Global Wood Markets: Consumption, Production and Trade

1 Global Wood Markets: Consumption, Production and Trade By Ed Pepke Forest Products Marketing Specialist unece /FAO Timber Section Geneva, Switzerland International Forestry and Global Issues 18 May 2010, Nancy, France Presentation topics I. Introduction II. Where is the supply? Global forests III. Where is the Production ? Where is the demand? IV. Forest products Trade Primary Secondary V. Conclusions VI. Discussion International Forestry and Global Issues 18 May 2010, Nancy, France I. Introduction Why's this important? Trends in demand and supply of wood products Geographical shifts in Production , consumption and Trade Position of Europe in Global markets What forest products? Wood vs non-wood Traditional and new products Topical issues Traditional, Trade disputes New, subsidies for wood energy International Forestry and Global Issues 18 May 2010, Nancy, France II. Global forests and forest products International Forestry and Global Issues 18 May 2010, Nancy, France Forests and deforestation 3 Asia &.

2 Pacific Net forest loss: 2 1990s million ha/year Europe 2000-2010 million ha/year 1. Million hectares 0. North -1 Mideast America -2. -3. -4. Africa -5 S. America Central America Sources: FAO Global Forest Resources Assessments 2000, 2005, Natural Plantation Total 2010. International Forestry and Global Issues 18 May 2010, Nancy, France 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 International Forestry and Global Issues 18 May 2010, Nancy, France Global roundwood harvests Source: State of the World's Forests, 2009, FAO. International Forestry and Global Issues 18 May 2010, Nancy, France World roundwood vs fuelwood Of billion m3, slightly more than half Billion m3. is used as woodfuel. 61. 99. 63. 65. 67. 69. 71. 73. 75. 77. 79. 81. 83. 85. 87. 89. 91. 93. 95. 97. 01. 03.

3 05. 07. International Forestry and Global Issues 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 19. 20. 20. 20. 20. 18 May 2010, Nancy, France Industrial roundwood Woodfuel Source: FAOStat, 2009. Woodfuel use Increasing in developed world, but efficient, environmentally sound combustion. Inefficient domestic heating and cooking International Forestry and Global Issues 18 May 2010, Nancy, France Modern wood energy Efficient, clean combustion Carbon neutral Renewable energy Market outlet for low-grade fiber International Forestry and Global Issues 18 May 2010, Nancy, France 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 International Forestry and Global Issues 18 May 2010, Nancy, France Production and consumption of wood pellets North American Production 7000. North American Consumption 6000.

4 Pellet Production (1000 tons). European Consumption 5000 Other Consumption Total Consumption 4000. 3000. 2000. 1000. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010. Source: unece /FAO. Forest Products Annual Market Review, 2008- 2009. International Forestry and Global Issues 18 May 2010, Nancy, France unece region = Europe + N. America + CIS. Source: Worldmapper International Forestry and Global Issues 18 May 2010, Nancy, France unece roundwood harvests trends Europe Source: unece /FAO. TIMBER Database, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France Forest resources growing stock 70. 60. 50. Billion m3. 40. 30 s 20. 10. 0. Europe (41) North America CIS. Grow ing stock Net annual increment Fellings Source:Temperate and Boreal Forest Resources Assessment 2000. International Forestry and Global Issues 18 May 2010, Nancy, France Net annual growth vs fellings 1. 0 .9. 0 .8. 0 .7. 0 .6. Billion m3. 0 .5. 0 .4. 0 .3. 0 .2. 0 .1. 0. E u ro p e (4 1 ) N.

5 A m e ric a C IS. N e t a n n u a l in c re m e n t F e llin g s Source:Temperate and Boreal Forest Resources Assessment 2000. International Forestry and Global Issues 18 May 2010, Nancy, France Forests increasing in unece region Fellings as % of annual growth Central Europe 61%. Nordics & Baltics 72%. Northwest Europe 53%. Southeast Europe 45%. EU 27 60%. Russia 34%. North America 80%. Sources: State of the World's Forests, 2007 and unece /FAO Forest Resources Assessment International Forestry and Global Issues 18 May 2010, Nancy, France Increasing forests & increasing demands Increasing demand for paper and paper products, packaging Increasing demand for wood products Increasing demand for wood energy = competition! Where will wood come from? International Forestry and Global Issues 18 May 2010, Nancy, France III. Consumption and Production International Forestry and Global Issues 18 May 2010, Nancy, France World shaped by political boundaries Source: Worldmapper International Forestry and Global Issues 18 May 2010, Nancy, France World shaped by population Source: Worldmapper, 2009.

6 International Forestry and Global Issues 18 May 2010, Nancy, France World shaped by forest products Production Sources: Worldmapper & FAOStat, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France World shaped by wood and paper consumption Sources: Worldmapper & FAOStat, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France As shaped by forest products exports Sources: Worldmapper & FAOStat, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France As shaped by forest products imports Sources: Worldmapper & FAOStat, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France Western European wood and fiber requirements through 2020. 800. Recovered paper 700 Net pulp imports Gap is residues Amount (in million cubic metres WRME). Industrial roundwood 600 Total wood and fibre requirement 500 Growing demand without energy 400. 300. 200. 100. 0. 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020.

7 Year Source: unece /FAO. International Forestry and Global Issues European Forest Sector 18 May 2010, Nancy, France Outlook Study, 2005. Industrial roundwood consumption 900. 800. 700. Africa 600. Million m3. Americas 500. Asia 400. Europe 300. Oceania 200. 100. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Industrial roundwood Production 900. 800. 700. Africa 600. Million m3. Americas 500. Asia 400. Europe 300. Oceania 200. 100. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Sawnwood consumption 250. 200. Africa Million m3. 150 Americas Asia 100 Europe Oceania 50. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Sawnwood Production 250. 200. Africa Million m3. 150 Americas Asia 100 Europe Oceania 50.

8 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Panels Production 140. 120. 100 Africa Million m3. Americas 80. Asia 60. Europe 40 Oceania 20. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Panels consumption 120. 100. Africa 80. Million m3. Americas 60 Asia Europe 40. Oceania 20. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Paper & paperboard consumption 180. 160. 140. Million metric tons Africa 120. Americas 100. Asia 80. Europe 60. Oceania 40. 20. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Paper & paperboard Production 160. 140. Million metric tons 120. Africa 100 Americas 80 Asia 60 Europe Oceania 40.

9 20. 0. 2000 2001 2002 2003 2004 2005 2006 2007 2008. Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France What happens when supply does not equal demand? IV. Trade International Forestry and Global Issues 18 May 2010, Nancy, France Global Trade all products Doubled in 6 years Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France Global roundwood exports Globally exports = imports in value and volume, but not in Europe leads in roundwood direction! exports (including within Europe). Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France N. American roundwood exports USA increasing roundwood exports Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France CIS roundwood exports, mainly Russia Trend reversal in 2008. Log export taxes Global economic crisis Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France African and Asian roundwood exports Rising despite policies to encourage value-added processing Source: FAOStat, 2010.

10 International Forestry and Global Issues 18 May 2010, Nancy, France North American exports Housing crisis Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France US housing starts, 2002-2013. 2. Million units 1. 0. 20. 20. 20. 20. 20. 20. 20. 20. 20. 20. 20. 20. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. Source: APA The Engineered Wood Association, 2009. International Forestry and Global Issues 18 May 2010, Nancy, France 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 International Forestry and Global Issues 18 May 2010, Nancy, France European exports 2x in 10 years Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France CIS exports, mainly Russia 4x in 10 years Log export taxes Source: FAOStat, 2010. International Forestry and Global Issues 18 May 2010, Nancy, France 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 International Forestry and Global Issues 18 May 2010, Nancy, France Secondary-processed products exports Source: FAOStat, 2010.