policy on the matter, on the grounds that they would support the movement to protect forests. Usually the main target has been tropical wood. Such actions have most frequently occurred in Germany, the Netherlands and the United Kingdom, as well as the USA. Doubt has been expressed as to whether restrictions imposed by subnational authorities are consistent with GATT/WTO rules. Whatever their legal status, however, they have had a negative impact on trade in wood products from certain provenances by creating uncertainty in the market place. In a number of countries, some retailers, including do-it-yourself stores, and traders have formed voluntary groups, which have agreed to stop handling products that are perceived as not coming from sustainably or well-managed forests. In doing so, they have usually been supported by environmental non-government organisations (ENGOs). It is difficult to assess what impact such efforts are having on demand and hence on trade 220

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

volumes and patterns; one effect is likely to be to shift market share from one supplier to another, as well as possibly to cause a general downward shift in demand. It is also unclear what proportion of the ultimate consumers are convinced that changes in their purchasing decisions will have a positive impact on the quality of forest management – if they are aware of the issue at all.

2 Certification and ecolabelling Certification has been promoted by its proponents as a marketing tool that will enhance the acceptability of certified products by raising purchasers’ confidence that they come from forests that are sustainably managed. Nevertheless, the fact that its aim is to encourage consumers to discriminate in favour of certain products, and therefore against others, does suggest that its application is likely to lead to trade distortion. Furthermore, the existence of some certified products on the market may lead the consumer to conclude that all uncertified products have been produced in an environmentally unacceptable way, a conclusion that will often be erroneous. Certification is mentioned here as a possible trade impediment. Further discussion on this complex issue is postponed to the next chapter, which deals with various aspects of the environment and its relation to trade in wood products.

3 International environmental regulations One such regulation, which may have an increasing impact on the trade in wood products, is the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). This is an international agreement which has clearly trade-restrictive elements and uses a system of permits issued by designated authorities in member countries to regulate international trade in endangered species. Although in existence for over two decades, CITES has only relatively recently become an issue for forestry, mainly because of attempts by developed countries, often at the instigation of ENGOs, to have a number of commercially important tree species found in tropical developing countries listed under CITES. In 1992 one species, Brazilian rosewood (Dalbergia nigra) was placed on the CITES Appendix I listing, which bans international trade, and three others, namely ‘true’ mahogany (Sweitenia macrophylla) from central America, afrormosia (Pericopsis elata) from West Africa and lignum vitae (Guaiacus officinale) from Central America, were put on Appendix II, which requires the monitoring of international trade (Humphreys 1996). The issue has proved highly controversial, partly because it raised questions about how to determine 221

THE INTERN ATION AL TIMBER TRADE

whether a species is endangered, who does so, who has the right to instigate the listing of species, and what are the rights of the affected countries. Questions were also raised as to whether CITES or the International Tropical Timber Organization (ITTO) should have the authority to restrict the trade in endangered tropical tree species. Some impediments to trade were designed with other objectives in mind, notably environmental protection, with trade restriction occurring as a by-product. It is important to recognise that they, as well as tariffs and nontariff measures, are not the only, and not necessarily the principal difficulties, which those engaged in international trade in wood products have to face. Producers and exporters have the enduring problem of producing and offering products to the market at competitive prices that the consumers, through the importers, will buy. Moreover, there are many factors having an impact on the international trade in wood products that are wholly outside the control or influence of the market players.

Globalisation and regional integration Globalisation Judging by the public demonstrations against globalisation outside recent meetings of the World Trade Organization, the World Bank and the International Monetary Fund, there is considerable concern about its impact on the livelihood of citizens in certain sections of society. There has been a feeling that it is a means for the rich to get richer while the poor get poorer. The cynical might suggest that globalisation is a way for multinational companies, mostly American, to profit from domination of international markets without undue interference from national governments, and without being obliged to take responsibility for any negative social consequences. More reasonably, it could be said that, in the conditions of the late twentieth century of increasingly free trade and rapid transfer of information, capital, goods and services, international companies became obliged, if they wished to survive in an intensely competitive environment, to locate their operations optimally in relation to their markets and sources of supply of labour and other inputs. In practice, this has been resulting in certain manufacturing operations, notably the more labour-intensive ones, becoming located in countries with low labour costs. There has also been strong growth in intra-company or inter-industry trading, for example of components for the construction of vehicles and electronic goods, which exploits comparative advantages between countries. The benefits have included cheaper goods for consumers, and industrial development and new labour 222

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

opportunities in developing countries. The disbenefits have included closure of industries in some industrial sectors, such as textiles, steel-making and ship-building, and loss of jobs in some countries and some social and environmental abuses, such as the use of child labour and uncontrolled emission of pollutants. Part of the problem has been a failure in understanding and communication about what globalisation is, who is directing it, whether governments and international agencies are unduly influenced by the industrial lobby, and how it affects different groups of society. One description of globalisation is given in Pocket Strategy: the Essentials of Business Strategy from A to Z (1994): •

•

•

•

The marketing of uniform products around the world, an idea put forward by Harvard’s Theodore Levitt in an article published in the Harvard Business Review in 1983. The growing global uniformity of consumer tastes (in which, for example, urban Spaniards have more in common with urban Germans than they have with their rural fellow countrymen) and computerised manufacturing and distribution made globalisation possible. Its reward was huge economies of scale. A company can follow several strategies in order to sell its goods or services globally: Export from one or two domestic production facilities. This is suitable where there are vast economies of scale to be made, as the Japanese have done with certain consumer goods; Set up franchises of one sort or another around the globe. This is the pattern followed by those global brands where there is an important service element . . . The local franchisee takes responsibility for the running of the sales operation. The franchiser gets the widest possible marketing reach for the minimum capital investment; Set up multinational manufacturing, with plants making the same products in many different countries. This was a pattern favoured by the very earliest multinationals (mostly US and European), which were often no more than a series of national plants serving national markets.

As the ease of communication has grown, other types of international company have developed from the earlier models. National managers, who formerly had considerable powers, have often seen much of those powers withdrawn from them back to ‘headquarters’. The name ‘multinational’, which the United Nations has defined as a company which owns and/or controls economic resources in two or more countries, has proved inadequate. Today’s mega-corporations are no longer multinational; they are more appropriately termed trans-national or global companies. 223

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It is becoming apparent that the capacity of a country and its population to benefit from globalisation is linked to their ability to innovate technology or adopt it by importing it from elsewhere (Sachs 2000). A small part of the globe, comprising most of the industrially advanced countries with about 15% of the world’s population, falls into the group of technological innovators (North America, western Europe, Japan, Australia). A second group, with about half the world’s population, are in the technological adopters group. The dividing line between them and the technologically excluded countries, with about a third of the population, does not always conform with national boundaries. The technological adopters include the northern part of Mexico, the southerly part of South America, the Iberian peninsula, some eastern Europe countries, the southern part of India, the eastern seaboard provinces of China, south-east Asian countries and New Zealand. The technologically excluded include most of the CIS area, subSahara Africa, northern South America and much of continental Asia. Many of these, especially in the tropics, are caught in a poverty trap. Among their greatest problems are tropical infectious diseases, low agricultural productivity and environmental degradation, including deforestation. They are too poor to buy or license the technologies, even if they exist, on the necessary scale. Alternatively, the technologies do not exist in a form which they can use. The ability or inability to benefit from technological development appears, therefore, to be a major factor leading to the widening gap between the rich and poor countries. It will require some fundamental rethinking of strategies, especially in the international development agencies, to reverse the trend. How is globalisation affecting the forest sector and international trade in wood products? The short answer is probably not very much, at least directly. One reason for this is that, in comparison with the industries in some other sectors of the economy, the wood products industries do not generally rate as mega-corporations, although this is changing as some US and European companies based on pulp and paper manufacture indulge in trans-national mergers. Yet no company, large or small, and in whatever industrial sector, is entirely shielded from the secondary effects of globalisation. Faster and easier global communications improve the possibilities for companies to enter new markets and intensify competition, which usually will be to the benefit of the consumer. The traditional suppliers will be faced with the need to improve their competitiveness through better quality, or keener pricing, or both. The structure of trading is also likely to be affected as a result of direct dealing between producer and consumer, reducing the need for middlemen such as importers and wholesalers. Globalisation is here to stay, even if it may come to wear a more ‘human 224

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

face’ in response to the growing concerns about its impact on certain sectors of society.

Regional integration Integration can mean many things, but regional integration as used in the present context refers to the joining of countries into groups for political or economic purposes. Well-known examples include the European Union, originally 6, currently 15 and possibly within the next 10 or 20 years 30 countries; the Council for Mutual Economic Assistance (CMEA) now defunct, which comprised the countries with centrally planned economies of central and eastern Europe; NAFTA, the North American Free Trade Agreement, comprising Canada, Mexico and the USA; Mercosur (Argentina, Brazil, Paraguay, Uruguay); and ASEAN, the Association of South-East Asian Nations; there are quite a number of others. The mandates of the regional groupings vary widely, but one thing that most of them have in common is the objective of promoting trade among their members. By implication, any expansion between members, for example by the reduction or elimination of tariffs between them, might be at the expense of trade with third parties. In practice this is not necessarily the case, if the effect of regional cooperation is to stimulate member countries’ economies and hence overall demand for goods and services. Another effect of both globalisation and integration could be to encourage the international division of labour, including specialisation in the production of goods. Little analysis seems to have been carried out on the effects of regional integration on international trade in wood products. One preliminary analysis (Wardle and Michie 1998) indicates that the development of that trade is strongly related to general economic developments beyond any regional groupings; that its development in detail is definitely related to the specific economic trends of the region; and that certain trends are directly associated with membership and changes in membership of regional groupings. Quite clearly, much more work would be needed before any specific conclusions could be drawn. This would need to identify not only those who benefit from regional integration, including the members of the ‘clubs’ and those attached to them in some way by treaties, but also those who stand to lose, the third parties. One tentative conclusion can be drawn with regard to specialisation on the basis of evidence within the European Union. The removal of trade barriers between members does seem to have stimulated the two-way trade in certain wood-based panels and paper and paperboard products, to which attention was drawn earlier in describing major trade flows in Chapter 6. 225

THE INTERN ATION AL TIMBER TRADE

International institutions concerned with wood products trade Reference has been made in earlier chapters to a number of international institutions, both governmental and non-governmental, which are involved in one way or another in the forest and wood products sector. A list of the more important ones is given in Appendix 1. Some governmental organisations have mandates covering international trade in wood products on a global scale, such as FAO, the World Bank, WTO and ITTO; others, including ASEAN, NAFTA, UN-ECE and EU, deal with trade issues on a regional basis. A similar distinction can be made amongst the NGOs. This section will describe briefly the activities of a few of the institutions that have a particular concern with the markets and trade of wood products.

Governmental organisations FAO – Food and Agriculture Organization of the United Nations FAO was established in 1945 as one of the specialised agencies of the UN. Nearly all countries are members, the main exception being the Russian Federation. The responsibilities of its Forestry Department cover all aspects of the forest and wood industries sector, with special emphasis on assistance to developing countries. The principal governmental body is the Committee on Forestry (COFO), supported by six regional Forestry Commissions. Among a number of other statutory bodies is the Advisory Committee on Paper and Wood Products. Much of FAO’s effort is devoted to technical assistance projects in developing countries. At its headquarters in Rome, its secretariat not only provides back-up to those projects but produces numerous publications on a range of topics, including questions relating to forest industries, trade, markets and marketing, and outlook studies. It collects and publishes comprehensive worldwide statistics on the forest resource and forest products, which are also available from its extensive database. Considerable use of this valuable source has been made in this book.

ITTO – International Tropical Timber Organization The agreement to establish ITTO was negotiated in 1983 under the auspices of UNCTAD, the United Nations Conference on Trade and Development, and entered into effect in 1985, although ITTO itself did not become operational until 1987, with headquarters in Yokohama. Membership consists of over 50 countries, roughly half being tropical timber producers and half consumers. Its main body is the International Tropical Timber Council (ITTC), and there 226

INFLUENCES ON WOOD PRODUCTS MARKETS AND TRADE

are three permanent committees dealing with reforestation and forest management, forest industry and economic information and market intelligence. At the biannual sessions of the ITTC the situation and short-term outlook for the markets for tropical wood products are analysed. ITTO collects and publishes data on these products.

UN-ECE – United Nations Economic Commission for Europe The ECE, located in Geneva, is one of five UN regional economic commissions, but is the only one with a specific mandate in the field of forestry and wood products. Its membership consists of 55 countries of Europe, including the 12 members of the Commonwealth of Independent States, and Canada and the USA. One of its principal subsidiary bodies is the Timber Committee, established in 1947, which is serviced by the Timber Section, a unit of the ECE Trade Division. The Timber Committee carries out annual assessments of the wood products markets in Europe and North America, and its secretariat publishes market reviews and other market-related publications, including a series of studies on the long-term outlook for the forest sector. It is also responsible for collecting and publishing statistics on the forest resource and wood products in ECE member countries, working in close co-operation with FAO.

UNCTAD/WTO International Trade Centre (ITC) The ITC, also located in Geneva, is mandated to assist developing countries to develop overseas markets. This has included technical assistance on the establishment of export-oriented wood-processing industries and on trading and marketing of their products, notably added value products. It has produced a series of market studies.

Other inter-governmental organisations It has perhaps been invidious to single out only four organisations for particular mention, since there are a large number of bodies that are dealing with wood products trade and markets in one way or another. The intention was, however, to give examples of organisations active in the field rather than to be comprehensive. Generally speaking, however, the involvement of many organisations in wood products trade and markets tends to be either as a part of a broader responsibility, such as overall economic development, or on an ad hoc basis. Among the inter-governmental organisations falling into these categories are the G7 Summit Meeting (G8 including the Russian 227

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Federation), the World Bank, the International Monetary Fund (IMF), the World Trade Organisation (WTO), including its Committee on Trade Barriers (CTB) and Committee on Trade and the Environment (CTE), the United Nations Industrial Development Organization (UNIDO), the United Nations Commission on Sustainable Development (UNCSD), the International Forum on Forests (IFF), the International Labour Organization (ILO), the International Organization for Standardization (ISO) and the Organization for Economic Co-operation and Development (OECD). The European Union and its executive arm, the European Commission (EU), and EUROSTAT, should also be mentioned as a supra-national rather than inter-governmental body.

Non-governmental organisations Among the many thousands of NGOs there are a number that have an interest, either specific or within a broader framework, in the trade and markets of wood products at the international level. As examples of the former may be mentioned the Forest Stewardship Council (FSC), the International Technical Association of Tropical Timber (ATIBT), the Union pour le Commerce des Bois Tropicaux dans la C.E.E. (UCBT), the African Timber Organization (ATO), the European Confederation of Wood-Working Industries (CEI-Bois) and the South-East Asian Lumber Producers Association (SEALPA). Examples of NGOs operating in a broader framework include Friends of the Earth (FoE), the World Conservation Union (IUCN) and the World Wide Fund for Nature (WWF). There are also many international or national think-tanks and research organisations which give special attention to wood products trade and markets, including the World Resources Institute (WRI), Resources for the Future (RFF), the International Institute for Applied Systems Analysis (IIASA), the Center for International Trade in Forest Products (CINTRAFOR), the Center for International Forestry Research (CIFOR), the European Forest Institute (EFI) including its EFIDAS database, which was used extensively in Chapter 6, and the International Institute for Environment and Development (IIED). Most of these institutions have been mentioned elsewhere in this book, usually as sources of information. Again, the list is selective and excludes not only some international institutions but also the very many national institutes and universities that carry out research and analysis on the international trade of wood products.

228

CHAPTER

9 Trade and the environment

I

n the closing decades of the twentieth century there was growing awareness of, and concern about, the importance of environmental protection. The fate of the world’s forests figured prominently in international debates, triggered initially by reports of destruction and degradation of tropical forests and of damage to temperate and boreal forests apparently caused by air pollution. The debates have raised, in addition to many other issues, the nature of the interface between environmental protection and international trade in wood products. What, for example, has been the role of international trade in contributing to the loss of forests and of biodiversity in certain regions? And conversely, how have measures to protect the environment affected the trade and markets for wood products? Some of the principal issues are discussed in this chapter.

Deforestation, afforestation and reforestation Deforestation and forest degradation Until a few thousand years ago, forests covered a large part of the earth’s land surface. As man changed from being a hunter-gatherer to a more settled 229

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existence as a farmer, he needed increasing areas of land for his crops and began to clear the seemingly inexhaustible forest to make way for agriculture. Populations built up gradually in the more habitable parts of the planet, notably the temperate regions in China and around the eastern Mediterranean. Some of these areas became largely denuded of forest cover and have remained so to the present day. Later, forest clearance occurred in much of Europe and later still in the eastern parts of the United States. Compared with the extensive tree cover in pre-settlement times, today it is only about 2% in the Near East, 14% in China, 31% in Europe as a whole and less than 10% in the Netherlands, Denmark, the United Kingdom and Ireland (these percentages exclude the area of other wooded land). (FAO 1999, UNECE/FAO 2000) Until relatively recent times, forests in the boreal and tropical regions were largely but not entirely spared. Heavy forest clearance and over-cutting to provide wood for mining and smelting occurred in southern and central Sweden up to the mid-nineteenth century, until mass emigration and policies to replant the forest reversed the trend. More recently considerable areas of forest were clear-felled in Canada and the former USSR, partly to make way for agriculture, partly to meet rapidly growing demand for wood. Measures to ensure regeneration were often lacking. In tropical regions, deforestation and forest degradation has become widespread only during the second half of the twentieth century when, with improving access to medical care and lengthening life expectancy, populations began to increase rapidly. For as long as populations remained light, systems of shifting cultivation, in which small areas of forest were cleared and used for a few years for the growing of crops before being abandoned, allowed the forest to recover. As populations rose, the period between successive clearances became reduced, allowing insufficient time for the restoration of the forest and resulting in progressive degradation; or the forest was permanently cleared to make way for agriculture and settlement. In drier parts of the tropics, the problem was compounded by the cutting of trees for fuelwood and other domestic uses. The sight of village womenfolk trudging increasingly long distances to collect their daily requirements of fuelwood for cooking became more and more common. Due to problems of data collection and interpretation, the rate of deforestation and forest degradation in tropical regions has proved difficult to assess accurately. It was widely accepted that the rate was accelerating up to the end of the 1980s, with estimates of losses ranging from 10 to 25 million ha a year. This raised fears that within a few generations, most of the tropical forests would disappear. The latest estimates from FAO, probably the most reliable but still with some elements of uncertainty attached to them, put the annual loss of forest area between 1990 and 1995 at 12.6 million ha (Table 9.1). 230

231 84.6 851.2 563.9 1796.9

Tropical Central America

Tropical South America • Brazil

TOTAL TROPICAL REGIONS

Source: FAO 1999

42.7

295.0 77.8 76.0 141.2 115.2

Tropical Asia: • South Asia • Continental south-east Asia • Insular south-east Asia • Indonesia

Tropical Oceania

523.4 48.8 210.7 147.1

Forest area in 1990

1733.9

827.9 551.1

79.4

41.9

279.8 77.1 70.2 132.5 109.8

504.9 46.3 204.7 141.3

(million ha)

Forest area in 1995

1701.7

822.4 546.2

79.0

41.8

255.8 61.8 67.9 126 103.7

502.7 46.0 204.4 140.7

Of which: Natural forest

Estimated rate of decrease in forest area in tropical regions between 1990 and 1995

Tropical Africa: • West moist Africa • Central Africa • Tropical southern Africa

Table 9.1

12 593

4 655 2 554

1 037

151

3 055 141 1 164 1 750 1 084

3 695 492 1 201 1 158

Annual loss 1990–1995 (1000 ha)

0.7

0.6 0.5

1.3

0.4

1.1 0.2 1.6 1.3 1.0

0.7 1.0 0.6 0.8

Annual loss 1990–1995 (%) TRADE AND THE ENVIRONMENT

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One uncertainty is whether the figures of the area loss are gross or net, that is to say, whether and to what extent they take account of areas that were cleared of forest, which subsequently had a forest cover restored naturally or artificially by planting. Nevertheless, there is no doubt whatsoever that the tropical forest area that has been lost permanently to other uses or to no use at all is very considerable and contrasts with an increase, admittedly fairly modest, in the area of temperate and boreal forest, as was noted in Chapter 2 (Fig. 2.4). Furthermore, the declining trend is common to all tropical regions and countries, albeit with differences in rate. Among individual countries, the largest decreases reported between 1990 and 1995 were in Brazil with 2.55 million ha and Indonesia with 1.08 million per year. Some unofficial estimates put the rate of forest losses appreciably higher. While there has been wide consensus that the principal causes of tropical deforestation have been socio-economic, led by the needs for more land for agriculture and for more trees to be cut for fuelwood, there has been considerable controversy as to the importance of the role of commercial logging. On the one hand, removals of industrial wood in the tropical countries, although steadily increasing in relative importance, still accounted for a minor part of total wood removals, about 20% in 1997 in tropical countries, including removals from plantations. Besides that, the exports of wood products originating from natural tropical forest were equivalent to only about one-quarter of total industrial wood removals in tropical developing countries. Therefore, the argument goes, commercial exploitation of the tropical forest, and especially commercial exploitation for export, has played only a small role in total deforestation. The counter-argument is that commercial exploitation is a far more important component among the causes of tropical deforestation than the bare statistics show and is based on a number of premises. One is that it involves the opening up of the natural forest with logging roads and tracks in order to extract the few trees per hectare that are commercially attractive, and that in so doing it damages a lot of the remaining trees and disturbs the environment. Furthermore, it allows access to the forest to colonisers and others, who can then carry on the process of clearance and burning in order to grow crops and establish homesteads. Another aspect concerns biodiversity and the extremely complex interdependence of species that is characteristic of the tropical forest. The removal of one or two species of tree, which is typically the case when the tropical forests are ‘creamed’ of the attractive commercial species, can lead to a breakdown in the linkage between those species and others, including animals, birds, insects, fungi and other fauna and flora, possibly leading to extinction of some of them in extreme cases. A major part of all terrestrial plant and animal life is found in tropical forests, and a correspondingly high proportion of the biodiversity loss occurs as a result of the degradation and 232

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removal of the tropical forest. Harvesting operations may also result in the fragmentation of large forest blocks into smaller areas, with associated ‘edge effects’, which can negatively affect wildlife habitat and biodiversity. Various measures are being introduced to reduce the damage to the forest from harvesting operations, including the application of less destructive extraction techniques and the harvesting of a wider range of species so that logging can be concentrated on a smaller area. A further argument for seeking to bring a halt to deforestation, wherever it occurs and from whatever cause, is the contribution, even if small compared to that of the burning of fossil fuels, it is making to the accumulation of ‘greenhouse gases’ in the atmosphere and to possible changes in climate, which are discussed later in this chapter. Commercial exploitation of natural forests has by no means been confined to the tropical regions: a large proportion of the removals in the former USSR and North America has come from these forests. Particularly in North America, felling of natural forests has attracted criticism from the environmental movement on the grounds of loss of habitat of certain rare species, such as the northern spotted owl in the northwestern states of the USA. Even though there are strict policies for the restoration of such areas after felling by natural regeneration or by planting, fellings in publicly-owned forests have been seriously curtailed. Worldwide, therefore, there has been increasing pressure to reduce the amount of fellings in natural forests or at least to introduce sustainable forest management in these forests. This, coupled with the fact that exploitation of the remaining natural forests has become progressively more difficult and expensive due to increasing distance to markets and reduced accessibility, points to a lowering availability and/or greater cost of the higher qualities of wood found in the natural forests. Among the consequences for markets could be some substitution of the products of these quality assortments, such as plywood and joinery and furniture grades of sawnwood by OSB and MDF, and changes in the volume and pattern of trade of the former. For example, it is probable that Indonesia and Malaysia may not be able to maintain the present high levels of plywood exports, or Malaysia its sawn hardwood exports. On the other hand, any broadening of the range of species harvested from tropical forests could go hand in hand with the trend towards greater secondary processing in the exporting countries, for example of furniture and building components.

Afforestation and reforestation, including plantations Afforestation is the establishment of forest stands on non-forest land, and reforestation is the regeneration of trees on forest land after clearance by 233

THE INTERN ATION AL TIMBER TRADE Table 9.2 Area of forests according to the degree of ‘naturalness’ in the developed temperate and boreal regions in the mid-1990s

Total forest

Forests undisturbed by man

Semi-natural forests

Plantations

(million ha) North America Europe Former USSR Othera TOTAL

Share of plantations in total (%)

462 169 863 189

143 7 751 24

305 151 88 152

14 11 24 13

3 7 3 7

1683

925

696

62

4

a

Australia, Japan, New Zealand Source: UN-ECE/FAO 2000

felling, fire or other causes. Both may be achieved either naturally or artificially by planting. The definition of plantations is ‘forest stands established by planting or/and seeding in the process of afforestation or reforestation. They are either: of introduced species; or intensively managed stands of indigenous species which meet all the following criteria: one or two species at plantation, even age class, regular spacing’ (UN-ECE/FAO 2000). The dividing line between plantations and semi-natural forests may be difficult to discern, since a stand which began as a plantation may later develop into semi-natural forest depending on the silviculture applied. In Chapter 2, the temperate and boreal forests in developed countries were sub-divided into three categories of ‘naturalness’: those undisturbed by man; semi-natural forests; and plantations (Fig. 2.3, Table 9.2). The reported area of plantations in those countries in the mid-1990s was 62 million ha, or 4% of the total area of forest. The proportion was higher – 7% – in Europe, Japan, Australia and New Zealand, but lower – 3% – in North America and the former USSR. The principal purpose of plantations in these regions is for the production of industrial wood, but there are some areas, for example in parts of Spain, France and the former USSR, where they are intended for soil and water protection, slope stabilisation or wind protection. In some countries, such as the United Kingdom, Japan and Australia, plantations were created initially with the intention of building up a strategic wood reserve and of reducing dependency on imports of wood products, although in some cases this objective subsequently became of less priority. In others, such as New Zealand, Portugal and Ireland, they have become the basis for a flourishing export industry. Among the countries where plantations make up a sizeable part of the total forest area are Ireland and the Netherlands 234

TRADE AND THE ENVIRONMENT Table 9.3 Reported forest plantation areas and annual establishment rate in developing countries in 1995 Reported areasa

Industrial

Nonindustrial

Total

Estimated net areasb

Area established per year

(1000 ha) Asia & Oceania Africa Latin America

31 781 3 787 7 826

21 216 3 025 2 134

52 997 6 812 9 960

40 471 5 861 8 898

2330 288 401

TOTAL DEVELOPING COUNTRIES

43 394

26 375

69 769

55 230

3019

a

Areas planted for wood production only.They do not include plantation areas established for protection purposes or for non-wood products b Derived from the reported areas using coefficients to allow for poor survival or other losses Source: FAO 1999

(almost 100%), Denmark (76%), United Kingdom (69%), Belgium (46%), Japan (44%) and New Zealand (19%). The area of forest plantations in the developing regions (tropical and temperate zones combined) has been growing over recent decades, and by 1995 had reached an estimated net area (after allowing for planting failures) of 55 million ha (Table 9.3). This includes only areas planted for wood production, both industrial wood and fuelwood and other wood for domestic purposes, but not the considerable areas established for protection purposes or the production of non-wood products (FAO 1999). China, India, Indonesia and Brazil had the largest areas of plantations, with about 34, 15, 6 and 5 million ha respectively in 1995: these areas including plantations for purposes other than wood production (FAO 1997). Other developing countries with more than a million ha of plantations were Vietnam, South Korea and Chile, while Argentina and Thailand had more than half a million ha. The species chosen for plantations in tropical and sub-tropical countries are usually fast growing, such as species of pine, eucalyptus, poplar, acacia and teak, and their yield per hectare per annum is usually much higher than is possible from the natural forest. In temperate countries, the species commonly chosen for plantations include pines, spruces, Douglas fir and poplar. Their share of total removals of industrial wood is far higher than that of their area of forest (Table 9.4). In Brazil, the area of plantations in 1995 was only 1.2% of the total forest area but provided 60% of the industrial wood removals. In Argentina, the corresponding shares were 2.2 and 60%, in Chile 17.1 and 95%, and in New Zealand 16.1 and 93%. In Brazil, Chile and New Zealand, a large part of the 235

THE INTERN ATION AL TIMBER TRADE Table 9.4 Plantation area and share of total wood production from plantations in some countries with important forest plantation estates Share of forest plantations

Argentina Brazil Chile New Zealand Zambia Zimbabwe

In area (%)

In industrial wood production (%)

2.2 1.2 17.1 16.1 0.5 0.4

60 60 95 93 50 50

Source: FAO 1997

removals from plantations finishes up as exports, either as wood raw material (logs and chips) or processed wood products, such as sawnwood, woodpulp, wood-based panels and paper. Theoretically, the establishment and utilisation of plantations should ease the pressure on natural forests, both from domestic demand and from exports. This is true to the extent that the products from plantations can substitute those from the natural forest. However, the quality of plantationgrowth wood is generally inferior to that from the natural forest in such characteristics as coarseness of grain and knottiness. This can be at least partly overcome by investing in such techniques as pruning of the stems to produce clear, knot-free logs and various processing techniques, including impregnation and drying regimes, to improve the strength, stability or attractiveness of the wood. This has been achieved, for example, with New Zealand radiata pine, one of the fastest-growing plantation species. The expectation is that plantation-grown wood will account for an increasing share of the industrial wood harvested and used worldwide. One scenario, which assumes planting rates higher than present ones, forecasts that the world volume of industrial wood from plantations in 2030 might be 3 times higher than in 1996, with its share of total supply increasing from 25 to 46% (Whiteman and Brown 1999). Another scenario, which looks at the intensity of management according to different categories of ownership, envisages that production from fastgrowing tropical plantations could raise its share of the industrial wood total from 4 to 13% between 1995 and 2020, while that from natural forests would decline from 38 to 33% and from all other forests from 58 to 54% (Brooks et al. in Solberg (ed) 1996). Within the last group, which in temperate and 236

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boreal regions corresponds approximately with the area of semi-natural forests plus plantations, the share of wood production from privately-owned forests would increase, especially from industry-owned forests, while that from publicly-owned forests would decline as a result of some of these forests being removed from wood production. Harvesting intensity (volume of industrial wood harvested per ha), which averaged 0.5 m3/ha worldwide on productive forest in 1995, was as high as 4.6 m3/ha in industry-owned forests and 2.8 m3/ha in tropical plantations (both rising to 6.0 by 2020), but only 0.3 m3/ha in natural forests. From the environmental viewpoint, there are two aspects to consider relating to plantations. On the one hand, to the extent that they may relieve pressure on natural forests, their environmental impact is likely to be positive, provided of course that natural forest has not been destroyed in order to make way for plantations. On the other hand, to maintain them as highyielding monocultures over a long period of time (several rotations) is probably not achievable without considerable inputs of fertilisers and pesticides. In this respect they resemble agricultural crops far more closely than forest, and need to be judged as such from the sustainable management and biodiversity points of view. The contribution of plantations to international trade in wood products is becoming increasingly important. Exports from some countries, including New Zealand, Chile, Brazil, Portugal and Ireland, are based to a greater or lesser extent on plantations, and over recent decades have influenced the pattern of trade in such products as softwood logs, sawn softwood, woodpulp and MDF. In importing countries also, increased domestic supply from plantations has partly replaced imports, as for example in the United Kingdom with sawn softwood and particle board, and Australia with sawn softwood and MDF. Ireland and Australia are two countries that may sooner or later shift from being net importers to net exporters of wood products on the basis of their plantations.

Sustainability The need for sustainability Everybody has their own idea about what sustainability entails. No one has yet come up with a universally acceptable definition of the term. The concept of sustainability has been actively debated since even before the publication of the report of the World Commission on Environment and Development, Our Common Future, better known as the Brundtland Report (WCED 1987). This report pointed out that sustainability in the devel237

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opment context is not a fixed state of harmony, but rather a process of change in which the exploitation of resources, the direction of investments, the orientation of technological developments and institutional change are made consistent with future as well as present needs. It contains two key concepts: 1 2

That of ‘needs’, in particular the essential needs of the world’s poor. That of limitations, imposed by the state of technology and social organisation on the environment’s ability to meet present and future needs.

Sustainability should be understood in a broad sense, embracing its economic, social and environmental dimensions. As applied to forestry, it should not be confused with the narrower concept of sustained yield of a particular output, usually wood production. FAO (1991) defined sustainable development in the agriculture, forestry and fisheries sectors as follows: Sustainable development is the management and conservation of the natural resource base and the orientation of technological and institutional change in such a manner as to ensure the attainment and continued satisfaction of human needs for the present and future generations. Such sustainable development (in the agriculture, forestry and fisheries sectors) conserves land, water, plant and animal genetic resources, is environmentally non-degrading, technically appropriate, economically viable and socially acceptable.

The definitions or concepts proposed by other bodies reflect differences in emphasis, but generally follow the same line as the FAO definition. For example, the definition adopted by the International Tropical Timber Council (ITTC) in 1992 is as follows: Sustainable forest management is the process of managing permanent forest land to achieve one or more clearly specified objectives of management with regard to the production of a continuous flow of desired forest products and services without undue reduction of its inherent values and future productivity and without undue undesirable effects on the physical and social environment. For the national level, a forest policy aiming at sustainability is a policy that guarantees the sustainability of all ecological forest types of a country in a balanced way and divided over a reasonably sized permanent forest estate. For the forest management unit level, management of a certain forest is considered to be sustainable when it guarantees the continuity of all recognised principal functions of a particular forest without 238

TRADE AND THE ENVIRONMENT undue effects on the other functions (Granholm, Vähänen and Sahlberg (eds) 1996).

In a resolution adopted by the Helsinki Ministerial Conference on the Protection of Forests in Europe, 1993, the following definition was used: Sustainable management means the stewardship and use of forests and forest lands in such a way, and at a rate, that maintains their biological diversity, productivity, regenerative capacity, vitality and their potential to fulfil, now and in the future, relevant ecological, economic and social functions, at local, national and global levels, and that does not cause damage to other ecosystems. (op. cit.)

The difficulties of reaching consensus are revealed by the use of such indeterminate words as ‘undue’, ‘reasonably’ and ‘relevant’. The ITTC definition does make the distinction between sustainability at the national level and management unit level, and the Helsinki one at local, national and global levels. In fact, the question arises at what level the principle of sustainability should be applied: individual site, stand, forest, landscape, regional, national, international. Other questions that come to mind are: 1

how is sustainable forest management (SFM) to be reconciled with sustainability at the broader level, overall land use, demographics, rural development, economy, energy and so on? 2 To what extent should man-imposed sustainability emulate or seek even to improve on nature? Even without intervention by man, the species composition of an undisturbed forest ecosystem changes over time as species wax and wane through a process of natural selection. 3 In short, are we prepared to compromise when it comes to sustainability, and if so what are the acceptable trade-offs? (Peck et al. in Sohlberg (ed) 1996)

The principle of sustainability in general, and of SFM in particular, is no doubt accepted by everyone. When it comes to defining it, opinions differ according to each person’s perspective, while attempting to apply the principle in practice raises yet further difficulties. The development of criteria and indicators for sustainable forest management was seen as the way forward. United Nations Conference on Environment and Development Before discussing criteria and indicators, let us take a step back and recall that the United Nations Conference on Environment and Development 239

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(UNCED), held in Rio de Janeiro in 1992, marked a turning point in global attitudes towards the environment in general and environmental concerns relating to the forest in particular. In the latter respect, UNCED was in marked contrast to the first global conference on the environment, the 1972 United Nations Conference on the Human Environment in Stockholm, during which issues related to forests were hardly raised. In the intervening period, forestry matters came more and more to the fore in national and international debates, while since UNCED and largely as a result of it there has been an explosion of meetings and initiatives surrounding the problems of forests and forestry. Outputs from UNCED included: Agenda 21, intended as a blueprint for action by governments, aid agencies and others concerned with environmental and development issues; a General Declaration; the establishment of a UN Commission on Sustainable Development (CSD); the Framework Convention on Climate Change; and the Framework Convention on Biodiversity. All of these contained elements relating to forestry, but in addition there emerged the Non-legally binding authoritative statement for a global consensus on the management, conservation and sustainable development of all types of forests, abbreviated to the ‘Statement of Forestry Principles’ (Humphreys 1996). This fell short of the expectations of those calling for a Global Forest Convention, including the Group of Seven Industrialized Countries (G7) at its meeting in 1990. Nevertheless, it provides a rather comprehensive set of principles, which have provided a basis for a large number of initiatives taken at the international, national and local levels during the 1990s. The statement consists of a preamble and fifteen principles or elements, two of which deal specifically with international trade. They read as follows: 13.

(a) Trade in forest products should be based on nondiscriminatory and multilaterally agreed rules and procedures consistent with international trade law and practices. In this context, open and free international trade in forest products should be facilitated. (b) Reduction or removal of tariff barriers and impediments to the provision of better market access and better prices for higher added-value forest products and their local processing should be encouraged to enable producer countries to better conserve and manage their renewable forest resources. (c) Incorporation of environmental costs and benefits into market forces and mechanisms, in order to achieve forest conservation and sustainable development, should be encouraged both domestically and internationally. (d) Forest conservation and sustainable development 240

TRADE AND THE ENVIRONMENT policies should be integrated with economic, trade and other relevant policies. (e) Fiscal, trade, industrial, transportation and other policies and practices that may lead to forest degradation should be avoided. Adequate policies, aimed at management, conservation and sustainable development of forests, including where appropriate, incentives, should be encouraged. 14. Unilateral measures, incompatible with international obligations or agreements, to restrict and/or ban international trade in timber or other forest products should be removed or avoided, in order to attain long-term sustainable forest management.

Criteria and indicators for sustainable forest management Among the initiatives following up from UNCED were the Helsinki, Montreal and Amazonian (or Tarapoto) processes. For the Helsinki process, work on developing criteria and indicators for SFM began after the 2nd Ministerial Conference on the Protection of Forests in Europe, held in Helsinki in 1993 and attended by 38 European countries, including the Russian Federation, with observers from a number of other countries and NGOs. The Montreal process, started in the same year, involved 12 temperate and boreal countries of the northern and southern hemispheres that were not, with the exception of the Russian Federation, already included in the Helsinki process: Argentina, Australia, Canada, Chile, China, Japan, Mexico, New Zealand, Russian Federation, South Korea, Uruguay and the USA. The Amazonian process emerged from a meeting in Tarapoto, Peru in 1995, attended by representatives from Bolivia, Brazil, Colombia, Peru, Surinam and Venezuela, with observers from international organisations. In addition, work was carried out by ITTO, both before and after UNCED, to develop guidelines for the sustainable management of natural tropical forests, guidelines for the establishment and sustainable management of planted tropical forests, guidelines on the conservation of biological diversity in tropical production forests, and the definition (given above), criteria and examples of indicators for testing and demonstrating SFM. There were 5 criteria and 27 example indicators prepared for use at the national level, and 6 criteria and 23 example indicators for the forest management unit level. Finally, a UNEP/FAO initiative resulted in proposals for C&I for sustainable management in sub-Saharan, dry-zone countries of Africa, with the intention to extend them to other dry-zone regions. Between them, the various initiatives cover the majority of countries in the world. The outputs from these processes included sets of criteria and indica241

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tors for SFM: 6 criteria and 20 quantitative indicators from the Helsinki process; 7 criteria and 67 quantitative and qualitative indicators from the Montreal process; 12 criteria and 76 quantitative and qualitative criteria from the Amazonian process; 11 criteria and 50 example indicators from the ITTO process; and 7 criteria and 47 indicators from the UNEP/FAO process. As an example, the criteria adopted for the Helsinki process were as follows: 1 2 3 4 5 6

Maintenance and appropriate enhancement of forest resources and their contribution to global carbon cycles. Maintenance of forest ecosystem health and vitality. Maintenance and encouragement of productive functions of forests (wood and non-wood). Maintenance, conservation and appropriate enhancement of biological diversity in forest ecosystems. Maintenance and appropriate enhancement of protective functions in forest management (notably soil and water). Maintenance of other socio-economic functions and conditions.

There were more similarities than divergences in the C&I of the different processes, but probably enough of the latter to make it doubtful whether it would be possible or worthwhile to attempt to bring them together into a global set of C&I. Among the uses to which they may be put, one is of particular relevance here, namely to clarify issues related to international trade in products from sustainably managed forests, including timber certification. It is this aspect which is considered in the following section.

Certification and labelling Benefits of certification Forest certification is the process by which forest owners voluntarily submit their forests to inspection by an independent certification body to determine whether the management meets clearly defined standards or criteria, particularly with regard to SFM. It may also include certification of wood products along the chain-of-custody from the forest to the point of sale to the ultimate consumer if it is the intention to sell the product as having been certified. The consumer is thereby able to identify the product as having come from forests managed according to certain standards and processed also according to certain standards. In practice, this means that the consumer is given the assurance that the forest of origin is being managed according to the principles of sustainable management and that the wood has been processed in such a way as to minimise possible negative environmental and 242

TRADE AND THE ENVIRONMENT

social impacts. Two of the principal objectives of certification are stated to be: 1

To improve the environmental, social and economic quality of forest management. 2 To ensure market access for certified products, particularly in markets with high sensitivity to environmental concerns. Further objectives that have been claimed for certification include improved control of logging operations and the stopping of illegal cutting; higher recovery of royalties and taxes; increased transfer of funds to forest management; internalisation of environmental costs in wood product prices; encouragement for investment in wood-processing industries; improved productivity and cost-savings in the production chain from forest to end-user; and improved transparency in forest management and trade (Elliott 1999).

Initiatives for certification The concept of certification may appear fairly straightforward. Initiatives to introduce it have shown that its application is complex and often surrounded by controversy. This and the numerous meetings and large volume of literature generated on the topic during the 1990s testify both to the importance attached to the issues involved and to the sensitivities involved.As FAO (1997) put it: ‘Certification and the associated issue of labelling is one of the most topical and controversial subjects in forestry at the present time. Certification seeks to link trade in forest products, particularly international trade, to the sustainable management of the forest resource, enabling those who so wish to purchase products coming from sustainably managed forests.’ Demand for certification arose in the late 1980s from the apparently limited progress of the Tropical Forestry Action Programme (TFAP), of which FAO was the lead agency and the World Bank and the United Nations Environment Programme co-sponsors, and of the ITTO’s activities, in reducing the rate of tropical deforestation. An early initiative was the establishment of the Forest Stewardship Council (FSC) in 1993 as an NGO, whose approach was to audit forests on the basis of ten principles and criteria. The principles are as follows: 1 2 3 4 5 6

Compliance with laws and FSC principles. Tenure and use rights and responsibilities. Indigenous people’s rights. Community relations and workers’ rights. Benefits from the forest. Environmental impact. 243

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7 Management plan. 8 Monitoring and assessment. 9 Maintenance of high conservation value of forests. 10 Plantations. FSC’s international labelling scheme for wood products provides a guarantee that the product comes from a well-managed forest (note that the FSC preferred the term ‘well-managed’ to ‘sustainably managed’). All wood products carrying the FSC logo have been independently certified as coming from forests that meet the FSC Principles and Criteria of Forest Stewardship, which ensure that consistent performance-based standards are used in evaluating forest management practices through strict chain-of-custody monitoring. The forest inspections are carried out by a number of FSC accredited certification bodies, which themselves are evaluated and monitored to ensure their competence and credibility. By mid-1999 a reported 16.2 million ha of forests had been certified by FSC, the largest area being in Sweden, where the large wood-processing industries have chosen certification as a strategic direction. The ISO 14001 EMS (Environmental Management System) requires an audit of forest management systems against the specifications of this standard. Since it was not sector-specific, a working group led by New Zealand developed ISO 14061 to assist companies in applying ISO14001 to forest management operations. A number of large wood industries in the USA and Finland have registered to ISO 14001 or are pursuing registration, in some cases registering their processing facilities before their forest operations. In Finland companies have also been registering the procurement of imported wood raw material, which as seen earlier is imported in large quantities into Finland (Hansen, Forsyth and Juslin 1999). Another international initiative has been the creation of the PanEuropean Forest Certification scheme (PEFC), seen by many forest owners, especially small-scale owners, as a viable alternative to FSC by providing a pan-European framework for the mutual recognition of national forest certification schemes. It is based on the six criteria, mentioned above, developed in the Helsinki process and elaborated into Operational Level Guidelines at the 3rd Ministerial Conference on the Protection of Forest in Europe in Lisbon in 1998. The PEFC process is subject to independent third party auditing. Participating countries or regions may develop their own national certification systems, at the same time adhering to the PEFC criteria for SFM (Hirsch 2000). Among the certification initiatives launched at the national level may be mentioned the Finnish Forest Certification System (FFCS), the Canadian Standards Association (CSA) forest certification scheme, the Sustainable Forestry Initiative (SFI) set up by the American Forest and Paper Association 244

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(AF&PA) and the United Kingdom Woodland Assurance Scheme (UKWAS). Usually the national systems have been based on criteria that have been developed internationally, such as through the Helsinki process or by FSC, although they may show differences resulting from specific national conditions.

Markets for certified wood products Given the intense efforts to establish certification systems, what have been the results in terms of gaining market acceptance for certified wood products (or certified forest products – CFPs)? Unless or until there are separate customs classifications for CFPs, standardised statistical reporting by countries will not exist. Markets have emerged in a number of European countries, notably Germany, the Netherlands and the United Kingdom, but up to now they have been niche markets and, in relation to the total quantity of wood products consumed, the volumes have not been large. Nevertheless, the markets for CFPs seem to be expanding strongly from the present low levels. In the above three countries, as well as in Austria, Belgium and Spain, buyers’ groups have been established, being groups of retail and other companies creating unified demand for CFPs. The demand for them has thus far come mainly from retailers and not from the final consumers (UN-ECE/FAO Forest Products Annual Market Review 1999). There is often a lack of understanding among consumers about SFM or lack of awareness of what it is all about, reflecting probably more a failure of communication than lack of sympathy for environmental conservation (Pajari, Peck and Rametsteiner (eds) 1999). Demand for CFPs appears also to be building up in North America, Australia and New Zealand, but elsewhere little interest has been shown in them up to now. Despite a slow start in developing the markets for CFPs, an increasing number of forest owners and wood-processing industries are committing themselves to certification in the belief that it may help them to gain access to new niche markets, promote their company’s environmental image and policy, gain credibility in communicating with customers, and build strategic marketing networks. Expectation does not seem to be high that customers will be willing to pay large enough premiums to cover the additional expense of certification. As to the potential structural effects on wood products markets, this at present can only be speculation, given the lack of hard information. It has been suggested (Rametsteiner 2000) that the production and trade of CFPs might have the following substitution effects in European markets: • •

No substitution for non-wood materials. No substitution for tropical timber. 245

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• • •

Small substitution of tropical timber through regaining market share from non-wood substitutes. Small substitution of certified for non-certified products. Eastern European producers penetrating niche markets for CFPs in western Europe.

One fear, which was mentioned earlier, is that certification may be detrimental to wood products markets in two ways. Firstly, it may act as a nontariff barrier to trade, thereby either distorting trade flow patterns or reducing the total volume of trade in wood products. Secondly, the publicity given to certification and the reasons for having it, notably the need to protect the forest from unsustainable exploitation, could inhibit buyers from using wood products altogether. There is little evidence, one way or the other, that up to now either of these fears is justified, although as the volume of CFPs coming onto the market increases, the situation in this regard may become more apparent.

Waste and recycling A few definitions ‘Waste’ is perhaps not quite the right word to describe what is covered in this section, although the main emphasis will be given to the environmental problems associated with waste paper and their linkage with international trade in wood products. But also relevant are residues, both those left behind after logging operations, the residues of the industrial processing of wood and post-consumption wood products. The extent to which they are re-used has an important bearing on the environmental friendliness of the forestry and forest industry sector, as well as on the international trade in wood products.

Logging residues Logging residues are the above-ground parts of felled trees that are left behind after the usable parts of the tree, principally the stems, have been taken away, as well as other trees that may have been damaged during the harvesting process. In efficient operations the residues (branches, tops, foliage) may amount to less than 10% of the total volume of the tree, as occurs in many European countries. Often, however, the percentage is very much higher. This may also be the case where it is economic only to remove 246

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the most valuable wood, usually over a certain minimum diameter. Probably the worst cases of logging wastage in the past occurred in operations in natural forests, both in the tropics and temperate and boreal regions, which were being ‘creamed’ for the most valuable species and qualities. Partly as a result of increasing scarcity, partly from public pressure on environmental grounds, the tendency has been to reduce such losses, one result of which has been to harvest a larger volume per hectare and, in the case of tropical forests, a greater number of species, which in turn has been consistent with efforts to increase domestic processing of logs and a higher share of processed wood products in exports.

Industrial wood residues Industrial wood residues consist of such things as bark, sawdust, slabs, edgings and offcuts from sawmilling, peeler cores from veneer-cutting, and shavings and trimmings from secondary and tertiary processing. More correctly they should be called by-products, since virtually all of them can be used, either as raw material for the production of woodpulp and woodbased panels, or for energy, or for other uses, for example in horticulture, animal-raising or gardening. The use or sale of these by-products often makes the difference between profit and loss in a typical primary processing operation. Long gone are the days when burners were a frequent sight at sawmills, especially in North America; they became unacceptable environmentally. The extent to which by-products are used as raw material depends on the ability of the generating industries to supply them in an uncontaminated form, i.e. free of glue, paints, impregnation materials, etc., and in given specification, e.g. chip size, to the user industry. It also depends on the existence of industries capable of using them, often integrated with the generating industries. Bark, sawdust and contaminated by-products will mostly be used for energy generation. Table 9.5 shows the volumes of wood residues (by-products) supplied in Europe in 1990 for use as raw material. The proportion of the total volume generated that is supplied as raw material is far greater in the northern and western parts of Europe than in the eastern and southern countries. Preference for softwood (coniferous) residues is also a reason for the differences between regions. The rate of growth in the use of wood residues as raw material has been appreciably higher than that of virgin fibre, i.e. round pulpwood from the forest. In 1965 the volume of the former in Europe was less than 20 million m3, and had more than doubled to 47 million by 1990. It is estimated that a further 25 million m3 were used in 1990 for energy, and 5 million for other purposes or not used at all (UN-ECE/FAO 1996). 247

THE INTERN ATION AL TIMBER TRADE Table 9.5 Domestic supply of wood residues as industrial raw material in Europe in 1990

Volume (million m3)

Share of residues generated (%)

Finland, Norway, Sweden EU (12 countries)a Austria, Switzerland Eastern Europe South-eastern Europe

18.1 20.9 4.6 2.8 0.4

77 72 90 32 5

TOTAL EUROPE

46.8

62

a

EU – 15 excluding Austria, Finland and Sweden Source: ECE-UN/FAO 1996

Residues from further stages of processing and from post-consumption, which are more likely to be contaminated, are generally more suited for energy generation than as raw material. In some countries, post-consumer wood residues, for example, old buildings, pallets and furniture, constitute a quite important part of the total volume of waste going into landfills and, given the increasing problems relating to the latter and stricter legislation with regard to the disposal of waste, there is a growing incentive to find uses for them.

Waste paper World consumption of paper and paperboard at the end of the twentieth century was running at about 300 million tonnes a year. A proportion of that was unrecoverable, for example tissues, and a further quantity went into long-term storage, for example books. The greater part, maybe about twothirds, however, was potentially recoverable for re-use, either as industrial raw material or for energy or for a number of other uses. Much of it still got thrown out and contributed to the mountains of rubbish dumped on landfills. It has been estimated that paper and paperboard accounts for over 30% of all solid waste generated in industrialised countries (Fig. 9.1). In less developed societies, vegetable matter is the main component in solid waste, but is overtaken by other materials as their economies progress. In response to environmental concern, legislation has been becoming increasingly strict to reduce the volume of waste and encourage recycling of glass, metals and plastics and, above all, paper. The possibilities for doing so are best, that is economically and technically feasible, where the waste is 248

TRADE AND THE ENVIRONMENT Vegetable 25%

Paper 31%

Other 13% Textiles, rubber, leather and wood 5%

Glass 10% Metals 8%

Plastics 8%

9.1 Composition of solid waste in industrialised countries (source: Peck and Descargues 1995).

most concentrated, in other words urban areas. Collection, sorting and recycling requires well-developed infrastructure, political support and willingness to cooperate on the part of the population, not to mention the necessary investment. These have been forthcoming to an increasing extent in the advanced economies which, with certain exceptions, have been leading the way in paper recycling. As a result of the measures taken, the waste paper market has been supply-led and, because it has generally been treated as a marginal product, has been subject to violent price fluctuations. In the developed market regions, as well as China and South Korea, between 40 and 50% of all paper and paperboard used is recovered (Table 9.6). In some countries, the recovery rate is above 50%, which in practice probably means that the full potential for recovery is being approached. In the southern hemisphere regions the recovery rate is much lower, between 20 and 25%, while in the former USSR it is about 33%, which is below the world average of 39% (calculated with 1997 data). The total volumes recovered, as well as the recovery rates, have been rising strongly everywhere over the past few decades. If the estimate given above that two-thirds of all paper and paperboard used is potentially recoverable, the volume of 110 million tonnes actually recovered in 1997 is equivalent to between 55 and 60% of the potentially recoverable volume worldwide. The extent to which waste paper provides the furnish for paper-making varies considerably, both according to the grade of paper and paperboard and to the country and industry using it. For some grades, little or no waste paper is used, for example tissues and fine papers; others can be made wholly or largely from waste paper, including certain packaging grades, 249

THE INTERN ATION AL TIMBER TRADE Table 9.6

Recovery and utilisation of waste paper by region, 1997

WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Recoverya (million mt)

As per cent of paper & paperboard consumption (%)

Utilisation as raw material (million mt)

As per cent of fibre furnish for paper & paperboard (%)

110.5 35.6 33.2 1.1 31.2 4.5 0.9 3.9

38.6 41.6 42.0 32.5 40.5 22.6 22.3 22.9

111.8 30.5 32.3 1.1 35.3 6.3 1.0 5.3

38.6 29.3 41.7 27.3 48.4 41.3 31.4 42.2

a

Termed ‘production’ in FAO database Source: FAO database

newsprint and some grades of printing and writing paper. Overall it is calculated that waste paper made up nearly two-fifths of the world total of fibre furnish in 1997 (Table 9.6), while woodpulp accounted for 55% and pulp from other fibres, notably straw, accounted for less than 7%. A large proportion of all other fibre pulp was produced and used in China. Despite that, the share of waste paper in fibre furnish in East Asia was higher, at 48%, than in any other region; the share of woodpulp was the lowest with 30%. In Europe, Other Asia-Pacific and Latin America the share of waste paper was over 40%. It was around 30% in North America, where woodpulp is produced and used on a massive scale, as well as the former USSR and Africa. The impact of the growing use of waste paper on international trade has stemmed mainly from the fact that a large proportion of it is generated in the main consumption centres of the USA, western Europe and Japan. These countries have developed the infrastructure and the capacity to collect and utilise important shares of their recoverable waste paper, pushed in most cases by legislation to reduce waste. The result has been some import-substitution of some grades of paper and paperboard and, even more markedly, growth of their exports. It has been these exports which have allowed several of the major importing countries of wood products of western Europe and East Asia to figure also among the ‘Top 20’ exporting countries. Among the net importing countries of wood products shown in Table 9.7, the ratio of utilisation of waste paper to production of paper and paperboard in 1997 was mostly between 45 and 50%, and was over 70% in 250

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the Netherlands and South Korea, compared with a world average of 39%. Only in the USA among the major importing countries was it below the average, but the USA was notable for the very large volume of exports of waste paper, 6.8 million tonnes in 1997 or two-fifths of the world total. Among the net exporters of wood products in Table 9.7, the ratio of waste paper utilisation to paper and paperboard production was between 5% in Finland and 21% in Sweden, with only Austria’s ratio being as high as the world average. Canada, Austria and Sweden were substantial net importers of waste paper. The need for some countries to import waste paper has arisen because of legislation in their export markets of paper and paperboard requiring a certain waste paper percentage. This is the case, for example, for newsprint in some states of the USA; to avoid losing too great a share of the market, Canadian suppliers have been obliged to adapt their fibre furnish to include the required proportion of waste paper. Expansion in the use of waste paper has been strong everywhere in recent decades, and its share in the fibre furnish for paper and paperboard has risen considerably, mainly at the expense of virgin fibre, round pulpwood. This explains why in many countries removals and use of pulpwood have risen more slowly than the output of pulpwood-using products (woodpulp, particle board, etc.), and in managed forests it has resulted in marketing problems for small-sized wood and backlogs in harvesting of thinnings. The possibilities have been explored to adapt silvicultural systems to reduce the proportion of small-sized wood in the wood harvest, but this is a longterm solution.The immediate problem is to find markets for small-sized wood at a price which makes it worthwhile to harvest it. Waste paper may be recycled a number of times, but each time there is a loss of strength in the fibres. Accordingly, it is necessary to incorporate virgin fibres on a continuing basis into the fibre furnish, either from roundwood or from industrial wood residues. At the same time, there will be no let-up in the pressure to reduce waste and to recycle as much of it as possible for environmental reasons. Unless a significantly greater proportion of waste paper is used in the future for other purposes, for instance energy, it will continue to have an important influence on the markets for wood and wood products, including international trade.

Energy and climate change Energy supply and use In the mid-nineteenth century, about three-quarters of all energy used in the world came from biotic sources, mainly wood, with the remainder from 251

252 614 32 42 553 1700 21

Net exporters of wood products Austria 1 028 Finland 607 Norway 432 Sweden 1 652 Canada 2 694 Brazil 1 287

Source: FAO database

998 1021 876 1114 243 79 693 3034 362 1452 93 49 217 193 690 3

750 3057 53 1252 216 490 6807 444 312 –

Exports

(1000 mt)

Imports

Net importers of wood products France 4 219 Germany 9 457 Italy 3 080 Netherlands 2 439 Switzerland 1 003 United Kingdom 3 675 USA 32 862 China 11 867 Japan 14 841 South Korea 4 531

Recovery

Waste paper

1 549 590 257 2 012 3 704 1 305

4 467 7 421 3 903 2 301 1 030 3 264 26 748 14 457 14 891 5 983

Utilisation

3 816 12 149 2 129 9 756 18 969 6 475

9 143 15 930 8 032 3 159 1 583 6 479 76 452 31 483 31 014 8 334

2 905 10 161 1 937 8 210 14 834 1 043

3 460 7 661 2 006 2 844 1 237 1 473 11 940 1 051 1 149 1 900

Exports

(1000 mt)

Production

Paper and paperboard

40.6 4.9 12.1 20.6 19.5 20.2

48.9 46.6 48.6 72.8 65.1 50.4 35.0 45.5 49.4 71.8

Ratio of waste paper utilisation to paper and paperboard production (%)

Table 9.7 The waste paper market in selected countries and its relationship with paper and paperboard production and exports in 1997

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mineral sources, mainly coal. Towards the end of the twentieth century the pattern had totally changed with mineral sources accounting for around 80%, biotic sources down to about 15% and the remainder from other sources such as nuclear power and hydropower (Peck and Descargues 1997). The tremendous growth in the use of mineral fuels, i.e. fossil fuels, was accompanied by the accumulation of carbon dioxide (CO2) and other gases of combustion in the atmosphere. It is estimated that the concentration of CO2 in the atmosphere rose from 275 parts per million (ppm) in the mid-nineteenth century to 333 ppm in 1985, and some forecasts expect it to reach 550 ppm by the mid-twenty-first century (op. cit.). Many scientists believe that the increased concentration of the so-called greenhouse gases (GHGs) is leading to changes in the global climate, including a rise in average temperatures, which could have major environmental consequences, although there is uncertainty about the time link between changes in greenhouse gas concentrations and temperature changes. This, briefly, is the background to the adoption at UNCED in 1992 of the Framework Convention on Climate Change (FCCC), in which the signatory countries supported measures to bring the causes of climate change under control, notably by slowing down or arresting the net increase in emissions of GHGs. This could be achieved in various ways, for instance by increasing efficiency in the use and conservation of energy, increasing the use of ‘alternative’ and cleaner (in the sense of not emitting noxious gases) fuels than fossil fuels, and taking measures to re-absorb CO2 from the atmosphere. Among the alternative fuels are nuclear power, itself the subject of considerable environmental concern after the Chernobyl disaster and other nuclear accidents, hydropower, solar and wind energy, and biomass. There is also the question of renewability and sustainability of energy sources. Fossil fuels are non-renewable, although coal reserves are enough for another 100 years or more but those of oil and natural gas probably much less than that at present rates of depletion. Fossil fuels will eventually have to be phased out and in the long term might be replaced by such sources as fuel cells based on hydrogen, and nuclear fusion (as distinct from fission). But for the sake of continuity and security of supply, other alternatives will need to be developed. In this scenario, wood could be called on to play a greater role than it has in the recent past. It is estimated that in 1995 woodfuels’ share of total energy use worldwide was 7% (Table 9.8). Of the world total volume of energy wood production of 2.1 billion m3 EQ, 80% was used in the developing countries, almost all in the form of fuelwood and charcoal in households for cooking and heating. The developed countries used 20% of the total, partly for domestic uses, including so-called ‘intermediate uses’ such as district heating and hot water, and partly by industry, using wood residues and pulping black liquor for generating steam and electric power. 253

THE INTERN ATION AL TIMBER TRADE Table 9.8 in 1995

Composition of woodfuels and their share in total energy use by region

Woodfuels Fuelwood

Charcoal

Black liquor

Woodfuels’ share in total energy use (%)

(million m3 EQ) Total, developing countries Asia, developing Oceania, developing Africa Latin America

1533 859 6 445 223

131 25 – 72 34

34 12 – 3 19

15 12 52 35 12

Total, developed countries North America Europe Former USSR Australia, Japan, New Zealand

187 96 56 32 3

6 4 2 – –

228 146 51 8 23

2 3 3 1 1

1720

137

262

7

WORLD Source: FAO 1997

The figures in Table 9.8 apparently do not include industrial wood residues, which may add about as much again to energy supply as black liquors. Furthermore, data on fuelwood is notoriously difficult to collect and unreliable, and the figures in the table may be either higher or lower than the reality. In Europe, for example, fuelwood use in 1990, including estimates for ‘non-inventoried’ supplies which do not enter the commercial stream or are used directly by the forest owner, amounted to 92 million m3 (compared with the 56 million m3 in 1995 shown in Table 9.8); and Europe’s use of industrial wood residues, including ‘recovered wood’, which is wood used for energy after it has carried out its initialfunction, such as pallets and wooden packaging, as well as building demolition waste, amounted to 67 million m3 (no volume given in Table 9.8). The details are shown in Table 9.9 (Europe in this instance includes the Baltic states). The total of 208 million m3 of wood used for energy in Europe in 1990, which is still short of the absolute total as it does not include some quantities of waste paper used for that purpose, was equivalent to 47% of the volume of European removals in that year. This is mentioned just to give an indication that, even in a region where the share of wood in total energy use is low (about 3%), energy is nevertheless an important end-use component from the wood supply point of view.

254

TRADE AND THE ENVIRONMENT Table 9.9

Energy from wood in Europe in 1990 Volume (million m3)

Per cent (%)

92 24 17 13 13 49

44 12 8 6 6 24

208

100

Fuelwood Primary processing residues Secondary processing residues Pulp & paper residues (wood & bark) Recovered wood products Pulping liquors (wood equivalent) TOTAL WOOD FOR ENERGY Source: UN-ECE/FAO 1999

Climate change The burning of wood for energy production is generally considered to be neutral so far as its impact on the environment is concerned, because the main emission is CO2, which is taken back into biomass from the atmosphere in the process of photosynthesis. Furthermore, wood comes from a renewable resource. On the other hand, the clearance of forest to make way for other land uses, which involves not only the loss of vegetation cover but also of the organic matter in the soil is an important cause of the accumulation of GHGs in the atmosphere. It has been estimated that tropical deforestation contributes 14% of the addition of greenhouse gases, the other main contributors being the burning of fossil fuels for energy (49%), industrial activities (24%) and agriculture, mainly methane (CH4), from animals (Peck and Descargues 1997). For CO2 alone, however, deforestation is reckoned to account for 20%, fossil fuels for 70% and industry and agriculture together for 10% (Fig. 9.2). By far the largest share of fossil fuel use is still taken by the developed countries, but the developing countries, with their rising shares of world population, expanding industrial activity and use of motorised transport, will raise their consumption of fossil fuels and emissions of greenhouse gases in both absolute and relative terms. The contribution by sector to the addition of carbon dioxide to the atmosphere is shown in Fig. 9.2. Forest biomass and forest soil account for about two-thirds of all terrestrial carbon. A possible global climate change will consequently influence and be influenced by what is happening to the forests (Kauppi and Sohlberg in Palo and Uusivuori (eds) 1999). The Intergovernmental Panel on Climate Change (IPCC), created to follow up the FCCC, reached a number of conclusions on the possible effects on forests:

255

THE INTERN ATION AL TIMBER TRADE Agriculture 6% Industry 4%

Deforestation 20%

Energy 70%

9.2 Contribution by sector to the addition of carbon dioxide to the atmosphere (source: UN-ECE/FAO 1999).

• • •

Even a relatively small change in climate can cause changes in the growth and regeneration capacity of trees. Slow-growing species are more vulnerable to changes in climate than fastgrowing and more ‘mobile’ species. Stands in extreme conditions of water availability, that is, stands which are prone to drought or water-logging, are particularly susceptible to changes in climate, at least if the direction of change pushes the environment further towards those species’ particular tolerance limits.

It is also thought that the greatest impacts of possible greenhouse warming on forests are likely to occur in the boreal region, because warming is expected to be especially noticeable at high latitudes. Northern tree lines are likely to advance slowly northwards into areas which are currently covered by tundra vegetation. In the tropics, however, human-induced deforestation will be much more important than changes in climate and atmospheric chemistry in affecting the availability of wood products, at least until the middle of the twenty-first century. Studies prepared for the IPCC distinguish in order of magnitude the effects that forestry measures can have on the carbon balance: 1

Conservation management, being actions that result in the safeguard of existing carbon reservoirs in forests. 2 Storage management, or actions resulting in an increase of the carbon reservoir in forests. 256

TRADE AND THE ENVIRONMENT

3

Substitution management, or actions in the forest and wood sector which, in one way or another, result in compensating fossil fuel use with increased use of wood-based materials.

It is estimated that the global potential of CO2 mitigation measures in forestry could be in the order of 15–20% of the expected human-induced CO2 emission during the period from 1995 to 2050. This includes afforestation and reforestation as well as a reduction in deforestation. In the longer term the potential for increased use of energy based on forest biomass is seen as probably the most promising climate mitigation option for forestry. The third Conference of the Parties to the FCCC, held in Kyoto, Japan in December 1997, adopted the Kyoto Protocol, which laid down further steps to implement the FCCC. The Kyoto Protocol makes explicit reference to land use change and forestry under several of its articles, which is important if the market is called upon to play a role in the sequestration of carbon in the forest sector. However, to be effective, the Protocol will need to be strengthened in certain respects, for example in recognising the positive role of the intensification of forest management other than planting in carbon sequestration as well as improving the environment, the role of long-term storage of carbon in wood products in, for example, construction, and the use of wood energy as a substitute for fossil fuels (Solberg 1998). The issue of the role of forests in carbon sequestration proved, however, to be one of the major sticking points which caused the Kyoto follow-up conference in The Hague in November 2000 to be adjourned until 2001 for further deliberation and negotiation. Among the measures being introduced or considered, which could have an impact on the market for wood, are carbon or CO2 taxes and a number of carbon offset schemes, whereby emission reduction units (ERUs) could be traded between Parties to the Kyoto Protocol, for example through the Clean Development Mechanism (CDM). Changes in the regulations on the burning of fossil fuels as well as carbon taxes could have a positive impact on the production and use of wood products, given that they require considerably less energy input than most competing materials, such as steel, aluminium, plastics and glass. This is in addition to the fact that wood products come from a renewable resource, which is not the case for the other materials. Any change in the competitive position of wood products in the market would, in addition, be reflected in international trade. The latter, however, might also be affected if the cost of fossil fuels should rise as a result of regulations or taxes, given that transportation, whether maritime, road or rail, is run on these fuels and that many wood products have a fairly low valueto-weight ratio. The impact could be to favour trade in higher unit value products at the expense of lower value ones, such as wood raw material, 257

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and also to favour domestically produced substances at the expense of imports. Finally, the possible impact of climate change, if it materialises, could be to stimulate forest growth, thereby in the long term increasing the availability of wood, altering the supply–demand balance and lowering prices. A number of ecological-climate models have reached similar results showing, for example, that the global wood supply would expand and welfare from wood would increase. Greater wood availability would also allow its increased use as a source of energy. This outlook is for the very long term and highly speculative, and many other developments could swing the market in other directions. Nonetheless, the possibility exists that forestry and wood may play quite an important role during the transition period over the coming century or so to the post-fossil fuel era.

258

CHAPTER

10 Past, present and future

The need for a long-term outlook

B

ecause the life cycle of trees, apart from the fast-growing plantation species, is so long, those concerned with the forest and forest industries sector take a particular interest in the long-term outlook for the supply and demand of wood and its products. Once a forest is established, there is a limit to how much can be done through silvicultural operations to change the final output. Therefore, in the case of a managed forest reaching the end of its rotation, the manager has to accept the results of the decisions made by his predecessors of one or several generations back about the species to be grown, spacing, thinning regimes and so on. When wood production is expected to remain the main function of the forest, these decisions will have been taken on the basis of assumptions about what crop will give the best returns many years hence. This is difficult enough when only one type of output is being considered, for instance wood. It becomes immensely more difficult when other functions, including environmental and social ones, need to be factored in. The needs for reliable guidance about the future among those concerned with industries and markets are different, in terms of timescale, to those of forest managers. The former have to make investments in equipment, to be paid off in a certain period of time, say five or ten years; after 259

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that, new investment decisions will be necessary, taking into account developments in technology, and changes in products and market demand. For them, projections of supply and demand of wood products of more than, say, ten years into the future are probably of less interest. To assist policy makers and managers, efforts have been made by researchers and others over the past century or so to provide indications of possible future developments in the forest and forest products sector at the national, regional or global level. Some of the more recent forecasts are presented in this chapter. But first, this is the opportune point at which to summarise some of the highlights from the previous chapters by way of introduction to the discussion on the outlook.

Highlights from Chapters 1 to 9 Historical perspective Hundreds of millions of years before the appearance of man, there evolved the great forests of giant clubmosses and fern-like plants of the Carboniferous period, the raw material of fossil fuels. These gave way to coniferous plants and later to broadleaved species. Forests became the predominant terrestrial ecosystem of the planet, covering possibly 80% of the land surface other than the poles. Man appeared a mere 100 000 years ago or so, and until perhaps 8000 years ago followed a nomadic existence. Then he began to lead a more settled life of growing crops and herding cattle. As populations rose, they needed more land for agriculture: thus began the long decline in the area of forest. As civilisation progressed, demand for wood expanded from its use for heating, cooking and shelter to other uses, notably for copper- and ironmaking, construction and ship-building. Forests in the Mediterranean Basin and large parts of continental Asia were over-exploited and began to disappear. This trend spread to other regions, western and central Europe, later to North America and western Russia, and most recently to tropical Africa, Asia and Latin America. Reports of trade in wood products date from several millennia BC, for example from the eastern Mediterranean to Egypt. Later, Rome imported wood from various parts of its empire, including North Africa and the Iberian peninsula. In northern Europe, wood was exported from Norway to England from the thirteenth century onwards and later from Norway and the south Baltic ports to the Netherlands and other western European countries. Tar and pitch were also important trading commodities, needed for building and maintaining ships. By the seventeenth century, the acquisition of wood began to shift northwards and eastwards, to Riga and Sweden. 260

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Exploration and colonisation by Europeans down the west coast of Africa, into the Indian Ocean and across the Atlantic to the New World, brought the discovery of new and exotic woods for the European market and the clearing of forests to make way for cash crops, especially sugar. Islands such as Barbados and Madeira were denuded to such an extent that fuelwood had to be brought from New England for sugar-processing. New England’s dense forests were largely cleared for agriculture by the colonists and also provided a source for masts and spars for the British navy, needed to maintain its maritime rivalry with the Netherlands and France. With the establishment of settlements on the west coast of North America early in the nineteenth century, opportunities arose for exports to destinations around the Pacific Basin, including Australia, China, Japan, Peru and Mexico. The opening of the Panama Canal in 1914 greatly improved the access of northwestern producers to the east coast of the USA and Europe. The industrial revolution was accompanied by a marked expansion of trade in wood products in the nineteenth century, with Britain emerging as the leading importer. Another major development in that century was the invention of mechanised paper-making, the key to which was the use of wood in place of rags and other fibres. Economic growth and trade in the first half of the twentieth century were severely disrupted by the First World War, then the Great Depression and again by the Second World War. Trade in wood products in that period was largely confined to the industrialised countries. In the second half of the century, economic expansion and growth in trade in wood products were more or less continuous apart from some cyclical fluctuations. While the major part of trade continued to be between industrialised countries, the share taken by developing countries gradually increased.

Global forest and wood resources The present area of forests in the world, not including other wooded land, is about 3.6 billion ha or 28% of the land area. Latin America and the former USSR account for roughly one-quarter each, and Africa, Other Asia-Pacific and North America for between one-seventh and one-eighth each; Europe and East Asia have less than one-twentieth each. There are three broad categories of forest: tropical, consisting largely of broadleaved species; boreal, predominantly coniferous and lying mostly to the north of latitude 60° N; and temperate, in between. Most of the tropical forests and a large part of the boreal forests are natural, that is undisturbed by man; in temperate regions, they are mainly semi-natural and under some form of management. Plantations make up only a small but increasing part of the forest area. Deforestation to make way for other land uses took place over millen261

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nia in the temperate regions, but the area of forest in those regions has now stabilised and is even increasing slowly. Deforestation and forest degradation has been continuing in the tropical regions, with a reported loss of about 13 million ha a year in the early 1990s. The volume of wood removed annually from the world’s forests in the latter part of the 1990s was about 3.5 million m3, of which roughly half consisted of fuelwood, mainly produced in the developing countries, and half industrial wood, the major part in the industrialised countries. North America and Europe have a much larger share of world removals of industrial wood (39 and 19% respectively) than of the area of forest (13 and 5% respectively). The former USSR, with 24% of the area, accounted for only 7% of removals in the mid-1990s. In virtually all temperate and boreal countries, the volume of wood taken from the forest is less than the increment. The physical potential to raise fellings is, however, higher than the realistic one, taking into account economic and environmental constraints. The low volume of fellings per hectare in tropical regions could be increased with more intensive management and without jeopardising principles of sustainable forest management (SFM). The main effort in these regions is likely, however, to be to conserve as much of the remaining natural forests as possible, rather than to increase wood production in them. Fast-growing plantations could provide an increasing share of industrial wood production.

Production and consumption of wood products Wood is not only a renewable material; it is also a highly versatile one, capable of being transformed in different ways into a variety of products. Among the key properties of wood, which from the point of view of its utilisation may be positive or negative or both at the same time, include: its strength to weight ratio – generally favourable compared with other materials; inflammability – good as a source of energy, can be a hazard in construction; durability – varies from species to species; biodegradability; decorative value – also varies from species to species; workability – a material that is easy to cut, saw, drill or turn; energy efficiency – less energy needed for its transformation and utilisation than most competing materials; versatility – can be used in unprocessed and processed forms for a myriad purposes. Wood products are grouped under the following headings: wood raw material; sawnwood; wood-based panels; woodpulp; paper and paperboard; recovered paper (waste paper); and added value products (wood manufactures). Of the processed products, world production of sawnwood in 1997 amounted to 431 million m3, wood-based panels 157 million m3, woodpulp 162 million tonnes, and paper and paperboard 289 million tonnes. For all 262

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these product groups, North America is the leading producer with shares ranging from 33% for wood-based panels to 53% for woodpulp. Europe is in second position, followed by East Asia and Other Asia-Pacific. Production in the former USSR fell steeply in the first half of the 1990s. Between 1970 and 1990 world output and consumption of all categories of wood products increased, the highest rates of growth being for particle board and printing and writing paper, the slowest for sawn softwood and hardwood. Production in 1998 was higher than in 1990 for all products other than sawnwood and plywood, the fall in sawnwood being principally due to the collapse of output in the former USSR, which had been the leading world producer up to 1975. Separating total production into that destined for countries’ domestic use and that for export, for each of the main product groups production for domestic use accounts for between 70 and 80% of total production. Put another way, exports make up between 20 and 30% of total production, and imports for the same proportion of consumption. International trade is consequently an essential element in achieving a balance between supply and demand of all wood products. In North America, production in 1997 exceeded consumption of all products except plywood. Production in East Asia was in all cases less than consumption. For the other regional groups, self-sufficiency varied according to the product. Europe was more than selfsufficient in sawn softwood, particle board and paper and paperboard, but deficient in the other products. Other Asia-Pacific was more than self-sufficient in plywood and sawn hardwood, but deficient in the others. Africa was self-sufficient only in sawn hardwood; Latin America, on the other hand, was self-sufficient in all products except paper and paperboard, and the former USSR was more than self-sufficient in all products by a wide margin. Up-to-date information about end-uses of wood products is hard to come by. Leaving aside the use of wood for energy, which in volume terms is easily the largest user, the main end-use sectors of wood products are construction, packaging, furniture, cultural or graphic uses, and miscellaneous. Construction is the predominant end-use for sawnwood and wood-based panels; packaging and cultural or graphic uses for paper and paperboard. Altogether, it is estimated that construction, packaging and cultural and graphic uses account for about three-quarters of all wood used, when wood for energy is excluded from the calculation.

The place of wood industries and wood products in the global economy Statistics showing the share of the wood-processing industries in the overall economy are not available from all countries. Those for OECD countries, 263

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which include furniture with wood and wood products, and printing and publishing with paper and paper products, show that the wood-processing sector accounts for between 2 and 3% of Gross Domestic Product in most countries. It is appreciably higher, however, in such major exporting countries as Finland and Sweden. The whole of manufacturing, however, accounts for 20% or less of total GDP, and the share of wood-processing in total manufacturing in the countries used as examples ranges from 14% in the Netherlands to 23% in Sweden among the industrialised countries, but only 7% in Mexico. In Sweden, wood-processing holds second place among the manufacturing sectors, in the USA third place and in the Netherlands fourth place. The value of world trade in the wood products covered by FAO statistics amounted to US$ 150 billion in 1995, which was equivalent to 3% of total commodity trade. If value added wood products (manufactures of wood and paper and paperboard) were included, the share would rise to perhaps around 5%. In several countries, including Finland, Canada, Sweden and Indonesia, wood products (excluding manufactures) account for an important part of total exports – 30% in the case of Finland. The range is not so marked for imports: among the leading importing countries, Japan’s share is the highest with nearly 6% of total imports in 1995. In brief, the wood-processing industries and wood products hold a quite important place in the national economies and international trade of many countries, and play a key role in a number of them that are major exporters.

Overview of world trade in wood products In 1997, world exports of wood products, including waste (recovered) paper but excluding the manufactures of wood and paper and cork products, amounted to US$136 billion and imports to US$145 billion. The difference is partly explained by the fact that exports are reported on an fob basis and imports on a cif basis. In value terms, paper and paperboard accounted for nearly half the total, followed by sawnwood with about one-fifth. When expressed in terms of volume (cubic metres equivalent volume of wood in the rough – m3 EQ), paper and paperboard still held the biggest share with one-third of the total but much less than their share of value. Woodpulp and sawnwood each accounted for between 20 and 25%. Two country groups, Europe and North America, accounted for threequarters of total exports; and three groups, Europe, East Asia and North America, for 85% of imports. Virtually all countries are importers of wood products and the majority of them are exporters, but a relatively small number account for the bulk of trade. In 1997, the ‘Top 20’ exporting countries accounted for 86% of the world total, and the leading 5 (Canada, 264

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USA, Germany, Finland and Sweden) for more than half. Likewise, the ‘Top 20’ importing countries held 83% of world imports, and the leading 5 (USA, Japan, China, Germany and the United Kingdom) for more than half. Between 1970 and 1995, the fastest growth in trade was of waste paper, followed by wood-based panels and paper and paperboard. The slowest was of wood raw material (despite a considerable increase in chips) and sawnwood. Trade of all products grew faster than production and consumption. Exports of wood products in total expanded faster than the world average in Latin America and East Asia, although in both regions the values were relatively small at the start of the period. Imports grew faster than the world average in North America and East Asia, raising their shares in 1995 to 17 and 23% respectively. Europe’s imports rose somewhat more slowly than the average, but it still accounted for 47% of world imports in 1995. Comprehensive data are not available on the trade in added value (or secondary processed) wood products. Statistics for the countries of the OECD and the EU, however, which account for the bulk of world trade in these products, show that they play an important role in trade. The value of OECD countries’ imports of added value products in 1996 was US$28 billion, of which wooden furniture accounted for two-thirds and builders’ woodwork for one-sixth. Nearly half of the EU’s (15 countries’) exports in 1997 of wood products, primary processed and added value combined but excluding paper and paperboard and their products, consisted of added value products, and their share of its imports was over two-fifths. For a different grouping of countries it is estimated that the added value products of paper and paperboard accounted for over one-quarter of the total value of exports of paper and paperboard and their manufactures in 1995 and a higher proportion of imports. A rough calculation suggests that by including the manufactures of wood and paper, the total value of world trade in wood products would be about 50% higher than that for wood raw material and primary processed products alone. Furthermore, the share of added value products is increasing.

Trade flow patterns and trends In 1997, the largest exporting regions of wood products were Europe, North America and Other Asia-Pacific with 85% of the world total. Europe, East Asia and North America accounted for 85% of world imports. The fact that Europe and North America figure in the top three exporting and importing regions reflects the importance of their intra-regional trade flows, which make up more than half the world total. If East Asia and Other Asia-Pacific were combined in one region, the major part of that region’s trade would also be intraregional. At the world level about three-fifths of total trade in wood products 265

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is intra-regional and two-fifths is inter-regional. About four-fifths of Europe’s and East Asia’s exports remain within their respective regions, and a half of North America’s. In contrast, most of the exports of the former USSR, Africa and Latin America go to other regions. North America and Europe obtain 80% or more of their imports from within their respective regions, while East Asia imports 80% from outside the region, and Other Asia-Pacific, Africa and Latin America, despite being relatively well-endowed with forests, also obtain the bulk of their imports from other regions. It is difficult to summarise international trade flows in wood products, which vary from product to product. Among the more important flows in 1997 were the following: •

Coniferous industrial roundwood: intra-Europe; North America to East Asia; former USSR to East Asia and Europe; Other Asia-Pacific (New Zealand) to East Asia. • Non-coniferous industrial roundwood: intra-Europe; former USSR to Europe (Nordic countries); Other Asia-Pacific to East Asia; Africa to Europe and East Asia. • Wood chips: Other Asia-Pacific (Australia) to East Asia; North America to East Asia; Latin America to East Asia. • Sawn softwood: intra-North America; intra-Europe; North America to East Asia; former USSR to Europe. • Sawn hardwood: intra-Europe; intra-Other Asia-Pacific; Other Asia-Pacific to East Asia; intra-North America. • Plywood: other East Asia (Indonesia, Malaysia) to East Asia; intra-Other Asia-Pacific; intra-Europe. • Particle board (including OSB): intra-Europe; intra-North America. • Compressed fibreboard (hardboard and MDF): intra-Europe. • Bleached sulphate woodpulp: intra-Europe; intra-North America; North America to Europe and East Asia; Latin America to Europe and East Asia. • Waste (recovered) paper: intra-Europe; North America to Asia; intraNorth America. • Newsprint: intra-North America; intra-Europe; North America to East Asia. • Printing and writing paper; intra-Europe; intra-North America; Europe to Other Asia-Pacific; intra-East Asia. • Other paper and paperboard: intra-Europe; intra-East Asia; intra-North America; North America to East Asia and Europe. Important changes have occurred in the pattern of trade flows over the past two or three decades, resulting from the opening up of new forest areas, including plantations, the over-exploitation of others, the building of new wood-processing capacities, as well as changes in import demand. For wood products as a whole, the value of world trade increased by 186% between 266

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1983 and 1997. Trade flows that expanded faster than that were intra-Europe and intra-Asia-Pacific (i.e. East Asia and Other Asia-Pacific regions combined). Those that expanded more slowly than the world average included intraNorth America and North American exports to Asia-Pacific and Europe. Trends are, however, dependent on the varying conditions affecting individual wood products. For example, the decline in North American exports of coniferous industrial roundwood to East Asia was the result of logging restrictions, which was offset by increased East Asian imports from the former USSR, New Zealand and Chile. Another example is the decline of non-coniferous industrial roundwood from some traditional West African and South-East Asian countries (Côte d’Ivoire, Philippines, Indonesia), as a result of resource depletion or export bans, partly made good by supplies from other exporters, notably Papua New Guinea. Plywood is another product which has experienced major shifts in trade flows affecting more the exporting than the importing countries. Whereas in the 1970s, South Korea and the province of Taiwan, both in-transit processors, were the leading exporters, they had been replaced by the 1990s by Indonesia and Malaysia. The development of new products has resulted in new trade flows, for example the growth of Canadian exports of OSB to the USA, and of intraEuropean trade in MDF. The establishment of plantations and woodprocessing facilities, for instance in Brazil, Chile, New Zealand, Indonesia and Ireland, has allowed new trade flows to emerge in such products as woodpulp, sawn softwood, chips and wood-based panels. Economic expansion and the opening up of hitherto restricted markets has resulted in marked import growth in some countries, notably into China from suppliers around the Pacific Rim.

The major players Between the forest and the ultimate consumer there may be many stages in handling, transforming, transporting and utilising the tree. Between the stages there may be changes in ownership of the wood raw material or product. The number of stages varies according to the degree of sophistication of the final product and the distance between the forest and the consumer. The flow path may or may not involve international trade. The growth in international trade in wood products in past decades has been made possible to a considerable extent by advances in transport and handling technology, such as packaging, containerisation and roll-on roll-off ferries. There has also been the development of specialised carriers such as container ships and bulk carriers for maritime transport. While there is still movement by floating (of logs) and barge on inland waterways, road and rail 267

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now account for the bulk of overland transport between countries. The number of companies involved in international trade in wood products is still very large, but the increasingly rapid changes in trading practices and intensifying competition have resulted in many going out of business or merging into larger and fewer businesses. In most countries business is conducted by privately owned (family) or joint stock companies; in a few, such as Japan and South Korea, the bulk of trade is in the hands of general trading houses; while in countries in transition towards market economies there are still State-owned trading organisations, although private businesses also now exist. The major trading nations may be divided into four groups: 1

Those that are important as both importers and exporters, although their imports are larger than exports: the USA, Germany, France. These countries accounted for a quarter of world exports of wood products in 1997 and a slightly larger proportion of imports. 2 Major net exporting countries: Canada, Finland, Sweden, Indonesia, Malaysia, Austria, Russian Federation, Brazil. These countries accounted for 47% of world exports in 1997, but only 8% of imports. 3 Major net importing countries: Japan, China, United Kingdom, Italy, Netherlands, South Korea.Their share of world imports in 1997 was 38%, and of exports 10%. 4 Other trading countries that are of particular interest as exporters or importers or both: Australia, Chile, New Zealand, Mexico, Portugal, South Africa, Thailand. Between them, they accounted for about 5% of world exports and imports in 1997. A number of other countries in the ‘Top 20’ list of exporters or importers could also be mentioned, whose trading characteristics are similar in many respects to those covered under 2 or 3 above: Belgium– Luxembourg, Denmark, Norway, Spain, Switzerland. Each country has its own trading pattern, determined by the nature and extent of its forest resources, the capacity and technological development of its wood-processing industries, the size of its population and its standards of living, and other factors.

Influences on wood products markets and trade The usefulness of price data depends to a large extent on how precise they are as regards product specification, and each country tends to have its own 268

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grading system. This, and the need to adjust current prices to take account of inflation and to convert prices to a common currency, makes it difficult to develop comparable price series. As a result, opinions differ as to the longterm trend in prices for wood products; some consider that there has been a long-term rising trend, others that there is no evidence for a significant change in prices in recent decades. Changes in exchange rates can have a considerable impact on the competitiveness of wood products entering international trade, at least in the short term. In developed countries, most tariffs are generally quite low and have only a limited impact on the volume of trade. Those in developing countries are mostly higher, but everywhere there has been a lowering of tariffs as a result of international negotiations, notably the GATT Uruguay Round concluded in 1994. A feature of many countries’ schedules is tariff escalation, with those on wood raw material low or non-existent, becoming progressively higher with the degree of processing. In addition to tariffs, there is a wide range of rules and regulations that may impede trade, which include health and technical standards and measures that influence prices. Their impact on trade is more difficult to assess than tariffs. Among the measures which have most impact on trade in wood products are: quantitative restrictions on imports; technical standards and plant health standards; other measures imposed by importing countries; and export restrictions. There are also impediments to trade, frequently imposed for environmental reasons, which include: bans and boycotts; certification and labelling; and international environmental regulations. For better or worse, globalisation is here to stay. The capacity of a country and its peoples to benefit from globalisation is linked to their ability to innovate technology or adopt it from elsewhere and appears to be a major factor leading to the widening gap between rich and poor countries. For the moment it does not seem to be affecting the forest sector and international trade in wood products very much, at least directly, partly because the scale of corporations in the sector is not large compared with some other sectors. This, however, is changing as some US and European wood products companies indulge in trans-national mergers. Almost all countries have been involved in regional integration in one way or another, seeking to benefit from the lowering of internal tariffs and non-tariff barriers and strengthening of economic development. Well-established examples include the European Union, NAFTA, ASEAN and Mercosur. It is not yet clear what impacts regional integration is having on the volume and pattern of trade in wood products. One effect seems to be to stimulate specialisation in production, leading to increased two-way trade, for example in certain woodbased panels and paper and paperboard within the EU. There are many governmental organisations and a great many more nongovernmental organisations which are involved in one way or another in the 269

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forest and wood products sector. Among the former, which have mandates covering international trade in wood products at the global level, are FAO, the World Bank, WTO, ITTO and the UNCTAD/WTO International Trade Centre; and at the regional level ASEAN, NAFTA, UN-ECE and the EU. Others deal with the forest and wood products sector either within a broader framework or on an ad hoc basis. Among the thousands of NGOs there are those representing sectoral interests and those with concerns for the environment. In addition there are many international and national research institutions and think-tanks, which give special attention to wood products trade and markets.

Trade and the environment Deforestation in the temperate regions has been taking place for thousands of years and is still occurring in a few places, although the total forest area in temperate and boreal regions has been expanding slightly for some time. In the tropical regions deforestation and forest degradation have become widespread only in the second half of the twentieth century and by the 1990s deforestation was running at an estimated rate of 12.6 million ha a year. The causes have been mainly socio-economic, led by the needs for more land for agriculture and for more trees to be cut for fuelwood. The role of commercial logging is controversial: removals of industrial wood in tropical countries are about 20% of total removals, and exports of wood products originating from the natural tropical forest are equivalent to a quarter of industrial wood removals, which implies that commercial exploitation for export has played only a small part in tropical deforestation. On the other hand, logging involves damage to the remaining trees, disturbance to the environment and the opening up of the forest to colonisers, who carry on the process of clearance and burning.The destruction of tropical forest is also contributing to the accumulation of greenhouse gases in the atmosphere, even if its share is small compared to that of the burning of fossil fuels. Plantations have been increasing in both the temperate and tropical regions, although their area is only a small part of the total forest area. On the other hand, they are contributing a proportionately much greater share to total production of industrial wood, and this share will increase as that of removals from the natural forest declines. Environmentally speaking, plantations may help to relieve pressure on the natural forest, even if the quality of wood from them is inferior to that from natural forest; on the other hand, to maintain them as high-yielding monocultures over several rotations is probably not possible without the application of fertilisers and pesticides. In this respect they resemble agricultural crops more closely than they do

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forest, and need to be judged as such from the sustainable management and biodiversity points of view. The Brundtland Report Our Common Future (World Commission on Environment and Development) and the UNCED in 1992 stimulated efforts to expand greatly the area of forest under sustainable management. Various processes covering different parts of the world have introduced principles, criteria and indicators for SFM. Forest certification is being applied, not without a good deal of controversy, to a gradually increasing but still quite small area of the world’s forests, and with it certification of wood products along the chain-of-custody from forest to consumer. Despite a slow start in finding markets for certified forest products, an increasing number of forest owners and wood-processing industries are committing themselves to certification in the belief that it may help them to gain access to new niche markets and promote their company’s environmental image. Waste materials and their recycling have become major environmental issues. Recycled wood residues and waste paper are increasingly important sources of raw material for the wood-processing industries and for energy. In developed countries between 40 and 50% of all paper and paperboard used is recovered. There is still potential in those countries, and even more in developing countries to raise the recovery rate further. Several countries that are poorly endowed with forest (and therefore net importers of wood products) have large paper-making industries partly based on waste paper and export paper and paperboard. Legislation in some countries regarding the recovery and use of waste paper has resulted in a number of exporting countries having to import waste paper in order to comply with the waste paper content regulations. Greater use of waste paper has also had a negative impact on the demand for small-sized wood (pulpwood) and on the profitability of forestry. The tremendous growth in the use of fossil fuels during the nineteenth and twentieth centuries has been accompanied by a marked rise in CO2 concentrations in the atmosphere and growing fears about the likelihood of global warming. Wood’s present contribution to global energy supply is estimated at 7%, a large part of it being in the form of fuelwood used in the developing regions. The burning of wood for energy production is generally considered to be neutral so far as its impact on the environment is concerned, because the main emission is CO2, which is taken back into biomass from the atmosphere in the process of photosynthesis. Furthermore, wood comes from a renewable resource. Apart from wood’s potential as one of the alternative sources of energy (to fossil fuels), there is also the possibility that the role of forests and wood products as carbon storages could be expanded by the establishment of large areas of plantations and increased use of wood in long-lasting applications such as construction.

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The outlook A multiplicity of views There is in fact no single outlook; there are many, which vary according to the assumptions and methodologies of the experts making the projections or forecasts. And who is to judge which outlook is the most ‘realistic’? The starting point for most outlook studies on the forest and wood products sector is the forecasts by demographic specialists on population changes and by economists on the development of the economy, as expressed by Gross Domestic Product (GDP). Assumptions also have to be made about the future trends in real prices of wood products. In many models it is assumed that prices will remain constant; the impact of different assumptions about prices on the basic projections can be tested by means of sensitivity analysis. More sophisticated models may incorporate other explanatory variables, such as assumptions about the future trends in construction or more specifically new dwelling construction, or manufacturing or in particular furniture manufacture, or literacy levels. The assumptions may be tested by correlating historical trends in consumption of wood products with those of possible explanatory variables. The problem is often to obtain enough reliable and comparable national time series of suitable variables, hence the tendency in global projections to fall back on the most general variables, namely GDP and population. FAO’s Forestry Department has been the lead agency in much of the work on outlook studies in the forest and wood products sector. Recent studies at the world level have included the Global Fibre Outlook Study (FAO 1998a) and the Global Forest Products Outlook Study (Zhu et al. 1998); and at the regional level the Asia-Pacific Forestry Sector Outlook Study (FAO 1998b). Also at the regional level, the UN Economic Commission for Europe, in cooperation with FAO, has carried out a series of European Timber Trends and Prospects Studies (ETTS), the first of which was published in 1953 (ETTS I), a path-breaking effort, and the fifth and latest (ETTS V) in 1996 (UNECE/FAO). It is interesting to follow the development of the ETTS series, not least to observe the increasingly sophisticated methodologies employed as modelling experience was gained and the advent of computers increased enormously the possibilities for dealing with complex calculations.

Outlook for consumption of wood products A common feature of all the international-level studies on the forest and wood products sector has been that they assume a positive correlation between economic growth and consumption of wood products. As eco272

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nomic studies have up to now forecast continuing expansion of GDP, even in per capita terms, the result has been projections of the consumption of wood products increasing at the national, regional and global levels (Fig. 10.1, Table 10.1). World consumption of sawnwood in 1994, the base year for the projections, was lower than in 1980, principally due to the steep fall in consumption in the former USSR after the break-up of the USSR at the beginning of the 1990s and the virtual collapse of the economies of the CIS countries during the initial phase of transition from planned to market economies. There was the assumption that their economies would begin to recover after 1994, leading to a projected consumption of sawnwood 46% higher in 2010 than in 1994, although still less than half the pre-transition period level. Similarly, sharp falls in the consumption of wood-based panels and paper and paperboard in the former USSR after 1990 were projected to be followed by recovery after 1994, in the case of wood-based panels to a level in 2010 higher than in 1980. World consumption of sawnwood is projected to be 20% higher in 2010 than in 1994, an increase of slightly more than 1% a year. This growth is well below the expected rate of growth of GDP and also somewhat below the rate of population expansion, meaning that average world per capita consumption of sawnwood may decline a little. The projected consumption of sawnwood in 2010 of 498 million m3 is barely higher than the record level of consumption in 1988. Below average growth rates are expected in North America and Europe, above average rates in East Asia and Other Asia-Pacific, as well as in the former USSR. It is possible that the serious financial hiccoughs in some Asian countries in 1997/98, and the measures taken to correct them, may affect their long-term economic prospects, and hence the

600

Million units

500 400 300 200 100 0 1980

1990 Sawnwood

(m3)

2000

Wood-based panels

(m3)

2010 Paper & paperboard (mt)

10.1 Trends and projections of world consumption of wood products by main product groups, 1980–2010 (source: Zhu et al. 1998) (historical data adjusted to be consistent with projection data). 273

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Projections

1994

2000

2005

2010

(million units) Sawnwood (m3) WORLD North America Europe Former USSR East Asia Other Asia-Pacific Africa Latin America

Increase 1980 to 1994

1994 to 2010

(%)

429.4 117.8 81.8 94.3 66.6 32.7 9.9 26.2

415.3 143.4 92.2 27.5 68.4 45.4 9.0 29.3

446.5 150.0 96.9 33.7 74.9 50.2 9.6 31.2

471.8 155.8 101.4 36.8 80.4 54.2 10.2 33.0

498.3 161.6 106.1 40.1 86.4 58.5 10.8 35.0

-3 22 13 -71 3 39 -9 12

20 13 15 46 26 29 20 19

Wood-based panels (m3) WORLD 88.0 North America 31.1 Europe 23.8 Former USSR 9.8 East Asia 12.9 Other Asia-Pacific 4.7 Africa 1.6 Latin America 4.2

125.4 39.4 39.4 4.4 27.4 8.4 1.5 5.0

144.5 43.7 44.4 7.1 31.8 10.0 1.8 5.7

161.0 47.6 49.3 8.6 35.7 11.4 2.0 6.3

179.1 51.9 54.7 10.5 39.5 12.9 2.4 7.2

42 27 66 -56 113 79 -10 20

43 32 39 141 44 54 60 43

Paper and paperboard (mt) WORLD 156.8 North America 64.8 Europe 37.0 Former USSR 8.6 East Asia 27.4 Other Asia-Pacific 6.8 Africa 2.5 Latin America 9.7

265.9 91.5 70.9 2.9 66.2 16.8 3.6 14.1

308.3 104.8 80.5 4.1 79.2 19.9 4.2 15.6

348.0 114.9 90.5 5.1 92.9 22.9 4.7 17.1

391.0 126.2 101.7 6.4 106.4 26.4 5.2 18.7

70 41 92 -67 141 145 49 45

47 38 43 124 61 57 43 33

Sources: Adapted from Zhu et al. 1998

strength of the growth in consumption of wood products. The possibility of the unexpected happening should put the users of forecasts and projections on their guard. The same warning would have applied to forecasts for the former USSR made before 1990. World consumption of wood-based panels and paper and paperboard is projected to reach 179 million m3 and 391 million tonnes respectively by 2010, having risen at twice the rate of that of sawnwood between 1994 and 2010. Average world growth rates may be below that of GDP but a little 274

PAST, PRESENT AND FUTURE

higher than that of population, leading to a modest rise in per capita consumption. As for sawnwood, the rate of growth in consumption in North America and Europe is slightly below the world average; it is appreciably higher, in the case of wood-based panels, in the former USSR, Other AsiaPacific and Africa, and in the case of paper and paperboard in East Asia and Other Asia-Pacific. Again, it is difficult to say yet whether the financial turmoil in parts of Asia in the late 1990s will have affected the long-term outlook there. Sawnwood, wood-based panels and paper and paperboard make up the bulk of the wood products obtained from industrial wood. Converting their consumption in 1994 and 2010, as shown in Table 10.1, into the equivalent volume of wood in the rough (m3 EQ), the volume needed for their manufacture is predicted to rise by about 36% over the 16-year period, or an average of 42 million m3 EQ a year. This may be compared with the forecasts of the consumption of industrial wood in Table 10.2 and Fig. 10.2.

Comparison of consumption projections World consumption of industrial wood, that is wood harvested from the forest for industrial use, is projected, according to the same source as in

Table 10.2 2020

Comparison of projections of world consumption of industrial wood to

1990 (actual) Source Simons FAO Sedjo & Lyon Apsey & Reed Jaakko Pöyry Nilsson Brooks in Solberg (ed)a Brooks in Solberg (ed)b Brooks in Solberg (ed)c Zhu et al.

Year of publication

1995

2000

2010

2020

2.15 2.28 1.97 1.94 1.70 1.89 1.84 2.09 2.03 1.88

2.55 .. 2.14 2.25 .. 2.00 1.87 2.33 2.16 ..

(billion m3)

1994 1995 1995 1995 1995 1996 1996 1996 1996 1998

1.71

1.74 1.74 1.66

1.73 1.73 1.73 1.47d

a

Assumption: low GDP growth; 0.5% annual price increase Assumption: high GDP growth, zero annual price increase c Assumption: average world per capita consumption remains constant d 1994 (actual) Sources: Brooks in Solberg (ed) 1996; Zhu et al. 1998 b

275

1.90 1.81 1.79 1.50 1.73 1.73 1.81 1.89 1.67

THE INTERN ATION AL TIMBER TRADE 2.5

Billion m3

2 1.5 1 0.5 0 1980

1990 Actual

2000 Brooks(1)

2010 Brooks(2)

2020 Mean

10.2 Trend and projections of world consumption of industrial wood, 1980–2020 (source: Brooks in Solberg (ed) 1996).

Table 10.1 (Zhu et al. 1998), to increase by 28% between 1994 and 2010, or 26 million m3 EQ a year. This is the most recent of the projections shown in Table 10.2 and uses 1994 as base year; it takes into account developments in the early 1990s, notably the drop in supply and consumption of industrial wood in the former USSR. The other projections may also do so, although their base year is usually 1990. The projections are not directly comparable, since each is based on its own assumptions and employs its own methodology. For example, Sedjo and Lyon (1990) use a global timber supply model with an optimal control method to determine the timing and location of harvests and investment in forest management. Industrial wood production and forest management respond to changes in demand, and the magnitude of the response in harvest in the short run and management intensification in the long run affects the price of wood. The result of the base scenario is an equilibrium-based forecast of modest price increases; an alternative scenario with faster growth in demand and constrained supply from traditional sources leads to strong expansion of the area of plantations and a rise in harvest from those sources, resulting in constant real prices for industrial wood. Apsey and Reed (1995) assume that demand for industrial wood will increase at a rate of 1.5% a year, and focus their analysis on an assessment of wood supply. Their projected demand exceeds supply, resulting in a ‘gap’. In practice, gaps do not materialise; the magnitude of any hypothetical gap is used to indicate the severity of possible dislocations in markets and the likelihood of pressures to change policies. The closing of the gap would be achieved by a combination of higher prices and reduced demand, substitution by other products and higher production. Nilsson’s ‘mainstream’ outlook produces an even larger gap than Apsey and Reed’s, but his ‘non-mainstream’ forecast, the one shown in Table 10.2, 276

PAST, PRESENT AND FUTURE

is of demand increasing at a much slower rate, with supply roughly in balance with demand (1996). Slow growth in markets in developed countries, and significantly lower income elasticities of demand for developing countries, result in world demand for wood products increasing at less than 1% a year. Brooks et al. in Solberg (ed) (1996) produced six scenarios of consumption of industrial wood based on combinations of assumptions regarding GDP growth and prices. The one producing the least growth in consumption of industrial wood was based on the assumption of lower growth in GDP and a price increase of 0.5% a year; the one with highest growth was based on the assumption of higher GDP growth and zero price increases. These two are shown in Table 10.2 as well as a further projection based purely on the assumption that per capita consumption of industrial wood would remain constant over the projection period. The lowest and highest of these projections by Brooks et al., together with the mean of the projections shown in Table 10.2, are presented in Fig. 10.2. The common feature of all the forecasts is that consumption of industrial wood is expected to continue rising in the coming few decades. Where they differ is in the likely rate of growth and the extent to which supply will remain in equilibrium with demand. In cases where a hypothetical gap emerges, the adjustment process is expected to be accompanied by price increases. Perhaps the finding of the FAO 1998a study comes nearest to a compromise position in forecasting that, globally, supply and demand for industrial wood may remain in reasonable balance in the next decade or so, although imbalances are likely to arise at local and regional level. Shifts in trade patterns can in consequence be expected. The projections of growth in consumption of industrial wood in total are appreciably less than the projected expansion of the main wood products groups in terms of m3 EQ (the example of the Zhu et al. projections was given above). The explanation lies in the increasingly important role of industrial wood residues and waste paper in augmenting the raw material supply to industry. Data are not available on a world level of the volumes involved, but those for Europe may be taken as an example (Table 10.3, Fig. 10.3). The figures of European removals and total supply include fuelwood, but this does alter the general picture, which is that the share of removals in total supply is expected to decline from 69% in 1990 to 56% in 2020 according to the low growth scenario or 52% according to the high growth scenario. Over the same period, the share of waste paper is forecast to rise considerably – from 13 to 21 or 22%; and of industrial residues slightly from 8 to 9%. Europe’s net imports are also forecast to increase their share of total supply from 10% in 1990 to 15 or 17% by 2020. It needs to be pointed out that the forecasts of net trade are obtained as a residual figure from the 277

THE INTERN ATION AL TIMBER TRADE Table 10.3 Relative importance of different components of wood and fibre supply in Europe (including Baltic states), 1990 and 2020 (low and high forecasts) Volume 1990

2020 (low)

Share of total 2020 (high)

1990

2020 (low)

(million m3 EQ)

2020 (high)

(%)

European removals Industrial residues Waste paper Net imports

392 47 72 55

480 74 178 130

489 80 206 164

69 8 13 10

56 9 21 15

52 9 22 17

TOTAL

566

862

939

100

100

100

Source: UN-ECE/FAO 1996

Net imports 15.1%

Net imports 9.7% Waste paper 12.7% Waste paper 20.6%

Industrial residues 8.3%

1990

European removals 69.3%

Industrial residues 8.6%

European removals 55.7% 2020 (low)

10.3 Relative importance of different components of wood and fibre supply in Europe, 1990 and 2020 (low forecast) (source: UN-ECE/FAO 1996).

difference between the forecasts of consumption and production. They therefore represent an indication of a hypothetical gap as much as a forecast of import requirements. The gap could be closed either by increasing imports or by raising domestic supply (removals or recycling) or by reducing consumption. In fact, a strong rise in net imports, as indicated in Table 10.3, would be a change in trend compared with recent decades, during which Europe’s net imports appear to have been rather stable, even with a slight tendency to decrease. At the same time, the potential to raise supply from Europe’s forests, as well as from recycling, has become more apparent. Although not all modellers might agree, there appear to be greater difficulties in producing quantitative projections or forecasts for trade, and even 278

PAST, PRESENT AND FUTURE

for production, that can be considered ‘reasonable’, than for consumption or demand. We shall revert to the outlook for trade later.

Outlook for production of industrial wood In the early 1990s, the area of productive forest, which is more or less synonymous with forest available for wood supply, was estimated at 2.9 billion ha (Brooks et al. in Solberg (ed) 1996). Of this, only a minor part, about 500 million ha or less than 20%, was considered to be managed. More than 60% of the production (removals) of industrial wood, however, took place in that area (Fig. 10.4). The remaining area, consisting predominantly of unmanaged or extensively managed natural forest in both tropical and temperate and boreal regions, covered 2.4 billion ha (over 80%) and accounted for less than 40% of production. Harvesting intensity was, in consequence, far higher in the managed forests than in the others, averaging 2 m3/ha/year on the former and only 0.3 m3/ha/year on the latter. In assessing prospects for industrial wood production, Brooks et al. (in Solberg (ed) 1996) distinguish between five different categories of productive forest according to their ownership and management status: M5 Forests owned by forest industries in 16 temperate/boreal countries (see below). For some countries, this includes plantations of fast-growing, exotic species and native forests. M4 Fast-growing plantations in the tropics; these are plantations, publicly or privately owned, established and managed for wood production. M3 Forests owned by private, non-industrial owners in 16 temperate/boreal countries. This includes fast-growing plantations in some countries (e.g. Australia, Chile, New Zealand) and plantations of native species (e.g. in the USA, Nordic countries, Japan). M2 Public forests in 16 temperate/boreal countries. This includes both intensively-managed plantations and more extensivelymanaged forests of native species. M1 This is calculated as a residual: total world area of productive forest and industrial wood production less those in categories M5 to M2. It includes areas and production in both temperate/boreal and tropical countries, and both publicly and privately owned forests. Although there may be some intensively-managed forests included in the area, harvesting is typically from extensivelymanaged natural forests. The 16 temperate/boreal countries, for which ownership is used to define management categories for M5, M3 and M2 are: Austria, Australia, 279

THE INTERN ATION AL TIMBER TRADE 3000 2000

2000

Million m3

Million ha

2500

1500

1500

1000

1000 500 500

0

0 1995

2000

2010

2020

1995

2000

(a)

2010

2020

(b)

100

100 90

80

80

% of world total

% of world total

70 60

40

60 50 40 30 20

20

10 0

0 1995

2000 2010 (c)

2020

1995

2000

2010

2020

(d)

M1

M2

M3

M4

M5

(Categories: see text)

10.4 (a) Outlook for production of industrial wood: Trend in area of productive forest by management categories, 1995–2020: Scenario I. (b) Trend in production of industrial wood by management categories, 1995–2020: Scenario I. (c) Share of area of productive forest by management categories, 1995–2020: Scenario I. (d) Share of production of industrial wood by management categories, 1995–2020: Scenario I (source: Brooks in Solberg (ed) 1996).

280

PAST, PRESENT AND FUTURE

Canada, Chile, Finland, France, Germany, Japan, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and USA. They account for roughly 60% of industrial wood production. The estimates of area of productive forest and volume of harvest in 1995 in the five management categories and two scenarios for 2020 are set out in Table 10.4. Scenario I illustrates some of the expectations expressed in recent outlook studies. These include a decline in the area of extensivelymanaged natural forest available for wood production (M1), either as a result of deforestation or an increase in the area removed from production in order to provide non-wood goods and services, notably conservation and biodiversity. Harvesting intensity is assumed to increase in all categories: the fastest increase for fast-growing plantations (M5 and M4), as larger areas reach maturity; the slowest for extensively-managed forests (M1). In Scenario II it is assumed that the rate of decline of forest area in category M1 (the main residual group) is slower than in Scenario I, while the rate of increase in category M4 (fast-growing plantations in the tropics) is higher. In both scenarios, the area of forest in categories M3 (forests owned by private, non-industrial owners in 16 temperate/boreal countries) and M4 (public forests in 16 temperate/boreal countries) is expected to decline; and harvesting intensity in all categories of forest is expected to increase (Fig. 10.5 compares those in Scenario I for 2020 with 1995). Compared with 1995, the estimate of world production of industrial wood in 2020 is 25% higher in Scenario I at 1.98 billion m3, and 44% higher in Scenario II at 2.28 billion m3. Table 10.4 Scenarios for the production of industrial wood according to forest management categories in 2020 Categorya

Unit

M5

M4

M3

M2

M1

Total

1995 Productive forest area Industrial wood production Harvesting intensity

million ha million m3 m3/ha/year

43 196 4.56

23 65 2.83

217 419 1.93

218 307 1.41

2407 592 0.25

2908 1579 0.54

2020 – Scenario I Productive forest area Industrial wood production Harvesting intensity

million ha million m3 m3/ha/year

48 264 5.50

35 210 6.00

200 500 2.50

150 300 2.00

2019 707 0.35

2452 1981 0.81

2020 – Scenario II Productive forest area Industrial wood production Harvesting intensity

million ha million m3 m3/ha/year

48 288 6.00

50 300 6.00

200 600 3.00

150 338 2.25

2150 753 0.35

2598 2278 0.88

a

See description of forest categories in text Source: Brooks in Solberg (ed) 1996

281

THE INTERN ATION AL TIMBER TRADE 7 6

m3/ha/year

5 4 3 2 1 0 M5

M4

M3 1995

M2

M1

World

2020 (Scenario I)

(Categories: see text)

10.5 Harvesting intensity by categories of productive forest, 1995 and 2020: Scenario I (source: Brooks in Solberg (ed) 1996).

Time will tell how ‘realistic’ these scenarios prove to be. It can be noted that they fall within the range of consumption forecasts presented earlier, which says nothing about their acceptability, but does lead to the conclusion that there is no evidence of any marked imbalance arising between supply and demand of industrial wood at the global level in the next decade or two. In that respect, quite a lot hinges on the development of fast-growing plantations, not only in the tropics (category M4 as described above), but also in other categories, especially M5, M3 and M2. The assumption is that production in such plantations will average 6 m3/ha/year by 2020. This is appreciably less than the net annual increment (NAI) currently achieved in many plantations. For example, the NAI in New Zealand’s radiata pine plantations averages 18 m3/ha/year (UN-ECE/FAO Forest Resources of Europe 2000), while some eucalyptus plantations in Brazil reportedly achieve an NAI of over 50 m3/ha/year. After allowing for harvesting losses, bark percentages and so on, the actual volume harvestable from such plantations is very much less than the NAI. Nevertheless, there is tremendous potential for raising production per hectare through the intensification of forest management. Theoretically, the current world demand for industrial wood could be met entirely from 120 million ha of plantations, or not even 5% of the present area of productive forests, if their average yield was 15 m3/ha/year. That would allow much of the remaining area of natural forests, and even those

282

PAST, PRESENT AND FUTURE

already under management, to be put aside for non-wood production purposes, if that was felt desirable for environmental and social reasons. It will not happen like this, of course. Apart from anything else, it would cause an unacceptable breakdown of the existing world distribution of industrial production capacities, international trade and distribution systems. But this hypothetical scenario does demonstrate the untapped potential that exists to increase industrial wood production, if the need arose, by the intensification of forest management, and without jeopardising the principles of sustainability. In a different way, there would also be potential to produce in a more concentrated fashion the world’s needs for fuelwood, although this would require the establishment of plantations in proximity to local communities.

Outlook for fuelwood Fuelwood accounts for roughly half the volume of world roundwood removals and as much as four-fifths of those in the developing regions. Sources and markets for fuelwood, where they exist at all, are often quite distinct from those for industrial wood, and with certain exceptions, there is not serious competition between fuelwood and small-sized industrial wood. Nevertheless, demand for fuelwood is one of the factors causing tropical deforestation, especially in the drier, less well forested regions, and demand and availability of it need to be taken into account in global assessments of the overall wood supply–demand balance. Scientific forecasting of fuelwood demand is hampered by the unreliability of data. Many forecasts have assumed a continuation of past upward trends. Brooks et al. (in Solberg (ed), 1996), however, use an assumption that with rising personal incomes, people in developing countries will exercise their preference for more ‘convenient’ fuels. The consequence would be that with higher rates of economic growth the switch to those fuels, i.e. fossil fuels and electricity, would be faster than with slower economic growth. Increasing urbanisation in the developing world would also contribute to that trend. The result is given in Fig. 10.6, which also includes a projection of what would happen if per capita consumption levels at the world level remained constant in the future. According to these projections, fuelwood consumption would be 8– 13% higher in 2020 than in 1990 or, if per capita consumption were to remain constant, 52% higher. In terms of wood raw material equivalent, fuelwood will remain the single most important use of wood, even if by 2020 it is likely to account for less than half the total at the world level, compared with 51% in 1990.

283

THE INTERN ATION AL TIMBER TRADE 3 2.5

Billion m3

2 1.5 1 0.5 0 1990

2000

Lower GDP growth

2010 Higher GDP growth

2020 Constant per capita

10.6 Forecasts of world fuelwood consumption, 1990–2020 (source: Brooks in Solberg (ed) 1996).

The Asia-Pacific region One of the greater uncertainties regarding the outlook for wood products is the course of future demographic and economic developments in the AsiaPacific region. About 55% of the world’s population live in the countries of this region which, however, account for not much more than one-quarter of world GDP, with Japan alone taking more than half of the region’s share. Even if the growth rate of population slows down, as expected, and even if the rate of expansion of GDP is slower than the strong rate achieved before the financial difficulties in some countries in the late 1990s, the region’s importance in the world market for wood products is likely to grow. This also takes into account the expectation that consumption in the two largest markets, North America and Europe, will increase more slowly than the world average. The projections of consumption in Tables 10.5 and 10.6 are taken from a recent FAO study of the Asia-Pacific region (FAO 1998b) which, it should be noted, does not include the countries of western Asia. For all three main groups of wood products, sawnwood, wood-based panels and paper and paperboard, consumption in Asia-Pacific is projected to increase more strongly than in the rest of the world on average, especially in the case of paper and paperboard. Asia-Pacific may consume one-third of the world market for the latter products by 2010. Given the considerable importance of countries such as Japan, China and South Korea as importers of wood products and the fact that their potential to raise domestic supplies of industrial wood is limited, it is probable that growth in consumption will have to be met largely by increased imports. 284

285

142.4 51.0 131.0

298.6 91.0 184.9

356.0 128.1 260.0

2010

27 47 61

Asia-Pacific (%) 19 41 41

Rest of world

27.2 27.5 30.6

1994

57.0 37.6 24.6 23.1

Volume (million m3) 18 38 27 38

Increase 1994–2010 (%)

Sawnwood

40.0 26.4 17.3 16.2

Share of total (%) 26.6 16.0 0.9 7.5

Volume (million m3)

34 64 49 72

Increase 1994–2010 (%)

Wood-based panels

52.2 31.4 1.8 14.7

Share of total (%)

(%)

65.7 48.2 5.8 11.3

Volume (million mt)

61 61 50 60

Increase 1994–2010 (%)

28.6 28.5 33.5

2010

50.2 36.8 4.4 8.6

Share of total (%)

Paper and paperboard

Projections of consumption of wood products by country groups in the Asia-Pacific region in 2010 and change from 1994

111.7 34.6 81.5

1994

(million units)

2010

Increase 1994–2010

Share of AsiaPacific in world total

b

Advanced and newly industrialised countries: Australia, Japan, New Zealand; Hong Kong SAR, Singapore, South Korea,Taiwan province of China China (excl. Hong Kong and Taiwan), Mongolia, North Korea c Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka d South-east Asia and Pacific Islands: Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Laos, Philippines, Vietnam, Thailand; Cook Islands, Fiji, New Caledonia, Papua New Guinea, Samoa, Solomon Islands,Tonga,Vanuatu Source: FAO 1998b

a

ANICsa North Asiab South Asiac SEAPIsd

Table 10.6

Excluding western Asia Source: FAO 1998b

a

m m3 mt

3

Unit

1994

Asia-Pacific

Rest of the world

Projections of consumption of wood products in the Asia-Pacific regiona and in the rest of the world in 2010 and change from 1994

Sawnwood Wood-based panels Paper & paperboard

Table 10.5

THE INTERN ATION AL TIMBER TRADE

Among the findings in the FAO study that are relevant to the outlook for trade are the following: 1 2

3 4 5 6

7

A major area of uncertainty is the outlook for supply from the Russian Far East. Another uncertainty lies in the prospects for economic development in two of the major economies of the region, China and India. The Asia-Pacific region will increase its dependence on imports for all industrial wood products. Asia-Pacific will become a net importer of wood-based panels; up to now it has been a net exporter. By 2010, Asia-Pacific consumption of sawnwood will be second only to that in North America. There is a very large latent demand for paper, which could be transformed into real demand, particularly if economic growth accelerates in key countries such as India. The Asia-Pacific region will remain heavily dependent on trade to balance national and regional shortfalls.

General findings The varying perspectives on the outlook for the supply and demand of wood and its products, which were referred to earlier in this chapter, lead to a number of broad conclusions (Peck et al. in Solberg (ed) 1996): 1

Global demand for wood, both industrial wood and fuelwood, will continue to rise for the foreseeable future, although probably at a slow rate. It is difficult to visualise the upward trend in demand being reversed for wood in total, as long as populations and economies continue to expand, although it could happen for particular assortments, such as fuelwood, or in particular regions, such as those with already high per capita consumption levels. 2 The environmental pressures that are leading to the partial or total withdrawal of some ‘natural’ or ‘old-growth’ forests from wood production in several regions will reduce the availability of wood from these forests, notably of the higher value assortments, such as sawlogs and veneer logs. A considerable portion of the

286

PAST, PRESENT AND FUTURE

3

4

5

6

7

forests that will remain available for wood production will become subject to stricter controls on silvicultural and harvesting operations than those of today and/or will become less accessible for harvesting. The increased wealth and well-being of society will have associated with it an increase in the demand for functions of the forest other than the production of wood, such as recreation, nature conservation and wilderness. This will be associated with measures to apply sustainable forest management systems as widely as possible and to ensure, through certification, that products sold on the market come from such sources. Despite a declining area of forest available for wood supply, the potential physical availability of wood fibre globally appears to be adequate to meet future demand. With changing patterns of the sources of wood supply as well as of the consumption centres of processed forest products, international trade in these products will become an increasingly important element in the global supply–demand balance. For fuelwood and other low value products, however, trade is not an economic option, and a critical supply situation may arise in certain regions, such as the drier, less well forested areas of the tropics with large populations living below the poverty line, who will remain heavily dependent on wood for heating and cooking. The trend will continue for the production (removals) of industrial wood to be increasingly concentrated on sites where intensification of management is feasible and acceptable; and for a growing share of production to come from the private sector. This will result in an increasing share of total industrial wood coming from plantations and other high-productivity forests. Improved and more widely applied silviculture will raise yields in existing production forests, although this may be partly offset by the move, for environmental and social reasons, to grow a greater mixture of species and to restore or introduce continuous-cover silvicultural systems. On balance, it appears more likely that a modest increase in real prices for industrial wood raw material will occur over the long term than that they will remain stable, although the evidence for such an expectation is not conclusive. Increases may be more noticeable in the case of the higher value sawlogs and veneer logs, as their availability from traditional sources declines. The recycling of wood residues and waste paper will continue to expand faster than the demand for paper and paperboard-making fibre in total.

287

THE INTERN ATION AL TIMBER TRADE

Recent developments The trends in the forest and wood products sector in general, and in trade in particular, which have been described in previous chapters, and the prospects offered by a number of experts, which have been outlined in this chapter, are based on developments that have in some cases been superseded by more recent events. It has not been the intention of this book to provide an up-to-the minute account of market developments, but rather to look at them from a longer-term perspective. Nevertheless, in considering the medium- to long-term outlook for the sector, there are a number of recent, and not so recent, developments, which will or could have an impact on the sector, including international trade in wood products, and which may or may not have been taken into account in the outlook studies. Some events are still unfolding; for others, the consequences are not yet clear. Some of the more important ones are described in the following paragraphs. •

•

•

Globalisation and its backlash. The events outside the WTO conference in Seattle in December 1999, which were largely responsible for its failure, have been followed by other demonstrations against the process of globalisation. How this will affect the process, including the work of and negotiations in such bodies as the WTO, World Bank and IMF, remains to be seen. One effect might be to slow down the pace of trade liberalisation and encourage the forces of protectionism. On the positive side, it could lead to greater attention being given to the social and environmental aspects of globalisation. International politicisation of the forest and wood products sector. Since UNCED in 1992, and even before, the sector has been receiving ever-increasing attention from policy makers and legislators at the national, regional and global levels, as well as from NGOs. This has been both a good thing and a bad thing. On the positive side, efforts to bring deforestation in the tropics and environmentally unfriendly forestry and harvesting activities nearly everywhere under better control, and to have the principles of sustainable forest management more generally applied, are slowly, sometimes almost imperceptibly, being rewarded by results. On the negative side, measures taken and legislation introduced, sometimes with the best intentions, may in practice have counter-productive effects on the sector, for instance by creating non-tariff barriers or by increasing costs and reducing competitiveness. Political instability. It may be a false impression, but at the beginning of the twenty-first century there seem to be more ‘trouble spots’ than ever around the world. Particularly affected have been parts of Africa south of the Sahara, the Balkans, some Asian and Middle East countries and the Russian Federation (Chechnya). Strife, whether internal or international, 288

PAST, PRESENT AND FUTURE

•

•

•

is bad for investment, economic development and trade, quite apart from the social consequences and physical destruction of equipment, or its deterioration due to lack of maintenance. Political instability may also be accompanied by corruption, although the latter is not limited to unstable regimes. Monetary instability. The financial disturbances in several South-East Asian countries in1997/98 had immediate effects on their economies and foreign trade, as well as on their exchange rates, particularly that of Indonesia. A similar problem affected the Russian Federation shortly afterwards. Although most have since been making good recoveries, the events in South-East Asian countries and South Korea revealed certain weaknesses in their financial systems, which may take considerable time and effort to put right and which suggest that the ‘Asian economic miracle’ of the 1990s was probably not sustainable and may be followed by more restrained growth in the coming decade. Another problem, especially for many of the poorest developing countries, is the burden on their economies created by the servicing of their foreign loans from both the public and private sectors in developed countries. This problem was discussed but not resolved at the Okinawa meeting of the G7 in summer 2000. Prolonged economic growth in the United States. The United States has been enjoying one of the longest periods of uninterrupted economic expansion in its history, accompanied by low unemployment levels, modest inflation, marked improvements in productivity, booming stock markets and large import deficits. Accounting for about 17% of world imports of wood products and 14% of exports, what happens in the world’s leading economy is of international significance, especially to its trading partners. Despite a series of interest rate increases in the months up to mid-2000, there were some signs of a cooling of the economy. Assuming that sooner or later it must slow down, the question is whether this will occur with a ‘soft landing’ or a ‘hard landing’. The latter could lead to a major recession, with implications for the global economy, including the USA’s trading partners in wood products, notably Canada, its main supplier. In mid-2000, it is still difficult to judge on the future direction of the US economy: this is something to be watched carefully. Economic stagnation in Japan. In contrast to the USA, the economy of Japan has been passing through a period of limited growth, accompanied by financial difficulties in the banking and some other business sectors. Government measures to stimulate the economy have so far (mid-2000) failed to produce positive results. Japan is the world’s second largest economy, and also the second largest importer of wood products, with 11% of the total. Its economic development is therefore of concern inter289

THE INTERN ATION AL TIMBER TRADE

•

•

nationally, especially among its main trading partners around the Pacific Rim. Energy prices. In early 1999, crude oil prices were at their lowest level for many years, around 10 US$ a barrel; a year later they were hovering above 30 US$, as a result partly of stronger economic activity worldwide and rising demand, and partly of production limitations imposed by OPEC, the oil producers’ cartel. Concern has been expressed that a continuation of prices at that level could contribute to a resurgence of inflation and stifle economic expansion. It is OPEC’s stated objective to stabilise prices in the range of 22–28 US$ a barrel. Even if that occurs, we have probably witnessed the end of a long period during which we were lulled into a false sense of security about low energy costs. This, together with the growing concerns about climate change, is likely to lead to renewed efforts to conserve energy and develop alternatives to fossil fuels. It comes at the same time as doubts have been re-emphasised about the safety of nuclear power, with Germany, for example, planning to phase it out within a decade or two. While higher energy costs could have negative impacts on demand for wood products as a result of a general slowing of economic growth, this could be offset by gains in competitiveness because of the lower energy input in the production and utilisation of wood products compared with alternative materials. With energy an important component of transport costs, there could be implications also for the volume and pattern of trade in wood products, with the movement of low unit value (high weight to value ratio) commodities, such as wood raw material, being affected more severely than that of higher value ones. This could encourage the further development of processing near the forest, and trade in processed and higher unit value products, and further phasing out of production based on imported raw material in importing countries. Forest fires. There may not be a proven connection, but the worst outbreak of forest fires in the western USA in the summer of 2000 for more than 50 years, following 2 years of unusually dry weather, serves as a reminder of the impacts to be expected from changes in the global climate. Serious outbreaks have also occurred in the far east of the Russian Federation, Greece, the Iberian peninsula and Australia. The fires in the USA were mainly caused by lightning. Those in Indonesia in previous years, however, from which palls of smoke spread over a huge area, even disrupting commercial flights in neighbouring countries, were caused by people, mostly burning off forest vegetation to make way for agriculture and palm oil plantations. They were aggravated by weather conditions caused by El Niño. Permanent changes in vegetation distribution as a result of climate change may be for the very long term, but catastrophes such as forest fires and insect and disease epidemics, if 290

PAST, PRESENT AND FUTURE

found to be linked to it, could accelerate the process. Even in the relatively short term, there might be an impact on the location of wood production and consequently on trade, although that possibility is something to monitor, not something that can be stated as a fact. Trading in emission reduction units (ERUs) as a means to bring CO2 emissions under control might also become part of the trading scene in years to come.

Implications for trade What, in conclusion, can be said about the implications for trade in wood products? Point 4 of the general findings, presented earlier, stated that ‘with changing patterns of the sources of wood supply as well as of the consumption centres of processed forest products, international trade in these products will become an increasingly important element in the global supply–demand balance’. This implies that exports will continue to increase as a proportion of production, and likewise imports as a proportion of consumption. This could be true while tariff barriers, where they still exist, continue to be removed and efforts to eliminate non-tariff barriers and impediments to trade, which may pose more of a threat to trade liberalisation, are successful. There may be a number of developments, however, that could inhibit future growth of trade in wood products, including: (a)

Importing countries relying increasingly on their own sources of raw material, notably waste paper and other consumer waste, to manufacture products that would replace imports. (b) Exporting countries taking an increasing share of their production to meet domestic requirements, with a smaller share available for export. (c) Declining availability of industrial wood from the forest in some traditional exporting countries. This is particularly the case in those countries relying primarily on hitherto unexploited forest, which is either becoming scarcer or more heavily protected, as a source of raw material. (d) Higher transport costs, mainly as a result of higher energy prices, leading traders to reduce the transport element of their imports cif and to rely more on supplies closer to hand. There are also reasons for supposing that trade in wood products will continue to expand in importance relative to production and consumption, amongst them being: 291

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(a)

Continuation of the trend towards specialisation in production, which will encourage two-way trading, for example in different specifications of the same product. (b) Continuation of the trend towards globalisation, resulting in fewer, larger manufacturing units with greater economies of scale and more competitive prices and stronger marketing operations, which would favour them in international markets. (c) Rapid advances in communications, including trading on the internet (e-commerce), which greatly reduce the disadvantages of distance between seller and buyer; and probably reduce the need for (and cost of) intermediaries in international trade. (d) Continuation of the trend towards the upstream manufacturing and export of processed products, especially added value products (secondary and tertiary processing). This might not result in an expansion in the volume of trade, but would probably increase the value. (e) Continuation in the establishment of new areas of plantations of fast-growing species in exporting countries or those with export potential. Note that plantations can also be established in importing countries, with the effect of reducing imports. It would seem, however, that up to now investor interest, unless actively supported by government subsidies, has generally favoured plantations in countries with export potential. No doubt there are plenty of other pros and cons to bring into the argument. Some may be more likely to result in changes in the pattern of trade than in absolute or relative quantities or values. For example, declining availability from natural forests and increasing availability from plantations could change the origin of exports without necessarily changing the total volume.

Concluding remarks As work on this book progressed, I became increasingly aware of the difficulties of avoiding two excesses. One excess would be to include so much detail that the reader would be bored to tears. The other would be to oversimplify to such an extent that the reader would be deprived of essential information.The problem was partly of my own making: by setting the objective of covering a broad range of topics and seeking to satisfy the interests of a range of readership groups in a limited number of pages. I have attempted to resolve the problem in two ways: for those seeking detail a 292

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large number of tables and figures have been included, which can be studied in lesser or greater depth according to need; and for those who find the coverage too superficial there is the list of references, totalling nearly one hundred, where different aspects of the subject are dealt with in greater detail. I can recommend all of the publications cited for further reading. On some topics, which I have tried to cover in a few pages, others have written whole books, for example on certification, wood and energy, or forest resources. Despite its limitations, which I acknowledge but for which I make no apology, given the constraints involved, I hope and believe the book will have achieved a number of things: •

•

•

•

It shows that, of all the commodities of importance in international trade, wood products are one of the most complex and diversified, ranging from basic raw materials straight from the forest to sophisticated manufactured products. One has to talk about markets in the plural for wood products rather than a single market. It shows the close linkage between the forest, a living and renewable resource, right through the various stages of transformation, handling and transport, to the ultimate use of wood products, in which international trade is often an important component. For most wood products, trade is a significant part of the supply–demand balance. It shows that the wood-processing industries are among the more important manufacturing sectors in many countries’ economies, and exports and imports of wood products are major components of countries’ total commodity trade. It shows the complexity of the pattern of trade in wood products, with virtually all countries involved as importers and most as exporters; and the way in which the composition and patterns of trade have altered over time and the reasons for these changes.

The book also demonstrates that, although the use of wood products has a history as old as mankind itself, such is the versatility of wood that its substitution by other materials in certain end-uses has been offset by the development of new uses. As populations and standards of living have risen, so has the overall demand for wood continued to grow, especially over the past two centuries. Studies forecast that expansion will continue in the foreseeable future, even if the rate of growth may not be dramatic. They also indicate that, despite continued pressures on the forest resource, including loss of forest area in parts of the tropics, such is the potential for improved productivity through more intensive forest management and the establishment of plantations, the resource can provide enough wood to meet demand in the future. Properly managed in accordance with the principles of sus293

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tainability, the forest will remain the source of a renewable and versatile material. Against the background of increasing public concern about the long-term availability of non-renewable resources, especially fossil fuels, the merits of forests and of wood products may become more fully appreciated than in the past, when they have sometimes been taken too much for granted. Renewability, however, comes at a cost: the prices at which wood products are traded on the market need to reflect the full cost of production, including the measures necessary to regenerate the forest crop after harvesting. Too often in the past, especially in the exploitation of natural forests, this has not been the case. Furthermore, there has been the implicit assumption that the provision of the non-wood goods and services of the forest, which are increasing in absolute terms and in relative importance to that of wood, should be financed out of the revenues obtained for wood. This is not unreasonable, if the customers for wood products, that is every one of us, accepts that condition in the price we pay for them. The forest sector has not been successful up to now in selling that message. Unless it can, it is likely to continue to find difficulties in attracting the investment support it deserves. It would be not only the sector itself that would be the loser, but society in general for failing to take advantage of a unique resource. The challenge, therefore, is for forestry and the wood industries to shed themselves of the reticence which has too often characterised them in the past, and to market themselves and their products more aggressively. The starting point in that marketing campaign should be the fuller realisation of the benefits that can accrue from making better use of a renewable resource, the forest, and a remarkably versatile material, wood.

294

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Appendix 1: List of selected international organisations concerned with the trade in wood products

Intergovernmental organisations Commission of the European Communities DG III/C/5 Rondpoint Schumann 11 6/36 B – 1049 Bruxelles, Belgium

Tel. +32 2 295 3726 Fax. +32 2 296 7015 E-mail: [email protected] Website: www.europa.eu.int

Food and Agriculture Organization of the United Nations (FAO) Forestry Department Viale delle Terme di Caracalla I – 00100 Rome Italy

Tel. +39 06 570 4174 Fax. +39 06 570 55137 E-mail: [email protected] Website: www.fao.org/forestry

International Monetary Fund (IMF) 700 19th Street N.W. Washington, D.C. 20431 United States of America

Tel. +1 202 623 7300 Fax. +1 202 623 4661 E-mail: [email protected] Website: www.imf.org 302

A PPE N D I X 1 International Trade Centre UNCTAD/WTO Palais des Nations CH – 1211 Geneva 10 Switzerland

Tel. +41 22 730 0111 Fax. +41 22 733 4439 E-mail: [email protected] Website: www.intracen.org

International Tropical Timber Organization (ITTO) International Organizations Center, 5th Floor Pacifico-Yokohama, 1-1-1, Minato-Mirai Nishi-ku, Yokohama 220-0012 Japan

Tel: +81 45 223 1110 Fax. +81 45 223 1111 E-mail: [email protected] Website: www.itto.or.jp

Ministerial Conference on the Protection of Forests in Europe Liaison Unit Marzerg 2 A – 1030 Vienna Austria

Tel. +43 1 710 77 0214 Fax. +43 1 710 02 13 E-mail: [email protected]

Office Statistique des Communautés Européennes (EUROSTAT) Jean-Monnet Building L – 2920 Luxembourg Luxembourg

Tel. +352 4301 37 313 Fax. +352 4301 37 317 E-mail: [email protected] Website: www.europa.eu.int/eurostat

United Nations Economic Commission for Europe (UN-ECE) Palais des Nations CH – 1211 Geneva 10 Switzerland

Tel. +41 22 917 2874 Fax. +41 22 917 0041 E-mail: [email protected] Website: www.unece.org/trade/timber

United Nations Conference on Trade and Development (UNCTAD) Palais des Nations CH-1211 Geneva 10 Switzerland

Tel. +41 22 907 1234 Fax. +41 22 907 0043 E-mail: [email protected] Website: www.unctad.org

World Bank 1818 H Street N.W. Washington D C 20433 United States of America

Tel. +1 202 477 1234 Fax. +1 202 477 6391 E-mail: [email protected] Website: www.worldbank.org

World Trade Organization (WTO) Centre William Rappard 154 rue de Lausanne CH – 1211 Geneva 21 Switzerland

Tel. +41 22 364 9111 Fax. +41 22 364 0540 Website: www.wto.org

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Non-governmental organisations (including research institutes and think-tanks) African Timber Organization (ATO) B P 1077 Libreville Gabon

Tel. +241 73 2928 Fax. +241 73 4030 E-mail: [email protected]

Association Technique Internationale des Bois Tropicaux (ATIBT) 16 Avenue de Saint-Mandé F – 75012 Paris France

Tel. +33 1 43 424 200 Fax. +33 1 43 425 522 E-mail: [email protected]

Center for International Forestry Research (CIFOR) P O Box 6596 JKPWB Jakarta Indonesia

Tel. +62 251 622 622 Fax. +62 251 622 100 E-mail: [email protected] Website: www.cifor.org

Center for International Trade in Forest Products (CINTRAFOR) College of Forest Resources University of Washington Box 352100, Seattle WA 98195-2100 United States of America

Tel. +1 206 543 8684 Fax. +1 206 685 0790 Website: www.cintrafor.org

Confédération Européenne de l’Agriculture (CEA) Löwelstrasse 12 A – 1014 Vienna Austria

Tel. +43 1 534 41 529 Fax. +43 1 534 41 466 E-mail: [email protected]

European Confederation of Woodworking Industries (CEI-Bois) Allée Hof-ter-Vleest 5, Ste. 4 B – 1070 Bruxelles Belgium

Tel. +32 2 556 2585 Fax. +32 2 556 2595 E-mail: [email protected]

European Forest Institute (EFI) 34 Torikatu FIN – 80100 Joensuu Finland

Tel. +358 13 252 020 Fax. +358 13 124 393 E-mail: [email protected] Website: www.efi.fi

European Timber Trade Association (FEBO) Rue Royale 109-111 B – 1000 Bruxelles Belgium

Tel. +32 2 219 1930 Fax. +32 2 223 0781

304

A PPE N D I X 1 Fédération Européenne des Syndicats de Fabricants de Panneaux de Particules (FESYP) Rue de l’Association 15 B – 1000 Bruxelles Belgium

Tel. +32 2 223 11 44 Fax. +32 2 219 44 44 E-mail: [email protected]

Forest Stewardship Council (FSC) Avenida Hidalgo 502 Oaxaca Mexico

Tel. +52 951 46905 Fax. +52 951 46905 E-mail: [email protected] Website: www.fscoax.org

International Institute for Environment and Development (IIED) 3 Endsleigh Street WC1H 0DD, London, United Kingdom

Tel. +44 171 388 2117 Fax. +44 171 388 2826 Email: [email protected] Website: www.iied.org

International Union of Forestry Research Organizations (IUFRO) Seckendorff-Gudent-Weg 8 A – 1131 Vienna Austria

Tel. +43 1 877 0151 Fax. +43 1 877 9355 Website: www.iufro.boku.ac.at

Resources for the Future 1616 P Street N.W. Washington, D.C. 20036 United States of America

Tel. +1 202 328 5000 Fax. +1 202 939 3460 E-mail: [email protected] Website: www.rff.org

Tropenbos Foundation P O Box 232 NL – 6700 AE Wageningen Netherlands

Tel. +31 317 426 262 Fax. +31 317 423 024 E-mail: [email protected]

World Business Council for Sustainable Development (WBCSD) Route de Florissant 160 CH – 1231 Conches Switzerland

Tel. +41 22 839 3158 Fax. +41 22 839 3131 E-mail: [email protected] Website: www.wbcsd.org

World Forest Institute 4033 SW Canyon Road Portland, Oregon 97221 United States of America

Tel. +1 503 228 0803 Fax. +1 503 228 3624 Website: www.upm.com/wfi

World Resources Institute (WRI) 10 G Street N.E. (Suite 800) Washington, D.C. 20002 United States of America

Tel. +1 202 729 7600 Fax. +1 202 729 7610 E-mail: [email protected] Website: www.wri.org 305

A PPE N D I X 1 Tel. +41 22 364 9111 Fax. +41 22 364 0540 E-mail: [email protected] Website: www.panda.org/forests4life

World Wide Fund for Nature (WWF) Avenue du Mont-Blanc CH – 1196 Gland Switzerland

306

Appendix 2: Definitions

A. Forest resources1 Afforestation

Annual fellings

Annual removals

Broadleaved

Coniferous

Establishment of a forest stand by planting and/or seeding on land which was not previously classified as forest or other wooded land (non-forest land). Average annual standing volume of all trees, living or dead, measured overbark to a minimum diameter of 0 cm diameter breast height (dbh) that are felled during a given reference period, including the volume of trees or parts of trees that are not removed from the forest, other wooded land or felling site. Average annual of those fellings that are removed from the forest, other wooded land or other felling site during the given reference period. All trees classified botanically as Angiospermae. They are sometimes referred to as ‘non-coniferous’ or ‘hardwoods’. All trees classified botanically as Gymnospermae. They are sometimes referred to as ‘softwoods’.

1

Selected terms extracted from Forest Resources of Europe, CIS, North America, Australia, Japan and New Zealand, UN-ECE/FAO 2000

307

A PPE N D I X 2 Forest

Land with tree crown cover (or equivalent stocking level) of more than 10% and area of more than 0.5 ha. The trees should be able to reach a minimum height of 5 m at maturity in situ. May consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground; or of open forest formations with a continuous vegetation cover in which tree crown cover exceeds 10%. Young stands and all plantations established for forestry purposes . . . are included under forest. Forest available for wood Forest where any legal, economic, or specific supply (FAWS) environmental restrictions do not have a significant impact on the supply of wood. Includes areas where, although there are no such restrictions, harvesting is not taking place. Forest not available for Forest where legal, economic or specific environwood supply (FNAWS) mental restrictions prevent any significant supply of wood. Forest/other wooded Forest/other wooded land, which shows natural land undisturbed by forest dynamics, such as natural tree composition, man (natural forest) occurrence of dead wood, natural age structure and natural regeneration processes, the area of which is large enough to maintain its natural characteristics, and where there has been no significant human intervention or where the last human intervention was long enough ago to have allowed the natural species composition and processes to have become re-established. Gross annual increment Average annual volume of increment over the reference period of all trees, measured to a minimum diameter of 0 cm dbh. Growing stock The living tree component of the standing volume. Managed forest/other Forest and other wooded land which is managed wooded land in accordance with a formal or informal plan applied regularly over a sufficiently long period. Natural losses Average annual losses to the growing stock during the given reference period, measured to a minimum diameter of 0 cm dbh, due to mortality from causes other than cutting by man, e.g. natural mortality, diseases, insect attacks, fire, windthrow or other physical damage. Net annual increment (NAI) Average annual volume over the given reference period of gross annual increment less that of natural losses on all trees to a minimum diameter of 0 cm dbh. Other wooded land Land either with a tree crown cover (or equivalent stocking level) of 5–10% of trees able to reach a height of 5 m at maturity in situ; or a crown cover (or equivalent stocking level) of more than 10%

308

A PPE N D I X 2

Plantations

Private ownership

Public ownership Woody biomass

of trees not able to reach 5 m at maturity in situ (e.g. dwarf or stunted trees) and shrub or bush cover. Forest stands established by planting and/or seeding in the process of afforestation or reforestation. They are either of introduced species, or intensively managed stands of indigenous species, which must meet all the following criteria: one or two species at plantation, even age class, regular spacing. Forest/other wooded land owned by individuals, families, cooperatives and corporations, which may be engaged in agriculture or other occupations as well as forestry; private forest enterprises or industries; private corporations or other institutions (religious and educational institutions, pension and investment funds, nature conservation societies, etc.). Forest/other wooded land belonging to the State or other public bodies. The mass of the woody parts (wood, bark, branches, twigs, stumps and roots) of trees, alive or dead, shrubs and bushes, measured to a minimum diameter of 0 cm dbh.

B. Wood and wood products2 Bleached sulphate (kraft) pulp

Bleached sulphite pulp

Chemical woodpulp

Chips and particles

2

Woodpulp obtained by mechanically reducing coniferous or non-coniferous wood to small pieces which are subsequently cooked in the presence of sodium hydroxide cooking liquor (soda pulp) or a mixture of sodium hydroxide cooking liquor and sodium sulphite cooking liquor (sulphate pulp). The class includes bleached pulp. Woodpulp obtained by mechanically reducing coniferous or non-coniferous wood to small pieces which are subsequently cooked in the presence of a bi-sulphite cooking liquor. . . . The class includes bleached pulp. Sulphate (kraft) and soda and sulphite woodpulp except dissolving grades, bleached, semi-bleached and unbleached. Wood that has been deliberately reduced to small pieces from wood in the rough or from industrial residues, suitable for pulping, for particle board

Selected terms extracted from Yearbook of Forest Products 1993–1997, FAO 1999

309

A PPE N D I X 2

Dissolving woodpulp

Fibreboard

Fibreboard, compressed Fuelwood

Hardboard Household and sanitary paper

Industrial roundwood

Insulating board

MDF (Medium Density Fibreboard) Mechanical woodpulp

Newsprint

and fibreboard production, for fuelwood or for other purposes. Woodpulp, dissolving grades chemical pulp (sulphate, soda or sulphite) from coniferous or nonconiferous wood, or special quality, with a very high alpha-cellulose content (usually 90% or over), readily adaptable for uses other than papermaking. These pulps are always bleached. They are used principally as a source of cellulose in the manufacture of products such as synthetic fibre, cellulosic plastic materials, lacquers, explosives. A panel manufactured from fibres of wood or other ligno-cellulosic materials with the primary bond deriving from the felting of the fibres and their inherent adhesive properties. Bonding materials and/or additives may be added. It is usually flat pressed but may also be moulded. . . . Fibreboard, compressed, includes fibreboards with a density greater than 0.50 g/cm3. Wood in the rough (from trunks and branches of trees) to be used as fuel for purposes such as cooking, heating or power production. Hardboard is a type of fibreboard with a density exceeding 0.80 g/cm3. Includes absorbent paper, creped or uncreped, sometimes embossed, made from bleached or unbleached chemical woodpulp, sometimes with a mixture of pulp from waste paper or mechanical pulp. Included are towelling, facial tissue, toilet tissue, wadding disposable tissues. The commodities included are sawlogs or veneer logs, pulpwood, other industrial roundwood and, in the case of trade data, also chips and particles and wood residues. Insulating board is a type of fibreboard with a density exceeding 0.35 g/cm3 but not exceeding 0.50 g/cm3. Note: this commodity used to be labelled ‘fibreboard, non-compressed’. MDF is a type of fibreboard with a density exceeding 0.50 g/cm3 but not exceeding 0.80 g/cm3. Woodpulp obtained by grinding or milling coniferous or non-coniferous rounds, quarters, billets, etc. into fibres or through refining coniferous or non-coniferous chips. . . . It excludes exploded and defibrated pulp, and includes chemimechanical and thermo-mechanical pulp. Uncoated paper, unsized (or only slightly sized), containing at least 60% (of fibrous content) mechanical woodpulp, usually weighing not less than 40 g/m2 and generally not more than 60 g/m2 of the type used mainly for the printing of newspapers. 310

A PPE N D I X 2 Other industrial roundwood

Other paper and paperboard

Paper and paperboard

Particle board

Plywood

Printing and writing paper

Pulpwood (round & split)

Recovered paper (waste paper)

Roundwood used for tanning, distillation, match blocks, gazogenes, poles, piling, posts, pitprops, etc. Includes construction paper and paperboard, household and sanitary paper, special thin paper, wrapping and packaging paper and paperboard, and other paper and paperboard not elsewhere specified (nes). Where detail is available, statistics are given for the following two categories: household and sanitary paper (qv) and wrapping and packaging paper and paperboard (qv). The following commodities are included in this aggregate: newsprint, printing and writing paper, other paper and paperboard. A sheet material manufactured from small pieces of wood or other ligno-cellulosic materials (e.g. chips, flakes, splinters, strands, shreds, schives, etc.) agglomerated by use of an organic binder together with one or more of the following agents: heat, pressure, humidity, a catalyst, etc. Plywood, veneer plywood, core plywood including veneered wood, blockboard, laminboard and battenboard. Other plywood such as cellular board and composite board. Veneer plywood is plywood manufactured by bonding together more than two veneer sheets. The grain of alternate veneer sheets is crossed generally at right angles. Core plywood is plywood whose core is solid and consists of narrow boards, blocks or strips of wood placed side by side, which may or may not be glued together. Paper, except newsprint, suitable for printing and business purposes, writing, sketching, drawing, etc., made from a variety of pulp blends and with various finishes. Included are such papers as those used for books and magazines, wallpaper base stock, box lining and covering, calculator paper, rotonews, duplicating, tablet or block, label, lithograph, banknote, tabulating card stock, bible or imitation bible, stationery, manifold, onionskin, typewriter, poster, etc. Wood in the rough other than logs – for pulp, particle board or fibreboard. Pulpwood may be barked or unbarked and may be in the form of roundwood or splitwood. In production data, it may include the equivalent of wood chips made directly from roundwood. This commodity includes paper and paperboard which has been used for its original purpose, and residues from paper conversion. This includes 311

A PPE N D I X 2

Sawlogs and veneer logs

Sawnwood

waste and scrap collected for re-use as a raw material for the manufacture of paper and related products. Logs, whether or not roughly squared, to be sawn (or chipped) lengthwise for the manufacture of sawnwood or railway sleepers (ties). Logs for production of veneer, mainly by peeling or slicing. Sawnwood, unplaned, planed, grooved, tongued, etc., sawn lengthwise, or produced by a profilechipping process (e.g. planks, beams, joists, boards, rafters, scantlings, laths, boxboards, ‘lumber’, sleepers, etc.) and planed wood which may also be finger jointed, tongued and grooved, chamfered, rabbeted, V-jointed, beaded, etc. Wood flooring is excluded. With few exceptions, sawnwood exceeds 5 mm in thickness.

NB For production and trade in industrial wood and sawnwood, data are separated into species groups, as follows: Coniferous All woods derived from trees classified as Gymnospermae – e.g. fir (Abies), parana pine (Araucaria), deodar (Cedrus), ginkgo (Ginkgo), larch (Larix), spruce (Picea), pine, chir, kail (Pinus), etc. These are generally referred to as softwoods. Non-coniferous All wood derived from trees classified as Angiospermae – e.g. maple (Acer), alder (Alnus), ebony (Diospyros), beech (Fagus), lignum vitae (Guiacum), poplar (Populus), oak (Quercus), sal (Shorea), teak (Tectona), casuarina (Casuarina), etc. These are generally referred to as broadleaved or hardwoods. For trade, they are separated into: Non-coniferous, tropical Non-coniferous woods originating from tropical countries. Non-coniferous, other Non-coniferous woods originating from countries other than tropical. Semi-chemical woodpulp Woodpulp, chemi-mechanical and semi-chemical, obtained by subjecting coniferous or nonconiferous wood to a series of mechanical and chemical treatments, none of which alone is sufficient to make the fibre separate readily. According to the order and importance of the treatment, such pulp is variously named: semi-chemical, chemigroundwood, chemi-mechanical, etc. It may be bleached or unbleached. Unbleached sulphate Woodpulp obtained by mechanically reducing (kraft) pulp coniferous or non-coniferous wood to small pieces which are subsequently cooked in the presence of sodium hydroxide cooking liquor (soda pulp) or a mixture of sodium hydroxide and sodium sulphite cooking liquor (sulphate pulp). The class includes semi-bleached and unbleached pulps. 312

A PPE N D I X 2 Unbleached sulphite pulp

Veneer sheets

Wood residues

Wood-based panels

Woodpulp

Wrapping and packaging paper and paperboard

Woodpulp obtained by mechanically reducing coniferous or non-coniferous wood to small pieces which are subsequently cooked in a pressure vessel in the presence of a bi-sulphite cooking liquor. The class includes semi-bleached and unbleached pulps. Thin sheets of wood of uniform thickness, rotary cut, sliced or sawn, for use in plywood, laminated construction, furniture, veneer containers, etc. In production data, the quantity excludes veneer sheets used for plywood production within the country. Wood residues which have not been reduced to small pieces. They consist principally of industrial residues, e.g. sawmill rejects, slabs, edgings and trimmings, veneer log cores, veneer rejects, sawdust, bark (excluding briquettes), residues from carpentry and joinery production, etc. The aggregate includes the following commodities: veneer sheets, plywood, particle board and fibreboard compressed or non-compressed. The following commodities are included in this aggregate: mechanical, semi-chemical, chemical and dissolving woodpulp. Paper or paperboards included are the following: vegetable parchment, greaseproof and glassine paper. Papers made from pure chemical woodpulp or from a mixture of chemical woodpulp, cotton fibre pulp, treated (e.g. highly hydrated or hard beaten) to render the resulting paper resistant to oil, grease and water. Fluting medium: paper or paperboard used as medium when combining paper and paperboard for conversion into a corrugated board. Sack kraft paper: strong paper made from sulphate pulp and used in the manufacture of single or multiwall sacks. Other kraft wrapping paper: all other wrapping and packaging papers made principally from sulphate pulp. Folding boxboard: all types of paperboard used in the manufacture of folding boxes. Other wrapping and packaging paper and paperboard.

C. Engineered wood products3 Glulam

3

Glulam (glued-laminated timber) is made by gluing together horizontal layers of high strength dimen-

Selected from A glossary of engineered wood products, Canadian Wood Council 313

A PPE N D I X 2

Laminated Veneer Lumber (LVL)

Oriented Strand Board (OSB)

Parallel Strand Lumber (PSL) Waferboard

sion lumber pieces. It is used for headers, beams, girders and columns. It can be manufactured straight or curved, in a wide variety of sizes. LVL is a layered composite of wood veneers and adhesive, which like PSL is available in long lengths. The grain of each piece runs in the long direction, so it is strongest when edge loaded as a beam or face loaded as a plank. Some common uses for LVL are headers, beams, flanges for wood I-joists and scaffolding planking. Panels made from strands of wood. Two-way strength is provided by orienting the direction of the strands in different layers. The strands in the outer faces are all oriented along the long axis. Most commonly used for wall, floor and roof sheathing. (NB OSB is included with particle board in international statistics.) PSL is made from strands of wood glued together into long, wide members. It is suited for beams, columns, posts, headers and lintels. Is similar to OSB except the grain directions of the wafers are random, making strength and stiffness equal in all directions of the panel. Now largely replaced by OSB.

314

Index

acacia, 235 added value paper and paperboard products, 123 added value wood products, 3, 50, 119, 121, 191, 264, 292 afforestation, 194, 233, 257 Africa, 3, 104, 111 west coast, 12, 149 African, Caribbean and Pacific Group of States (ACP), 214 African Timber Organization (ATO), 228 afrormosia, 17, 221 Agathis, 19 agenda, 21, 240 agent, 156 agricultural posts and stakes, 13, 49, 73 air pollution, 229 alder, 20 Algeria, 137 alternative fuels, 253 aluminium, 77 Amazon Basin, 182 Amazonian process, 241

American Declaration of Independence, 13 American Forest & Paper Association (AF&PA), 244 Angiosperms, 7, 47 annual rings (growth rings), 47 apparent consumption – see consumption Araucaria, 19 Arctic Ocean, 12 Argentina, 235 ash, 19 Asian economic miracle, 289 Asia-Pacific region, 284 aspen, 20 Association of South-East Asian Nations (ASEAN), 214, 225 Australia, 104, 137, 139, 194, 199, 290 Austria, 101, 137, 178 balance of supply and demand, 110, 208, 258, 263, 287, 291, 293 balsa, 17 Baltic sea, 11 315

INDEX

Baltic States, 4, 137, 145, 179 bamboo, 18 Barbados, 12 barrels, 122 basic manufactures, 92 beech, 19 Belarus, 179 Belgium (-Luxembourg), 103, 139, 194 bending strength, 49 biodegradability, 49 biological diversity (biodiversity), 26, 35, 232, 242, 281 biomass, 253, 255 birch, 18 ash, 11 Black Death, 9, 11 black liquor, 48, 253 bleached sulphate pulp, 142, 151, 266 blocks and strips for parquet, 122 Boreal region, 256 boxes, 122 Brazil, 90, 102, 112, 139, 182, 199, 232, 235 brick-making, 9 British Columbia, 14 broadleaved (species), 7, 9, 16 Bronze Age, 9, 11 Brundtland Report, 237 builders’ woodwork, 119, 265 building demolition waste, 254 building poles, 73 built-in cupboards, 75 bulk carriers, 156 buyers’ groups, 245 by-products, 156 contaminated, 247 cabinet-making, 12, 75 California, 14 cambium, 47 Cameroon, 90, 139, 149 Canada, 18, 90, 101, 112, 137, 168, 198, 200 Canadian Standards Association (CSA), 244 Canary Islands, 12 capital costs, 203 carbon cycles, 242

dioxide (CO2), 46, 253, 255, 291 offset, 257 sequestration, 257 taxes, 257 Carboniferous Period, 7 Caribbean, 12 carvings, 75 cash crops, 12 cedar, 7 cellulose, 47 cellulose fibre, 48 Center for International Forestry Research (CIFOR), 228 Center for International Trade in Forest Products (CINTRAFOR), 228 certification, 221, 242, 243, 287 certified forest products (CFPs), 245 chain-of-custody, 242 changes in forest area, 31 changes in stocks, 53 charcoal, 253 chemical woodpulp, 116 chemicals, 88, 92, 203 Chernobyl, 253 Chicago Merchantile Exchange (CME), 211 Chile, 102, 104, 112, 134, 145, 195, 199, 235 China, 88, 90, 101 chipboard – see particle board chips – see wood chips and particles chlorophyll, 47 CITES, 221 classification, 107 climate change, 251, 255, 290 coal, 253 coal, rubber and plastic products, 88 codes, 218 commercial logging, 17, 232 Commonwealth of Independent States (CIS), 4 competition, 198, 211, 290 compressed fibreboard – see hardboard computer paper, 103 computers, 80 COMTRADE, 127 concrete shuttering, 60, 75 coniferous (species), 7, 16 coniferous industrial roundwood, 104, 131, 145, 266

316

INDEX

coniferous sawnwood – see sawn softwood construction, 9, 73, 82, 85, 260, 272 construction industry, 122 consumption of wood products, 53, 62, 66, 109, 261, 272 per inhabitant, 70 containerisation, 156 cook, 14 cooking and heating, 253 copper smelting, 9, 260 cork, 196 corporate players, 154, 157 Côte d’Ivoire, 139, 149, 197 Council for Mutual Economic Assistance (CMEA), 225 crates, 77 Cretaceous Period, 7 Crete, 10 criteria and indicators (C&I), 239, 241 Croatia, 139 cultural and graphic papers, 52, 73, 82 customs procedures, 219 cyclical trade movements, 114 Cyprus, 10 Czechoslovakia, 157 Czech Republic, 163

drums, 122 durability, 49, 77

Danzig, 11 declining markets, 200 declining suppliers, 197 decorative value, 77 deforestation, 8, 9, 15, 31, 224, 229, 255, 257, 261, 270, 281, 288 Denmark, 11, 123, 194 desertification, 18 devaluation, 209 developed countries, 23, 33, 214 developing countries, 15, 29, 35, 214, 222 developing market economies and China (DMECs), 121 Dipterocarps, 17 disease and insect attack, 77 dissolving pulp, 52, 70 distortions to trade, 219 distribution, 77 district heating and hot water, 253 do-it-yourself (D-I-Y), 75, 220 doors, 122

East Asia, 3, 111 ebony, 12, 75 ecolabelling – see labelling E-commerce, 157, 292 EFIDAS database, 127 Egypt, 10, 137 electricity, 283 electronic communication, 80, 292 El Nino, 290 emerging markets, 200 emerging suppliers, 199 emission reduction units (ERUs), 257, 291 end uses, 73, 263 energy, 73, 82, 203, 251 efficiency, 49 input, 257 prices, 290 environmental degradation, 224 Environmental Management System (EMS) – see ISO 14001 environmental non-governmental organisations (ENGOs), 220 environmental protection, conservation, 5, 28, 222, 229 Equatorial Guinea, 149 erosion, 18 Estonia, 152 ETTS I, 272 ETTS V, 272 eucalyptus, 19, 194, 235 Europe, 3, 104, 111 European Confederation of WoodWorking Industries (CEI-Bois), 228 European exploration and colonisation, 12 European Forest Institute (EFI), 228 European Union, 4, 101, 121, 225, 228 Export bans, 197 quotas, 219 EXPORTLES, 157 export restrictions, 219 exports, 92, 109 fabricated metal products, machinery and equipment, 88

317

INDEX

fast-growing plantations – see plantations fax paper, 103 felling, 154 fellings, 24 fellings to NAI ratio, 24 fencing, 49 fertilisers, 35 fibreboard, 52 fibre furnish, 142, 249, 251 fillers, 203 Finland, 85, 88, 90, 137, 170 Finnish Forest Certification scheme, 244 fir, 20 balsam, 18 Douglas, 14, 18, 235 Siberian, 18 sub-Alpine, 18 fire, resistance to, 74 First World War, 14, 261 flaxboard, 65 fluting medium, 80 folding boxboard, 80 Food and Agriculture Organization (FAO), 226, 238, 272 food-processing, 85 forest, 20 according to degree of ‘naturalness’, 26 available for wood supply (FAWS), 22, 33, 279, 287 balance, 24 boreal, 16, 18, 23, 234 clearance, 255 conservation, 281 degradation, 9, 229 ecosystem, 242, 290 fires, 24 fragmentation, 233 lowland pine, 19 management, 33, 236, 276, 282, 293 mangrove, 18 moist deciduous, 18 montane, 18 mortality, 24 natural (old growth), 152, 233, 286, 292 productive, 279 resources, 16

semi-natural, 28, 234 soil, 255 temperate, 16, 18, 23, 234 tropical, 16 types, 16 undisturbed by man, 28 well-managed, 244 Forest Stewardship Council (FSC), 228, 243 forestry and logging, 88 formaldehyde glue, 219 former USSR, 3, 104, 111, 157, 179, 273 former Yugoslavia, 198 fossil fuels, 9, 232, 282, 290 Framework Convention on Biological Diversity (FCBD), 240 Framework Convention on Climate Change (FCCC), 240, 253 France, 88, 101, 139, 149, 165 fuel cells, 253 fuelwood, 39, 49, 51, 70, 230, 254, 261, 282 functions of the forest protective, 242 productive, 242 socio-economic, 242 furniture, 12, 73, 75, 82, 85, 92, 119, 121, 272 futures markets, 211 Gabon, 149 gene bank, 17 General Agreement on Tariffs and Trade (GATT), 214 General System of Preferences (GSP), 214 Germany, 101, 139, 163, 220, 245 Ghana, 139, 149, 197 glass-making, 9 Global Forest Convention, 240 globalisation, 5, 153, 222, 288, 292 backlash, 288 gluing, 77 gold, 9, 12 Rush, 14 gopherwood, 7 governmental organisations, 226 graphic papers – see cultural and graphic papers

318

INDEX

Great Depression, 15, 261 Greece, 10, 290 greenheart, 17, 75 greenhouse gases (GHGs), 233, 253, 255 gross annual increment (GAI), 24 gross Domestic Product (GDP), 85 growing stock, 22 G7 (G8), 227 Gymnosperms, 7, 47 handling, 77, 156 Hanseatic League, 11 harbour works, 75 hardboard, 75, 140, 151 hard landing, 289 hardwood lumber – see sawn hardwood harvesting intensity, 40, 45, 237, 279 harvesting residues, 24 heartwood, 47 Helsinki Ministerial Conference of the Protection of Forests in Europe, 239 Helsinki process, 241 historical perspective, 260 Homo sapiens, 8 Hong Kong Special Administrative Region, 185 household and sanitary paper, 144 household utensils, 75 housing authorities, 220 Hungary, 189 hunting, 35 hydropower, 253 Iberian Peninsula, 10, 290 Ice Age, 8 illegal logging, 175 illicit exports and imports, 108 impact resistance, 49 impediments to trade, 220, 291 import restrictions, 201 import substitution, 250 imports, 92, 109 impregnation, 77, 236 income elasticities, 277 India, 201, 235, 286 Indian Ocean, 12 indigenous peoples, 31, 32

Indonesia, 90, 112, 139, 149, 175, 198, 232, 235, 290 industrial (round)wood, 2, 36, 40, 51, 261, 274, 279, 287, 291 Industrial Revolution, 14 industrialised countries, 15 inflammability, 49 inflation, 110, 203, 290 inland waterways, 156 insulating board, 75, 140 insulation, 49 Intergovernmental Panel on Climate Change (IPCC), 255 integration, 65, 112 industrial (mergers), 153, 163 regional, 225 international commodity trade, 90 international division of labour, 225 international environmental regulations, 221 International Forum on Forests (IFF), 228 International Institute for Applied Systems Analysis (IIASA), 228 International Institute for Environment and Development (IIED), 228 international institutions, 226 International Labour Organization (ILO), 228 International Monetary Fund (IMF), 222, 228, 288 International Organization for Standardization (ISO), 228 international politicisation of the forest and wood products sector, 288 International Technical Association for Tropical Timber (ATIBT), 228 International Trade Centre (ITC), 227 International Tropical Timber Council (ITTC), 226, 238 International Tropical Timber Organization (ITTO), 222, 226 International Union for the Conservation of Nature (IUCN), 228 Internet, 80 in-transit processing, 62, 153 investment, 215, 259, 289, 294 Ireland, 152, 200 Iroko, 17, 75

319

INDEX

Iron Age, 9 Iron-making, 9, 260 Italy, 101, 139, 149, 189 ISO 14001, 244

niche, 245 marketing and promotion, 77 Marquetry, 75 masts, 13 mechanical woodpulp, 52 Mediterranean Basin, 9, 10, 260 Medium Density Fibreboard (MDF), 60, 75, 103, 113, 140, 199 meranti, 17 Mercosur, 225 metals, 77 Mexico, 14, 85, 137, 195 Mississippi River system, 13 model airplanes, 75 molasses, 12 monetary instability, 289 monocultures, 237 Montreal process, 241 Morocco, 137 mouldings and beadings, 122 Mozambique, 198 multinational (trans-national) companies, 222 musical instruments, 75

Japan, 88, 92, 97, 101, 104, 108, 137, 140, 149, 157, 183, 284, 289 Jelutong, 17 joinery and carpentry products, 122 Jurassic Period, 7 Kennedy Round, 213 Keruing, 17 knots, 48 Königsberg, 11 Kyoto Protocol, 257 labelling, 221 labour, 203 laminated wood structures, 77 landfill, 248 Laos, 139 larch, 18 Latin America, 3, 104, 111 Latvia, 152, 189 Lebanon, 10, 139 legislation, 197, 250 Libya, 137 licensing procedures, 219 lignin, 47, 48 lignum vitae, 17, 75, 221 linerboard, 80 literacy levels, 272 Lithuania, 152 local councils, 220 lodgepole pine, 18 logging roads, 232 machines and transport equipment, 92 Madeira, 12 mahogany, 12, 17, 75, 221 Malaysia, 90, 102, 104, 139, 149, 176, 233 pensinsular, 112, 176 manufactures of wood and paper products, 9 maritime powers, 261 market access, 213 for certified wood products, 245

Napoleonic Wars, 13 natural losses, 24 nature conservation, 287 Neolithic Period, 9 net annual increment (NAI), 22, 282 net imports, 277 Netherlands, 88, 101, 139, 191, 220, 245, 251 New England, 12 new housing, 77 new non-residential construction, 77 new products, 199 New World, 12 newsprint, 80, 113, 142, 152, 266 New Zealand, 102,104, 134, 145, 195, 199, 235, 282 niangon, 17 Nigeria, 149, 197 Noah’s ark, 7 non-compressed fibreboard – see insulating board non-coniferous industrial roundwood, 104, 134, 149, 266 non-coniferous sawnwood – see sawn hardwood

320

INDEX

non-governmental organisations (NGOs), 228, 288 non-tariff barriers, 213, 215, 246, 288, 291 non-tariff measures (NTMs), 215 non-wood goods and services, 33, 281, 294 Nordic countries, 75 North Africa, 10 North America, 3, 104, 111 North American Free Trade Agreement (NAFTA), 214, 225 North Sea, 11 Northern coniferous belt, 18 Northern spotted owl, 211, 233 Norway, 11, 194 nuclear fusion, 253 nuclear power, 253, 290 nutrients, 17 oak, 13, 19 obeche, 17 oil, 290 oil price shocks, 15, 114 okoumé, 17 old growth forest – see forest, natural opening up of forests, 199 opepe, 75 Organization for Economic Cooperation and Development (OECD), 85, 119, 228 Organization of Oil Exporting Countries (OPEC), 290 Oregon, 14 Oriented Strand Board (OSB), 59, 103, 109, 140, 199, 211 Other Asia-Pacific, 3, 104, 111 other fibre pulp, 250 other industrial roundwood, 51 other paper and paperboard, 53, 144, 152, 266 other wooded land, 20 outlook, 259, 272 over-exploitation, 196 overheads, 203 ownership of forests, 32, 236 by industry, 237, 279 private, 32, 45, 237, 279 public, 26, 32, 237, 279 oxygen, 47

Pacific Basin, 13, 261 Pacific Rim, 182, 183 packaging, 74, 77, 82, 156, 254 packaging regulations, 219 packing cases, 122 Paleolithic Period, 9 pallets, 74, 80, 122, 254 Panama Canal, 14, 261 Pan-European Forest Certification Scheme (PEFC), 244 paper and paperboard, 3, 50, 52, 54, 107, 109, 112, 274 paperless office, 80, 201 paper-making, 14, 249 by hand, 14 mechanised, 14, 261 Papua New Guinea, 104, 149, 199 papyrus, 14 parquet panels, 122 particle board, 51, 58, 140, 151, 266 pattern of exports, 104 pattern of imports, 107 pencils, 75 Permian Period, 7 pesticides, 35 pests and diseases, 24 Philippines, 139, 149, 197 phloem, 47 photocopy paper, 103 photosynthesis, 46 phytosanitary standards – see plant health standards Pilgrim Fathers, 13 pilings, 70 pine, 235 Jack, 18 maritime, 196 Ponderosa, 18 Radiata, 19, 282 Scots, 18, 77 Siberian, 18 western white, 18 pine nematode, 219 pitch, 11 pitprops, 49, 70, 103, 200 plantations, 5, 28, 29, 45, 134, 152, 199, 233, 236, 261, 270, 279, 282, 287, 292 plant health standards, 219 plastics, 77 plywood, 51, 55, 113, 139, 150, 266

321

INDEX

Podocarpus, 19 Poland, 90, 139, 157 poles, 49, 70 policy makers, 260, 288 political instability, 198, 288 poplar, 235 Portugal, 102, 196 pottery making, 9 poverty trap, 224 prices, 203, 272, 287 current, 204 deflated, 204 relative, 208 primary conversion, 154 primary processed wood products, 121 primary processing, 154 primary sector, 84 printing and publishing, 85 printing press, 14 printing and writing paper, 52, 80, 113, 144, 152, 266 privatisation, 33 production of wood products, 53, 58, 109, 261 for domestic use (PDU), 62 for export, 62 projections, 260 protectionism, 288 pulping liquors – see black liquors pulpwood, 108, 134, 251 quantitative restrictions on imports, 218 random length lumber, 211 rayon, 70 rays, 48 recolonisation, 9 recovered paper – see waste paper recovered wood, 254 recreation and leisure, 35, 287 recycling, 246 redwood, 18 reforestation, 193, 233, 257 removals, 24, 36, 232, 277 Renaissance, 14 Republic of Korea – see South Korea residential upkeep and improvements, 77

residues, 246 industrial wood, 247, 254 logging, 246 post-consumer, 248 resin canals, cavities, 48 resources for the future, 228 restitution, 33 Riga, 11 roll-on roll-off, 156 Roman Empire, 10 Romania, 90 roof trusses, 155 rosewood, 12, 17, 75, 221 roundwood, 51 royalties – see stumpage rum, 12 Russia, 12 Russian Federation, 80, 88, 90, 137, 145, 179 Far East, 286, 290 salt-drying, 9 sandalwood, 12 sapele, 17 sapwood, 47 Saudi Arabia, 139 sawlogs and veneer logs, 108, 134, 203, 286 sawmilling technology, 12 sawn hardwood, 51, 55, 139, 150, 205, 266 sawn softwood, 51, 55, 128, 137, 150, 266 sawnwood, 3, 50, 51, 54, 104, 108, 273 Scandinavia, 14 Second World War, 15, 261 secondary fibre, 142 secondary sector, 84 secondary processed wood products, 119 secondary processing, 154 self-sufficiency, 66 semi-chemical woodpulp, 52 sequoia, 18 seraya, 17 servicing of foreign loans, 289 shifting cultivation, 17, 31, 230 ship- and boat-building, 9, 75, 260 shipping – see packaging

322

INDEX

ships’ masts, 13 silver, 12 smelting, 9 Singapore, 102, 139 slave trade, 12 sleepers (railway ties), 13, 200 small-sized wood, 251 soft landing, 289 softwood lumber – see sawn softwood solar energy, 253 Solomon Islands, 149 South Africa, 112, 195, 199 South-east Asian countries, 289 South-East Asian Lumber Producers Association (SEALPA), 228 South Korea, 85, 108, 157, 193, 215, 235, 251, 284 Spain, 139, 194 specialisation, 65, 225, 292 specialist magazines, 80 spices, 12 springwood (earlywood), 48 spruce, 235 black, 18 Engelmann, 18 Norway, 18 Sitka, 200 white, 18 Standard International Trade Classification (SITC) SITC Rev. 2, 127 SITC Rev. 3, 127 Standardisation, 211 health and technical, 218 Statement on Forestry Principles, 240 steamboats, 9 strategic wood reserve, 234 strength-to-weight ratio, 49 stocks – see changes in stocks stumpage, 219 subsidies, 219 substitution, 245, 276 sugar, 12, 261 sulphate and soda pulp, 52 sulphite pulp, 52 summerwood (latewood), 48 surface treatment, 77 sustainable development, 237 Sustainable Forest Initiative (SFI), 244

sustainable forest management (SFM), 36, 233, 238, 287, 288 sustainability, 26, 237, 282 sustained yield, 211, 238, Sweden, 12, 85, 123, 137, 173 Switzerland, 194 Syria, 10 Taiwan Province of China, 185 tar, 11 Tarapoto process – see Amazonian process tariff escalation, 214 tariffs, 201, 213, 291 bound, 215 ceilings, 218 quotas, 218 unbound, 218 tax concessions, 219 teak, 12, 17 technological adopters, 224 innovators, 224 telegraph poles, 73 television, 80 temperate and boreal developed countries (TBDCs), 23 tertiary processing, 154 tertiary sector, 84 textiles, 85 Thailand, 88, 103, 139, 196 thinnings, 251 ties – see sleepers timber – see wood products Timber Committee, 227 timber engineering, 77 timber-frame construction, 74 timber-mining, 197 Tokyo Round, 213 ‘top 20’ exporting countries, 101, 158 ‘top 20’ importing countries, 101, 158 toys, 75 trade flows, 144, 152, 265 inter-regional, 131, 144, 266 intra-regional, 65, 144, 265 liberalisation, 201, 214, 288, 291 patterns, 126, 128, 293 trends, 126

323

INDEX

trading structures, 154 transportation, 77, 155, 257, 291 transport vehicles (road and rail), 75 trends, 265 in export unit values, 116 in trade, 109 in value of trade, 110 in volume of exports, 112 Triassic Period, 7 Tropical Forestry Action Programme (TFAP), 243 tropical hardwoods, 220 tundra, 256 Tunisia, 137 Turkey, 10 two-way trading, 65, 225, 292 urbanisation, 283 Ukraine, 179 UNEP/FAO initiative on sub-Saharan, dry-zone countries, 241 Union pour le Commerce des Bois Tropicaux dans la C.E.E. (UCBT), 228 United Arab Emirates (UAE), 139 United Kingdom (UK), 11, 14, 88, 101, 123, 139, 187, 220, 245 United Kingdom Woodlands Assurance Scheme (UKWAS), 244 United Nations Commission on Sustainable Development (UNCSD), 228 United Nations Conference on Environment and Development (UNCED), 239 United Nations Conference on the Human Environment, 240 United Nations Conference on Trade and Development (UNCTAD), 214, 226 United Nations Economic Commission for Europe (UNECE), 227, 272 United Nations Industrial Development Organization (UNIDO), 228 United Nations Statistical Office (UNSTAT), 128 United States of America (USA), 137, 139, 161, 220, 289, 290

Alaska, 18 eastern, 9, 13 Lake States, 13 mid-west, 13 Pacific north-west, 204 west coast, 13 Uruguay Round, 213 utile, 17 Vancouver Island, 14 veneer sheets, 51 versatility, 49 virgin fibre, 247, 251 wall units, 75 walnut, 75 war, 10 Washington, 14 waste, 246 disposal, 81 waste paper, 3, 39, 50, 80, 82, 112, 246, 248, 266 277, 287 recovery, 219, 249 recycling, 219 West Indies, 12 western red cedar, 18 wildlife habitats, 33, 233 wind energy, 253 windows, 77, 122 wine casks, 13 wood chemical composition of, 48 chips and particles, 51, 104, 113 hardness, 49, 77 harvest, 36 permeability, 49 post-consumption residues, 82 preservation, 219 processing capacity, 42 processing industries, 263, 293 processing sector, 85, 264 production, 33, 291 products, 50, 98, 293 products balances, 62 properties, 46 raw material, 3, 22, 50, 104, 108, 290 residues, 39, 51, 104, 277, 287 resources, 16, 261

324

INDEX

structure, 46, 48 stability, 49 transformation, 50 used in the round, 72 wood-based panels, 3, 50, 51, 54, 107, 108, 112, 274 wood-containing paper, 80 wood-free economic growth, 201 wood-free paper, 80 woodpulp, 221 workability, 49 World Bank, 222, 228, 288

World Resources Institute, 228 World Trade Organization (WTO), 214, 222, 228, 288 World Wide Fund for Nature (WWF), 228 wrapping and packaging paper and paperboard, 53 xylem, 47 yang, 17 yields, 287

325