international forestry and global issues 17 april 2012, nancy, france © european forest institute,...

International Forestry and Global Issues17 April 2012, Nancy, France© European Forest Institute,

2012

By Ed PepkeSenior Timber Trade Analyst

EU FLEGT FacilityEuropean Forest Institute

Global Wood Markets:Consumption, Production and Trade

International Forestry and Global Issues17 April 2012, Nancy, France

ContentsI. IntroductionII. Global forests and forest products

(supply)III. Consumption and production (demand)IV. TradeV. Trade conclusisonsVI. Discussion

© European Forest Institute, 2012


I. Introduction

• Why’s this important?• What forest products?

– Wood vs non-wood– Traditional and new products

• Topical issues– Traditional, e.g. trade disputes– New, e.g. subsidies for wood energy


Wood products consumption & trade questions• Has continuous increase in wood demand and the growing global timber trade

had positive or negative effects on the world’s forests? • Socio-economic effects? Will the forest sector continue to play an important role

in providing livelihoods for rural communities? • Deforestation exists globally – where is it and is it going up or down?• If we grow more wood than we cut, could we cut more than we grow and still be

sustainable?• Wood fuel consumption peaked in the US in 1970s; how can the world use most

harvested wood for fuel?• Will laws against illegal logging and against trade of illegal wood reduce wood

demand?


II. Global forests and forest products


Forests and deforestation

Europe

Asia &Pacific

AfricaS. America

MideastNorth

America

Central America

Sources: FAO Global Forest Resources Assessments 2000, 2005, 2010

Series1

-5

-4

-3

-2

-1

0

1

2

3

Natural Plantation Total

Mill

ion

he

cta

res

Net forest loss:1990s 8.3 million ha/year2000-2010 5.2 million ha/year

Annual net loss of forest area between 2000-2005 was 7.3 million ha/year


Why deforestation?

• Conversion to other uses: agriculture, palm oil, pasture, urbanization

• Fire, insects, disease• Root causes: poverty, firewood, illegal logging• Offset by plantations and natural expansion• Positive trend of a negative issue


2012

• Consumer confusion• Lack of confidence in specifying, buying• Increasing regulations

– Logging bans– Log export bans– Trade regulations, e.g. FLEGT, EU Timber

Regulation• Need for better governance, legislation, programs,

certification, legality assurances

What does global deforestation mean?


Europe23.7%

US21.1%

Canada9.5%CIS

9.5%

Rest of World36.1%

Global roundwood harvests


2012

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

0.00.51.01.52.02.53.03.54.0

Industrial roundwood Wood fuel

Bill

ion

m3

Global roundwood consumption

Of 3.5 billion m3 total, more than half is used as wood fuel.

Source: FAO Stat, 2011.


Increasing in developed world, but efficient, environmentally sound combustion.

Woodfuel use

Inefficient domestic heating and cooking


Modern wood energy

• Efficient, clean combustion• Carbon neutral• Renewable energy• Market outlet for low-grade fiber


Modern wood energy

• Processed fuels– Not bulky firewood– Conveyable chips (high moisture)– Dry, high calorie pellets and briquettes

• Next…– Biorefineries: pulp, energy, chemicals– Liquid and gaseous fuels


0

1000

2000

3000

4000

5000

6000

7000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

North American Production

North American Consumption

European Consumption

Other Consumption

Total Consumption

Pel

let P

rod

uct

ion

(100

0 to

ns)

Production and consumption of wood pellets


Europe

Roundwood harvest trends


2012

Europe (41)

North America

CIS0

10000200003000040000500006000070000

Growing Stock

Net Annual Increment

Fellings

Million

m

3

Source: UNECE/FAO, 2010.

Growing stock vs. AnnuaI growth vs. Fellings


2012

NAI vs. Fellings

Europe (41) N. America CIS0

200

400

600

800

1000

Net Annual Increment

79%

36%

64%

Source: UNECE/FAO, 2010.

Million

m3


Increasing forests & increasing demands

• Increasing demand for paper and paper products, e.g. packaging

• Increasing demand for wood products• Increasing demand for wood energy• = competition!• Where will wood come from?


III. Consumption and production


World shaped by political boundaries

Source: Worldmapper


World shaped by population

Source: Worldmapper, 2009


World shaped by forest products production

Sources: Worldmapper & FAOStat, 2009


World shaped by wood and paper consumption



As shaped by forest products exports



As shaped by forest products imports


Western European wood and fiber requirements through 2020

0

100

200

300

400

500

600

700

800

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Year

Am

ou

nt

(in

mil

lio

n c

ub

ic m

etre

s W

RM

E)

Recovered paper

Net pulp imports

Industrial roundwood

Total wood and fibre requirement

Growing demand without energy

Gap is residues

Source: UNECE/FAO European Forest Sector

Outlook Study, 2005


2012

Industrial roundwood consumption

Mill

ion

m3

Source: FAOStat, 20122000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

100

200

300

400

500

600

700

800

900

AfricaAmericasAsiaEuropeOceania


Industrial roundwood production

Source: FAOStat, 20102000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

100

200

300

400

500

600

700

800

900


Mill

ion

m3


Sawnwood consumption

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

50

100

150

200

250


Mill

ion

m3


Sawnwood production

Mill

ion

m3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

50

100

150

200

250



Sawnwood exports

Mill

ion

m3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

10

20

30

40

50

60

70

80

90



Sawnwood imports

Mill

ion

m3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

100

200

300

400

500

600



Panels consumption

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

160


Mill

ion

m3


Panels production

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

160


Mill

ion

m3


Paper & paperboard consumption

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

160

180

200


Mill

ion

m3


Paper & paperboard production

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

160

180

200


Mill

ion

m3


What happens when supply does not equal demand?

IV. Trade


Global trade all products

Doubled in 6 years2001-2007

Source: FAOStat, 2010


Primary-processed products• Sawnwood• Panels

– Plywood– Particleboard– OSB, MDF

• Veneer• Paper & paperboard

Secondary-processed products• Furniture• Millwork (windows &

doors)• Mouldings• Etc. made from primary

products



2012

Bill

ion

$

Global trade, primary products


Europe (including Russia) leads in roundwoodExports. Includes within Europe.

Global roundwood exportsGlobally exports = imports in value and volume, but not in direction!

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

OceaniaEuropeAsiaAmericasAfrica

Mill

ion

m3


N. American roundwood exports

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

500

1000

1500

2000

2500

United StatesCanada

USA increasingroundwood

exportsMill

ion

m3


2012

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

PanelsWood pulpWood fuelSawnwoodPaper and paperboardIndustrial roundwood

Mill

ion

$

Russian exportsTrend reversal in 2008

• Log export taxes

• Global economic crisis


African and Asian roundwood exportsSlowly rising despite policies to encourage value-addedprocessing


Housing crisis

North American exports


US housing starts, 2002-2013

0

0.5

1

1.5

2

2.5

Mill

ion

units

US housing collapse has global effects.


Impacts of US housing crisis

• Global economic crisis (a cause)• Massive restructuring of N. American wood industry

(unemployment)• Local communities devastated• Long-term consequences for forest sector


2x in 10 years

European exports


4x in 10 years

Log export taxes

CIS exports, mainly Russia


Exporting primary vs secondary

• Primary (logs, sawnwood, panels, pulp) are commodity products– Easy to export– Correspond to market price

• Secondary, value-added products– Higher value and profits– Require greater manufacturing and marketing skills


Secondary-processed products exports


Based on domestic and imported roundwoodWorld’s largest exporter of wooden furnitureand other secondary-processed products

5x in 10 years,no downturn in 2008

China is the motor!


2012

China’s roundwood: Imports vs. domestic production

Sources: FAOStat and UNECE/FAO estimates, 2010.

2003 2004 2005 2006 2007 2008 20090

20

40

60

80

100

120

Domestic Imports

71%domestic

2/3 from Russia

Million

m3

Russian

exporttaxes


Paper products exports


Panel exports


Sawn softwood exports


V. Trade conclusions• Global timber trade doubled over last decade• Greatest increase in secondary-processed products• Slowdown in 2008, 2009 with global economic crisis • China became largest roundwood importer and

largest secondary-processed products exporter• Trade barriers distort markets

– Export taxes, subsidies, tariff and non-tariff– Intentionally for national reasons– Consequences for partners’ forest sector


VI. Discussion


www.euflegt.efi.int


Ed PepkeSenior Timber Trade Analyst

EU FLEGT FacilityEuropean Forest Institute

[email protected]

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international forestry and global issues 17 april 2012, nancy, france © european forest institute,...

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