c *
Forestry Commission
Revised Forecasts of the
Supply and Demand for
Wood in the United Kingdom
Adrian Whiteman
Forestry Commission
ARCHIVE
r
FORESTRY COMMISSION TECHNICAL PAPER 19
Revised Forecasts of the Supply and Demand
for Wood in the United Kingdom
Adrian Whiteman
Economist, Forestry Commission
FO RESTRY CO M M ISSIO N , EDIN BU RGH
i
© Crown copyright 1996
First published 1996
ISBN 0 85538 346 1
FDC 721:792: (410)
K E Y W O R D S: Econom ics, Forestry, Wood utilisation
ACKNOWLEDGEMENTS
The author is grateful to the m any people w ho have provided help w ith data and
com m ents on this study. In particular, A. J. Grayson provided m any com m ents on
the ea rlier p ap er on w h ich this is b a sed , and C. J. S. Burd h as offered m any
com m ents on this revision. D. B. H enderson-H ow at, D. Thom pson, D. Grundy,
FI. Insley, and m em bers of the HGTAC Supply and Dem and Sub-com m ittee also
helped by com m enting on this and the earlier paper, and W. T. W ilson provided
the figures for N orthern Ireland.
Front cover: Photographs courtesy of Forest Life Picture Library
A note on data sources
Figures on prices, consum ption and production covering the period 1956-86 were
obtained from the Yearbook o f fo rest products (United N ations, 1988 and earlier).
M ore recent volum es of this yearbook were used to com pare the forecasts w ith
outturns over the period 1987-92. The forecast of future wood supply com es from
Forestry C om m ission sources supplem ented by inform ation from the N orthern
Ireland Forest Service. Due to different classification system s, and the difference
betw een statistics applying to the U nited K ingdom and those for G reat Britain
only, som e of the figures derived from United N ations sources do not m atch those
presented in Forestry C om m ission publications (e.g. Forestry C om m ission Facts
and figures).
Please address enquiries about this publication to:
The Research Com m unications Officer
Forestry C om m ission Research Division
A lice H olt Lodge
W recclesham , Fam ham
Surrey GU 10 4LH
CONTENTS
Page
A c k n o w le d g e m e n ts
ii
A n o te o n d a ta s o u rc e s
ii
S u m m ary
iv
1.
Introd u ction
1
2.
T h e m arket for w ood
2
3.
Future dem and for w ood products
5
4.
T h e future su pply of roundw ood
12
5.
T h e com bin ed su pply and dem and forecast
15
R e fe r e n c e s
20
Summary
This paper is a revision to an earlier paper on the sam e subject (W hitem an, 1991). It
presents m odels of wood supply and w ood product dem and for the United Kingdom
to the year 2050. The m odel of wood supply presented in the paper is based on the
m ost recent production forecast for Great Britain (1996) and N orthern Ireland. The
m odels of w ood product dem and are based on an econom etric study of consum ption
over the period 1956-86.
M ost of the new m aterial presented in the paper is concerned w ith the forecast of
tim ber supply. This has been adjusted to take into account m ore recent inform ation
about trends in planting, felling and m anagem ent practices, and the sensitivity of the
forecast to a variety of econom ic and policy-related factors has also been exam ined.
The m odels of wood product dem and used in the paper have not been changed, but
the forecasts have been updated to take into account new projections of explanatory
variables and changes in the conversion factors used to get from product volum es to
standing tim ber volum es. The paper also exam ines the effect of w ood residues and
paper recovered for recycling on the supply and dem and balance.
The forecasts show that it is likely that w ood supply will increase with dem and up to
2025. After that, if no new planting is undertaken, supply will fall w hile dem and will
continue to rise, although the forecast of dem and after 2025 is subject to a w ide margin
of uncertainty. In practice, both new planting and efforts to reschedule production
m ay have the effect of reducing the peak in production. A continuous level of supply
would be desirable for the developm ent of the dom estic wood processing industry, so
the paper also exam ines the level of new planting that w ould be required to bring this
about.
iv
Chapter 1
Introduction
The first m ajor study of the UK w ood m arket
w a s T h e w o o d p r o d u c t io n o u t lo o k in B r ita in
(Forestry C om m ission, 1977). A later study of
w ood supply and dem and in Europe published
b y th e E c o n o m ic C o m m is s io n fo r E u ro p e
(U nited N ations, 1986) also included a section
on U K su p p ly and d em a n d , b u t in o n ly an
abbreviated form (a revision to this publication
is also cu rren tly b ein g p rep ared ). T he m ost
recen t stu dy o f U K su pply and d em and w as
published in 1991 (W hitem an, 1991).
rev ise the su p p ly and dem and fo recasts, and
this publication is the result of that exercise.
The rem ainder of the paper is in four sections.
C h ap ter 2 describes the m arket for w ood and
outlines the main features of supply and demand
in the UK. C hapter 3 sum m arises the dem and
m odels that w ere con stru cted p reviou sly and
discusses the changes that have been made to the
demand projections in this paper. The forecasts
are then presen ted at the end of this chapter.
C hapter 4 presents the revised supply forecast,
and discusses the sensitivity of the forecast to a
range of scen arios about future tim ber prices,
forest growth, and harvesting policies. The final
chapter compares future supply and demand in
te rm s o f w o o d raw m a te r ia l e q u iv a le n ts
(WRME), taking into account the supply of wood
residues from the saw m illing industry and the
availability of paper recovered for recycling. This
chapter also discusses some of the policy implic­
ations of the future supply and demand balance.
The 1991 study proved to be quite popular, and
was quoted m any tim es by the forest industry
and forestry press. M uch of the interest in the
s tu d y c e n tr e d a ro u n d th e su p p ly fo r e c a s t
it c o n ta in e d a n d in p a r t ic u la r , th e p o lic y
im p lic a tio n s o f the p ea k in w oo d su p p ly it
show ed occurring in about 30 years time. Since
th e n , n ew d ata h av e b eco m e a v a ila b le w ith
which the harvesting plans of the U K forestry
sector can be p red icted , so it w as d ecided to
1
Chapter 2
The market for wood
conversion factors. In this paper, 11 categories of
fin ish e d w oo d p ro d u ct are a n a ly sed . T h ese
categories are based upon the FAO classification
of forest products (see United Nations, 1988, for a
m ore detailed description of what each category
c o n ta in s ). F ig u re 1 sh o w s th e re la tio n s h ip
betw een roundw ood supply and each of these
products; no distinction is m ade betw een hom e
grown and im ported timber in this diagram.
W ood an d w o o d p r o d u c ts h a v e p la y e d an
im p o rtan t and v aried role in h um an activity.
A n e a rly ex a m p le o f in d u stria l u se w as the
prod uction of charcoal for iron sm eltin g, and
the use of wood as fuel is still crucial in many
parts of the w orld today. N ow adays, w ood is
n e e d e d fo r m a n y in d u s t r ia l an d d o m e s tic
purposes in the UK w here, on the basis of the
revised inform ation in this paper, every person
co n su m es the e q u iv a le n t o f a b o u t 1.3 cu b ic
m etres of wood each year.
T h e m a rk e t fo r w ood p ro d u c ts in th e U K is
characterised by a large im port sector and, w ith
the exception of som e of the panel products, a
large num ber of firm s supplying the relatively
sm all p rop ortion o f dem and m et by d om estic
production. Figure 2 show s the total supply and
dem and balance for w ood and w ood products
in the U K , and sh ow s that self-su fficien cy in
w ood prod ucts (exclu d in g m aterial recovered
for recycling) stood at about 10.5% in the years
1989-91.
For som e prod ucts such as fuelw ood or fence
posts, the conversion from standing tree to end
p roduct is sim ple. There are, how ever, m any
products - ranging from floor joists to high quality
writing paper - that require a series of industrial
processes, creating important m arkets for inter­
m e d ia te p r o d u c ts . C o n s u m e r d e m a n d fo r
finished products depends, am ong other things,
on incom e, prices of the product and substitutes
for it, and tastes. Even w here the finished pro­
duct is used by industry, ultim ate dem and for
th e ro u n d w o o d fro m w h ic h it is d e riv e d
depends upon the consum er because consum er
dem and determ ines the level of activity in that
industry.
Su ch a h ig h le v e l o f im p o rts m ean s th at the
dom estic price of w ood is effectively set by the
world price (i.e. the UK is a price-taker on world
m arkets). This, in turn, determ ines the level of
d om estic dem and w h ich then d eterm in es the
am ount of w ood im ported each year. Price may
also affect d om estic su pply b u t, as C h ap ter 4
w ill dem onstrate, the effect of price changes on
dom estic supply is only slight in com parison to
the total dem and for wood. Because dom estic
supply is very sm all com pared to w orld supply,
it also has little im pact on w orld timber prices.
This m eans that UK w ood supply and demand
can be m odelled as separate system s, because
one does not affect the other through the price
mechanism .
In o rd e r to m o d e l d e m a n d , it is u s e fu l to
d isting u ish betw een raw m aterials and in ter­
m ediate products w hich are sold to the w ood
processing industry; and finished products for
use in other industries or household consum p­
tion. It is only necessary to construct dem and
m odels for finished products because dem and
for raw materials and interm ediate products is a
derived demand, i.e. it can be estim ated from the
d em a n d fo r fin is h e d p ro d u c ts by m e a n s of
2
Figure 1 The linkages betw een roundwood and wood products
N otes: * = final products
R ecyclin g/residu e interactions are not show n
Figure 2 UK roundwood supply and w ood product dem and 1953-1992
(expressed as w ood raw m aterial equivalent or W RM E)
Volume (in million m WRME)
80
60
- Demand
40
- Supply
20
1950
1960
1970
1980
1990
Year
N ote: T he line for co nsu m p tion sh ow n above has been constructed using the latest W R M E conversion figures w hich differ
significantly from those w h ich have been used before.
3
Table 1 shows the main countries supplying the
U K w o o d m a rk e t a c r o s s a ra n g e o f w o o d
p ro d u c ts. T h e m a jo rity o f im p o rte d w oo d
p ro d u c ts m a d e fro m c o n ife r o u s tim b e r
(c o n ife r o u s s a w n w o o d , w o o d p u lp , an d
f ib r e b o a r d ) c o m e s from th e c o u n tr ie s of
N orthern Europe and N orth A m erica h avin g
large forest resources. The exception to this is
p a rtic le b o a rd , m ost of the im p o rts o f w h ich
com e from Western Europe. The proportion of
im ported products m ade from tropical tim ber
(non-coniferous saw nwood and m ost plywood)
has declined over the last 5 years to about onethird of current consum ption. In contrast, the
p r o p o r tio n o f U K c o n s u m p tio n m et by
dom estic supplies has increased, although it still
rem ains quite low in m ost product categories.
The table shows that a substantial proportion of
U K p a p e r c o n s u m p tio n is m et by d o m e s tic
supplies. However, this figure m ust be treated
with caution because the table also shows that a
large proportion of the dem and for wood pulp
(th e in t e r m e d ia te p r o d u c t d e r iv e d fro m
roundw ood and used to m ake paper) is m et by
im ports, so the proportion of UK paper demand
m et by paper produced from UK roundwood is
quite small. Very little roundw ood is im ported,
so m ost dom estic production of w ood products
o th er than p ap er rep resen ts p ro d u ctio n from
UK roundw ood supplies. In 1993, the Forestry
C o m m is s io n a c c o u n te d fo r 61% o f th e s e
roundwood supplies in Great Britain.
Table 1. M ajor countries supplying the UK w ood m arket in 1992 (in per cent)
Countries
United Kingdom
,
sawnwood
coniferous
,
sawnwood
Plywood Particleboard Fibreboard
25
22
-
4
-
5
4
-
-
63
pulp
r r
u
j
paperboard
r r
28
26
53
3
2
16
1
10
10
17
Temperate forests
Canada
Russian Federation
Sw eden
Finland
USA
21
7
17
8
1
1
2
-
-
14
3
24
7
7
17
_
-
6
24
2
-
1
-
21
28
33
34
60
-
-
6
6
-
15
14
3
Tropical forests
Brazil
M alaysia
Indonesia
O thers
_
-
3
1
-
-
-
-
17
8
N ole: Individu al trade flow s vary from year to y ear (for exam ple, im ports o f saw nw ood from C anada fell significantly in 1993),
bu t the above figures are broadly ind icative o f the countries su pplyin g the U nited K ingdom w ith w ood products.
4
Chapter 3
Future demand for wood products
A v ariety of tech n iq u es can be used to m ake
fo r e c a s ts . M o st o f th e m rely on c o lle c tin g
historical evidence, analysing it, and using the
results to arrive at som e sort of p red iction of
w h a t w ill h a p p e n in th e fu tu r e . S o , fo r
ex a m p le, a re la tiv e ly sim p le tech n iq u e is to
calculate the past rate of grow th in a variable,
say d em an d for saw n w o od , and p ro ject this
forw ard (on the assum ption that dem and will
grow at the sam e rate in the future as in the
past). The m ain difference betw een alternative
forecasting techniques is in the m ethods used to
an alyse past data and the com p lexity of that
a n a ly sis. H o w ev er, it m u st b e rem em b ered
that, no m atter how com plicated the analysis is,
there are alw ays several areas w here judgem ent
h a s to b e u se d to r e la te th e r e s u lts o f the
an alysis to w hat m igh t hap p en in the future,
and this is often a m ajor source of uncertainty
in forecasts.
m ake econom ic sense. There are, however, two
weaknesses in this approach. The first is that it
is assum ed that the relationships defined within
the m odels w ill be the same in the future as in
the past (how ever, if this assum ption w as not
valid there w ould be little point in looking at
historical data at all and only judgem ent could
b e u se d to m a k e f o r e c a s ts ). T h e se co n d
w e a k n e s s is th at p ro je c tio n s of e x p la n a to ry
v a ria b le s are s till req u ired to a rriv e at fin al
forecasts. H ow ever, this is not so m uch of a
w ea k n ess b u t an o p p o rtu n ity to ex p lo re the
future, because the m odels enable forecasts to be
generated for a w ide range of possible future
scenarios.
Data on dem and over the period 1953-86 were
used in the construction of dem and m odels in
the 1991 forecasting exercise. Data covering the
p erio d 1 9 8 7 -9 2 h ave b eco m e a v a ila b le sin ce
then, but it w as felt that the addition of these
n ew d a ta w o u ld b e u n lik e ly to c h a n g e the
re la tio n sh ip s id e n tified w ith in tho se m od els
s ig n if ic a n t ly , an d w o u ld n o t ju s t if y th e
considerable effort required to re-estim ate them.
T h is r e v is io n th e r e fo r e u se s th e m o d e ls
c o n s tr u c te d e a r lie r to g e n e r a te u p d a te d
f o r e c a s ts o f w o o d p r o d u c t d e m a n d . T h e
forecasts presented here are different from those
presented in 1991 however, because som e of the
p ro je c tio n s of ex p la n a to ry v a ria b le s used to
m ake the forecasts have been updated.
A technique called econ om etrics w as used to
a rriv e at the fo re ca sts o f U K w oo d p ro d u ct
d e m a n d p r e s e n te d in W h ite m a n (1 9 9 1 ).
Econom etrics is a process com bining econom ic
th e o r y w ith s t a t is t ic a l a n a ly s is (u s u a lly
r e g r e s s io n a n a ly s is ) to b u ild m o d e ls th a t
explain past levels of the variable or variables
b e in g s tu d ie d (in th is c a s e w o o d p r o d u c t
d em a n d ). E c o n o m ic th e o ry is firs t u sed to
d e fin e th e o v e r a ll e x p e c te d r e la tio n s h ip
b etw een the v a ria b le of in terest and a set of
explanatory variables, then statistical analysis is
used to estim ate the details of the relationship.
O nce satisfactory m odels are constru cted (i.e.
m odels that concur w ith econom ic theory, are
statistically valid, and explain a large am ount of
the h isto rica l v a ria tio n in d em an d ) these are
then used w ith projections of the explanatory
variables to m ake forecasts.
T he rest of this ch ap ter p resen ts a very b rief
o u tlin e o f the e c o n o m ic th e o ry b e h in d the
m odelling of wood product demand undertaken
in 1991, and sh o w s the m ain resu lts o f that
m o d e llin g e x e r c is e . M o re d e ta il a b o u t the
m o d e ls c a n b e fo u n d in A p p e n d ix 1 of
W hitem an (1991). It then goes on to discuss the
changes that have been m ade to the projections
o f e x p la n a to r y v a r ia b le s , an d fin is h e s by
presenting the revised forecasts for future wood
product dem and.
T h e s tr e n g th o f th is a p p r o a c h is th a t th e
forecasts produced from such m odels are not
only based on an analysis of the data but also
5
and a ran ge of p ossib le d em an d -sh ifters over
the p e rio d 1 9 5 3 -1 9 8 6 . T h is w as tak en from
sources including the United N ations (1988) and
UK C en tral S tatistical O ffice (1988 and 1989).
M u ltiple regression analysis w as then used to
co n stru ct d em an d m o d els fo r each o f the 11
m ajor finished w ood products show n in Figure
1. In these m odels, dem and w as estim ated as a
function of the follow ing explanatory variables:
T he m o d e ls of w oo d p ro d u c t
demand constructed in 1991
D em an d fo r a w oo d p ro d u ct is e x p e cte d to
change in response to changes in two types of
variable. The first of these is the product price;
econom ic theory dem onstrates that if price rises
dem and is expected to fall and vice versa. This
relation sh ip is called the d em an d cu rve, and
from it the sensitivity of dem and to changes in
p r ic e (th e e la s t ic it y o f d e m a n d ) ca n b e
calculated.
- the price of the product;
- the price of substitute products;
The second type of variable affecting dem and is
the dem and-shifter, so called because it shifts
the w hole of the dem and curve one w ay or the
other. A w h o le ran ge of v a ria b le s m ig h t be
d e m a n d -s h ifte r s . So , fo r e x a m p le n a tio n a l
in co m e cou ld b e one su ch v a ria b le if, w h en
n a tio n a l in c o m e in c r e a s e s , d em a n d fo r the
p r o d u c t a ls o in c r e a s e s . A n o th e r c o m m o n
d e m a n d -s h ifte r is th e p r ic e o f a s u b s titu te
product; if its price falls, dem and for the first
p ro d u ct is exp ected to fall (all o th er thin gs
b ein g eq u al) b eca u se the su b stitu te b ecom es
relatively cheaper and therefore, m ore attractive
to the consumer. Furtherm ore, dem and can be
affected by more than one dem and-shifter at a
time.
- m acroeconom ic v ariab les such as n ation al
incom e, investm ent and population; and
- output indicators for any industry using the
product.
Econom ic theory suggests that the coefficient on
p rice in the m o d els sh o u ld b e n e g a tiv e (i.e.
in d ic a t in g th a t in p e r io d s o f h ig h p r ic e s ,
dem and is low - all other things held constant),
an d th a t th e c o e f f ic ie n t s on a ll th e o th e r
variables should be positive.
A s w a s e x p e c te d , o n ly a few o f th e a b o v e
variables were significant in each of the demand
m o d els. In se v era l cases each o f the m acroecon om ic v ariab les or ou tp u t in d icators w ere
significant in isolation, but not in com bination.
This is quite com m on and is due to the fact that
these variables have displayed sim ilar trends in
the past such that, in com bination, the influence
of one m asks the influence of the others. In such
c a s e s , th e m o st s ig n ific a n t o r e c o n o m ic a lly
p lau sib le v ariab le w as ch osen for each of the
final m odels. Thus, for exam ple, constru ction
in d u s tr y o u tp u t w a s c h o s e n as a fin a l
explanatory variable for som e of the m odels of
saw nw ood and w ood panel dem and but not the
m odels of paper dem and. The full results of the
a n a ly s is c a n b e fo u n d in A p p e n d ix 1 o f
W hitem an (1991), and a sum m ary o f the m ain
results of the m odelling exercise is presented in
Table 2.
The aim of econom etric m odelling is to identify
th e se t o f v a r ia b le s th a t b e s t e x p la in p a s t
changes in demand. The estim ated value of the
co e fficie n ts on those v a ria b les (i.e. the exact
a m o u n t b y w h ic h , fo r e x a m p le , d e m a n d
c h a n g e s if p r ic e w ere to r is e by, say, 10% )
should also be used to check that the results of
the analysis are valid. Two types of validity can
be exam ined : theoretical v alid ity (i.e. that the
coefficien ts are in accord an ce w ith econ om ic
theory), and convergent validity (i.e. that they
are n o t ra d ic a lly d iffe re n t to w h at h as b een
obtained in other studies in sim ilar areas).
In order to m odel dem and, therefore, data were
co llected on prod u ct d em an d , p ro d u ct price,
6
T able 2. Sum m ary results of the 1991 UK wood product dem and analysis
P roduct
Explanatory variables identified
Fuelw ood and charcoal
Previous y e a r's dem and
O ther ind ustrial roundw ood
Deep m ined coal production
1984/85 m iners strike
C oncrete products price
C oniferou s saw nw ood
Last y ear's price
C onstruction industry output
Wood based panels price
C oncrete products price
N on-coniferous saw nw ood price
N on-coniferou s saw nw ood
Price
elasticity
C orrection for A djusted
autocorrelation
R2 (%)
Type of m odel
yes
NA
no
85
Log-linear, aggregate
-0.58
no
NA
Log-linear, aggregate
Price
C onstru ction industry output
Wood based panels price
C oncrete products price
-0.37
no
NA
Log-linear, aggregate
Plyw ood
Price
C onstruction industry output
N on-coniferous saw nw ood price
-0.76
no
NA
Log-linear, aggregate
Fibreboard
Price
Total UK investm ent
-0.91
yes
NA
Log-linear, aggregate
Veneer sheets
C onstru ction industry output
N on-coniferous saw nw ood price
-
yes
NA
A ggregate
Particleboard
Price
Total UK investm ent
-0.48
yes
NA
Log-linear, aggregate
Printing and w riting paper
N ational incom e
-
yes
44
A ggregate
N ew sprint
Price
National incom e
-0.32
no
38
Log-linear, per capita
O ther paper and paperboard
N ational incom e
-
yes
73
Per capita
-
An toregressive
m ainly in the m ining industry.) In the case of
fu e lw o o d an d c h a r c o a l, n o n e o f th e s e
sp ecificatio n s gave good results, and the best
model turned out to be an autoregressive model
with dem and in any year specified as a function
o f a v e ra g e d e m a n d o v e r th e p e r io d p lu s a
proportion of the previous years deviation from
that average.
Table 2 lists the ex p lan ato ry v ariab les w hich
w ere sig n ific a n t in e x p la in in g p a st lev e ls of
dem and for each of the products. Som e of the
m o d e ls
d is p la y e d
s e r ia l
o r r e s id u a l
a u to c o r r e la tio n , an d th is w as o v e rc o m e by
using the Cochrane-O rcutt technique to reduce
bias in the estim ation of coefficients.
The table also shows the types of m odel chosen
for the forecasting exercise. Aggregate demand
an d p e r c a p ita d e m a n d m o d e ls w e re c o n ­
s tr u c te d fo r e a c h p r o d u c t, u s in g b o th th e
original data and the data converted to natural
logarithm s. The best m odel in each case w as
then chosen on the grounds of its explanatory
p o w e r a n d w h e th e r it w a s c o n s id e r e d
a p p ro p riate g iv en the n atu re o f'th e product.
(F o r e x a m p le , s in c e n e w s p r in t is m o s tly
co n su m e d by in d iv id u a ls it w as fe lt th a t it
w ould be sensible to m odel this in per capita
te rm s, b u t le ss so in th e c a se o f say, o th e r
in d u stria l rou n d w ood , w h ich has been used
The adjusted R2 statistics show how much of the
historical variability in dem and was explained
by the price and dem and shifting variables in
the m odels. An unbiased estim ate of R2 could
n o t b e c a lc u la te d in the m o d e ls w h e re the
co n sta n t had b een drop ped (alth ou gh b efore
d ro p p in g the co n stan t in the saw nw ood and
wood panel demand models it had been higher
th an 80% in all cases). The p rice e la sticitie s
sh ow the p ercen tag e ch an g e in dem and that
would be expected with a one per cent change
in price (these are of course negative because as
price rises, dem and w ould be expected to fall
7
and vice v ersa). P rice e la sticity cou ld n ot be
c a lc u la te d fo r so m e o f the m o d e ls w h ere a
s ig n ific a n t re la tio n s h ip b e tw e e n p r ic e an d
dem and could not be identified.
p r ic e s a n d th e fu tu r e le v e ls o f e a c h o f th e
dem and-shifters were therefore required.
In the case of prices, exam ination of h istorical
p ric e s sh o w e d no o v e ra ll tren d u p w a rd s or
dow nw ards, so the assum ption w as m ade that
th e se w o u ld b e eq u al to the a v e ra g e o f real
import prices over the last 10 years of the study
period (1977-86). Real price data over the more
recent period 198 7 -9 2 w as also exam ined, but
this gave no reason to change this assum ption.
The w ood product prices used in the dem and
fo r e c a s ts are sh o w n in T ab le 3. T h e sam e
assum ption w as also m ade w ith respect to the
other substitute product prices.
All the explanatory variables presented above
had the correct sign (i.e. the sign predicted by
e c o n o m ic th e o ry ) an d th e v a lu e s o f th e ir
coefficien ts w ere p lau sible. For exam p le, the
price elasticities calculated were of a similar order
to those found in other wood product dem and
stu d ies. It w as d isa p p o in tin g h ow ev er, that
d em an d c u r v e s co u ld n o t be id e n tifie d fo r
fuelwood and charcoal, other industrial round­
wood, veneer sheets, printing and writing paper,
and other paper and paperboard. In the case of
the first three products it was suspected that this
was due to unreliable price data (trade in these
products tends to be very lim ited, so the prices
recorded for these products m ust be treated with
so m e ca u tio n ). In the case o f the tw o p ap er
p ro d u c t c a te g o rie s , it w a s n o t k n o w n w hy
demand curves could not be identified, unless this
w a s an in d ic a tio n th a t d e m a n d re a lly w as
extremely price inelastic.
The Central Statistical Office (1988) publishes a
projection of U K resident population at 5-yearly
in terv als to 2015 and a fu rth er p ro jectio n for
2 0 2 5 . T h is w as u se d w ith a s t r a ig h t lin e
e x tra p o la tio n to 2050 in fo re ca s ts u sin g p er
capita dem and models.
The above p ro jection s are all the sam e as the
projections m ade in 1991. The m ain changes to
th e d e m a n d fo re ca s ts m a d e in th is re v isio n
a r o s e as a r e s u lt o f c h a n g e s m a d e to th e
p ro je ctio n s of fu tu re n a tio n a l in co m e (G ross
Dom estic Product at m arket prices), investm ent
(Gross D om estic Fixed C apital Form ation) and
c o n s t r u c t io n in d u s tr y o u tp u t.
T h e n ew
p r o je c tio n s o f th e s e v a r ia b le s a re g iv e n in
T ab le 4 a lo n g w ith p r o je c tio n s o f th e o th e r
dem and shifters.
Projections of the explanatory
variables
As w as noted above, in order to forecast future
d em and it is n ecessary to h ave forw ard p ro ­
jections of the explanatory variables identified
in the dem and m od els. P rojectio n s of future
Table 3. The long-run price of w ood products used in the dem and forecasts
Fibreboard
Particleboard
Plyw ood
Veneer sheets
All w ood based panel products
P rinting and w riting paper
N ew sprint
O ther paper and paperboard
Coniferous saw nw ood
N on-coniferous saw nw ood
170
130
260
420
190
N ote: All figures show n are in £/ m 3 (or £/ M T for pap er products) at 1985 prices, rounded to the nearest £10.
8
540
380
480
120
250
Table 4. Projections of the explanatory variables used in the dem and forecasts 1987-2050
Years
Variable
R esident population
(in m illions)
2000
2010
2020
2030
2040
2050
58.9
59.3
59.8
60.2
60.7
61.1
N ational incom e (GDP)
(in £ billion at 1985 prices)
H igh projection
Low projection
534
461
684
509
875
562
1020
621
1434
686
1835
758
Investm ent (GD FCF)
(in £ billion at 1985 prices)
H igh projection
Low projection
85
75
109
83
140
92
179
101
229
112
294
123
122
110
128
111
132
112
137
113
142
113
148
114
Index of construction industry
output (1988=100)
H igh projection
Low projection
N ote: In all per capita dem and m odels, GDP, G DFCF, and constru ction ou tput w ere converted to per capita figures by dividing
through by population, and can be derived from the table above.
Based on this, a projection of an 8% increase in
construction activity over the period 1987-2050
as a w hole w as made.
Two projections of national income were made in
W hitem an (1991). The first w as that it w ould
grow by 2.5% per annum (the high projection)
every year over the forecast period . This w as
based on an exam ination of past grow th rates
m ade over a very long tim e period. The lower
projection was that, with limits to growth coming
into play, growth would reduce by 0.5 percentage
points over each of the 10 year periods after 2001,
until a position of zero real economic growth was
reached in the period 2 0 4 1 -2 0 5 0 . A fter som e
consideration, it was decided to continue to use
the h ig h grow th forecast, b u t change the low
grow th forecast to a m uch sim pler one o f 1%
growth per annum to 2050. This also affected the
forecast of future investm ent w hich, based on
historical evidence, was assumed to account for
16% of national income.
On reflection, it w as felt that this w as perhaps
som ew hat on the low side. For instance, while
year on year population grow th had averaged
0.2 5 % p e r a n n u m in the p a s t, y e a r on y e a r
grow th in con stru ction activ ity had averaged
1.25% or five tim es this am ount. H ow ever, it
w as a lso fe lt th a t it w o u ld be u n re a lis tic to
a s s u m e th a t c o n s t r u c t io n a c t iv it y w o u ld
continue to grow at 1.25% per annum because
by the end of the period this projection would
re su lt in a lm o st a d o u b lin g of c o n s tru c tio n
activity per capita. As a com prom ise therefore,
c o n s tru c tio n w as p ro je c te d fo rw a rd fo r the
r e v is e d fo r e c a s ts at fiv e tim e s th e ra te o f
population grow th, resulting in a 48% increase
in construction activity (com pared to the level
in 1986) by 2050. B ecau se of the u n certain ty
surrounding this variable, this w as taken as a
high projection and the original projection was
retained as a low projection. In reality, future
c o n s tr u c tio n a c t iv it y w ill p r o b a b ly lie
somewhere betw een these two projections.
The previous projection of future construction
activ ity assu m ed that this w ou ld rise in line
w ith changes in population. This was based on
the apparent correlation betw een construction
and population over the period 1953-86, and a
h y p o t h e s is th a t c o n s t r u c t io n a c t iv it y is
p rim a rily d riv en by in crea ses in p op u lation .
9
The revised forecasts of wood product demand to the year 2050
The revised forecasts of wood product dem and are given in Tables 5 and 6.
Table 5 Forecast of future annual UK w ood product dem and 1987-2050 (high grow th scenario)
Years
Wood product category
A ctual
1989-91
2000
2010
2020
2030
350
270
360
270
370
270
370
270
Fuelw ood and charcoal
O ther industrial roundw ood
580
270
Printing and w riting paper
N ew sprint
O ther paper and paperboard
All paper products
3 020
1 920
4 450
9 390
3
1
5
9
040
610
320
970
3 880
1 680
6100
11 660
Veneer sheets
Plywood
Fibreboard
Particleboard
All wood based panels
100
1430
490
2 900
4 920
150
1 390
540
3120
5 200
160
1480
660
3 920
6 220
10 170
1 180
11 350
10 340
1 450
11 790
10 940
1 500
12 440
Coniferous saw nw ood
N on-coniferous saw nw ood
All saw nw ood
N ote:
4
1
7
13
970
750
090
810
6
1
8
16
2050
2040
370
270
370
270
360
820
350
530
6
1
9
18
400
890
960
250
6
1
12
20
450
970
010
430
160
1 550
830
4 910
7 450
170
1 630
1 040
6150
8 990
1
1
6
9
180
710
210
310
410
1
1
6
9
190
790
220
360
560
11 430
1 530
12 960
11 960
1580
13 540
12 520
1 620
14140
13100
1 660
14 760
P aper pro d u ct figures are expressed in thousand m etric ton nes, all oth er figures in thousand cu bic m etres product
volum e. All figures are rounded to the nearest ten thousand.
Table 6 Forecast of future annual UK wood product dem and 1987-2050 (low grow th scenario)
Years
Wood product category
A ctual
1 989-91
2000
2010
2020
2030
2040
2050
Fuelw ood and charcoal
O ther industrial roundw ood
580
270
350
230
360
230
370
230
370
230
370
230
370
230
Printing and w riting paper
N ew sprint
O ther paper and paperboard
All paper products
3 020
1920
4 450
9 390
2
1
4
9
890
610
220
720
3190
1 640
5 510
10 340
530
680
830
040
3 890
1710
6170
11770
Veneer sheets
Plyw ood
Fibreboard
Particleboard
All w ood based panels
100
1 430
490
2 900
4 920
130
1060
470
2 770
4 430
130
1 070
510
3 040
4 750
140
1080
550
3 330
5100
140
1090
600
3 640
5 470
140
1 100
650
3 990
5 880
140
1 110
720
4 370
6 700
10170
1 180
11 350
9 030
1340
10 370
9130
1340
10 470
9 210
1 350
10 560
9 300
1 360
10 660
9 380
1 370
10 750
9 420
1 370
10 790
Coniferous saw nw ood
N on-coniferous saw nw ood
All saw nw ood
620
580
950
150
2
1
5
9
3
1
5
11
4
1
6
12
300
740
560
600
N ote: P ap er pro d u ct figu res are exp ressed in thousand m etric tonnes, all oth er figu res in thousand cu b ic m etres produ ct
volum e. A ll figures are rounded to the nearest ten thousand. Start d ate for m odel is 1987 - see text.
10
B eca u se the eco n o m e tric m od els of dem and
were constructed from data collected up until
1986, the revised d em and forecasts presented
a b o v e w e re s ta r t e d fro m th e y e a r 1 9 8 7 .
D e m a n d is q u ite v a r ia b le in th e sh o rt-ru n
h ow ever, and this ex p la in s w hy som e of the
a c tu a l c o n s u m p tio n fig u r e s fo r th e p e rio d
1 9 8 9 -9 1 are sig n ifica n tly above or b elow the
forecasts for future periods (i.e. consum ption in
those years w as sign ifican tly above or below
the underlying trend).
D em an d fo r p a p e r p ro d u cts is e x p e c te d to
in crea se by b etw een 34% and 117% o v er the
period, depending on future econom ic grow th,
m o st of this in crease co m in g from in creased
demand for other paper and paperboard products.
Demand for wood based panels is also expected to
grow by a sim ila r a m o u n t, m a in ly in the
consumption of fibreboard and particleboard. As
in the 1991 paper, some of the demand forecasts
reached levels of per-cap ita consu m ption that
were considered to be unrealistic in comparison to
current levels of consum ption in countries with
e x te n s iv e fo re st re s o u rce s. P e r-c a p ita c o n ­
su m p tio n lim its w ere th erefo re fo re ca st (see
A p p e n d ix 3 o f W h item a n (1991) for a fu lle r
explanation of how this was done).
D e m a n d fo r fu e lw o o d an d c h a r c o a l is n o t
expected to rise or fall over the period, but to
s ta y a t an a v e r a g e le v e l o f a ro u n d
3 7 0 000 m 3/ y ear, the a v e ra g e le v e l o f c o n ­
s u m p tio n in th e p a st. T h e o r ig in a l (1 9 9 1 )
dem and m odel for other industrial roundwood
gave a fo reca st of co n su m p tio n d eclin in g by
about 90% to 20 000 m 3/year in 2050 (reflecting
the e x p e cte d d e c lin e in d em an d fo r m in in g
tim ber). H owever, U K production of the other
m a in c o n s titu e n t o f th is p r o d u c t c a te g o ry ,
rou n d w ood fen cin g , alread y stan d s at about
230 000 m 3/year (200 000 m 3/year coniferous
ro u n d w o o d fe n c in g (F o re stry C o m m iss io n ,
1 9 9 4 ) a n d a v e ry r o u g h e s tim a te of
30 000 m 3/year n o n -co n ifero u s fen cin g, so it
w as felt that this forecast w as far too low. It
w as n o t p o s s ib le to m o d e l th e d em a n d fo r
m ining tim ber and fencing separately because
th e h is t o r ic a l c o n s u m p tio n o f th e s e tw o
products could not be identified. So, because
v ery little o f this p ro d u ct is trad ed , and the
dem and for m ining tim ber already appears to
have declined to a negligible am ount (Forestry
C om m ission , 1994), it w as decided to present
a lo w d em a n d fo r e c a s t o f 2 30 000 m 3/ y ear
and
a
s lig h t ly
h ig h e r
fo re ca s t
of
2 70 000 m 3/ y ear fo r the p erio d as a w h o le,
b a s e d on th e 1 9 9 4 e s tim a te o f ro u n d w o o d
fencing production.
T h e m o d e ls o f sa w n w o o d d e m a n d g a v e
fo recasts o f co n su m p tio n v ary in g b etw een a
30% rise and 5% fall (against 1989-91 actuals),
d e p e n d in g on th e a s s u m e d fu tu r e ra te o f
grow th in construction activity. This very large
d ifferen ce reflected the u n certain ty abou t by
how m uch construction activity will grow in the
fu tu r e , an d s u g g e s te d th a t th is s h o u ld be
investigated further.
A s a fin a l w o rd o f c a u tio n , it m u s t be
remem bered that these forecasts are forecasts of
trends in the level of dem and. Demand in any
p articu lar year cou ld vary quite sig n ifican tly
from the trend, especially in the m ost volatile
w oo d p ro d u c t c a te g o rie s . So , fo r e x a m p le ,
actual dem and for coniferous sawnwood during
the period 1989-91 was significantly higher than
the trend for m any years to com e. The wood
p ro d u cts w h ich ap p e a red to sh ow the m o st
volatility in dem and were sawnwood and wood
based panel products, possibly due to the very
cy c lic a l n a tu re o f co n stru ctio n . As a rou gh
e s tim a te , d e m a n d fo r th e se w oo d p ro d u cts
could be as m uch as 25% higher or lower than
the forecast in any particular year.
11
Chapter 4
The future supply of roundwood
n o t be w o rth w h ile p ro d u cin g a n ew fo recast
u n til th e F o r e s tr y C o m m is s io n 's c u r r e n t
inventory of w oodlands has been com pleted.
T h e F o re stry C o m m issio n h as v ery re ce n tly
produced revised conifer prod uction forecasts
for Forest Enterprise and the private sector over
the p eriod 1 9 9 7 -2 0 1 6 (R oth n ie, 1996). T h ese
w ere constructed in broad ly the sam e w ay as
the earlier prod uction forecasts (Dew ar, 1988;
K u p ie k a n d P h illip , 1 9 8 8 ; M o r r is , 1 9 9 1 ;
Thom pson, 1991). A long-run supply forecast
w a s g e n e r a te d fro m th e d a ta s e ts u se d to
produce these forecasts and w as added to longru n s u p p ly in fo r m a tio n s u p p lie d b y th e
N orthern Ireland Forest Service and a separate
forecast of non-coniferous roundw ood supply,
to give the forecast p resen ted in Table 7 and
Figure 3. The forecast for future non-coniferous
roundwood production is based on a quite old
forecast m ade by O akley (1986). W hile this is
now probably quite out of date, it w as the only
forecast available, and it w as felt that it would
T h e n e w s u p p ly f o r e c a s t d iffe r s fro m th a t
prod uced in Forestry C om m ission O ccasion al
Paper 29 in tw o w ays. It is low er, peaking at
16 m illion m 3 rather than 19 m illion m 3, and the
p e a k is m u ch le ss p ro n o u n c e d . P a rt o f the
explanation for the low ering of the peak is that
the N orthern Ireland p rod u ction figu res w ere
a c c id e n ta lly d o u b le -c o u n te d in O c c a s io n a l
Paper 29. Apart from this error, the m ain factors
which have affected both the level and severity
of the peak have been changes in the felling ages
u sed in th e p riv a te s e c to r fo re c a s t, an d the
im p a c t o f an in c re a s e d n u m b e r o f F o re s try
Com m ission design plans on their com ponent of
the forecast.
Table 7 Forecast of future UK average annual roundw ood supply 1997-2051
Year
1997-01
2002-06
2007-11
2012-16
2017-21
2022-26
2027-31
20 32 -3 6
2037-41
2042^6
2047-51
N ote:
C o n iferou s
sm all roundw ood
N on -con iferou s
sm all roundw ood
C o n iferou s
saw logs
N on -con iferou s
saw logs
Total
3.8
4.1
4.4
4.6
4.4
4.5
4.3
4.1
3.6
3.4
3.5
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
4.6
6.0
7.9
9.5
9.9
10.6
10.2
9.0
7.2
6.2
6.4
1.0
1.0
1.0
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
9.5
11.2
13.5
15.2
15.5
16.2
15.7
14.2
12.0
10.7
11.1
V olu m es p resen ted are total stan d in g v o lu m es in m illion cu b ic m etres d ow n to a m in im u m top d iam eter of 7 cm
ov erbark. Saw log volum es have been calculated as volu m e to 18 cm diam eter (20 cm in N orthern Ireland) plus half the
volu m e in the size category 1 4-18 cm top d iam eter (1 4 -2 0 cm in N orthern Ireland). Because of rounding, totals m ay not
appear to sum .
12
Figure 3 Forecast of U K roundw ood production to 2050
Standing volume in million m 3
overbark
g Non-coniferous sawlogs
2Q q
□ Coniferous sawlogs
■ Non-coniferous small roundwood
s Coniferous small roundwood
1992
2002
2012
2022
2032
2042
2052
Year
N ote: T h e abo ve forecast w as constructed b y taking 5-year m oving averages of the figures presented in Table 7.
Startin g w ith environ m en tal im provem en ts, a
forecast in co rp o ratin g a ch an g e in resto ck in g
p ractices w as con stru cted . T h is in clu d ed the
e ffe c t o f a 5% in c r e a s e in o p e n s p a c e on
restocking (resulting in a 5% loss in subsequent
thinning and felling volum es) and the effect of
re ta in in g 1% o f cro p s to b io lo g ic a l m a tu rity
(resu lting in a 1% loss in fellin g volu m es but
additional thinning volum es from the retained
crops). These effects were introduced from 2017
o n w a rd s fo r th e F o r e s tr y C o m m is s io n
com ponent of the forecast (to take into account
the fact th at d esig n p lan s h ave a lread y b een
in c o rp o ra te d in to the 2 0 -y e a r fo re c a s t from
w h ich the lo n g -ru n fo re ca st w as m ad e), and
from 1997 for the private sector com ponent. The
overall effect of these changes w as n egligible,
r e s u ltin g in d if fe r e n c e s o f le s s th a n
100 000 m 3/year from the original forecast.
The sensitivity of the supply
forecast to external factors
Several assum ptions were m ade to produce the
long-run supply forecast presented above. The
f ir s t w a s th a t p r iv a te ly o w n e d w o o d la n d s
w ould be felled at the m ost profitable age to do
so .
T h is c o n tr a s te d w ith th e F o r e s tr y
C om m ission com ponent o f the forecast, w hich
took into accou nt the effect of cu rren t design
plans on future production (although these did
n o t a t th e tim e c o v e r a ll o f th e F o r e s tr y
C om m ission estate). The second assu m p tion
w as that crops w ould be replaced by identical
crop s a fter fellin g . F o r co n sisten cy w ith the
d em a n d fo r e c a s t, it w a s a lso a ssu m e d th a t
tim ber prices w ould not rise in the future.
To test the sensitivity of the forecast to changes
in th e s e a s s u m p tio n s , a r a n g e o f fu tu r e
e c o n o m ic a n d p o lic y s c e n a r io s w e re c o n ­
s tr u c te d , an d th e ir e f f e c t on fu tu re tim b e r
supplies w ere exam ined. Because o f the lack of
d a ta , th e se c h a n g e s w ere o n ly m a d e to th e
c o n ife r p ro d u c tio n fo re c a s t (w h ich a n y w ay
accounts for by far the greatest share of future
production).
T h is scen ario w as then exten d ed to show the
effect of changing felling ages (to break-up the
age s tru c tu re o f cro p s) on su p p ly . W ith o u t
com prehensive forest design plans for the whole
fo re st e s ta te , an y a tte m p t to do th is h ad , o f
course, to be very sim plified, so the follow ing
assum ptions w ere made:
13
B atem a n , 1994) a 'A% p er an n u m in crease in
yield seem ed a reasonable assum ption to m ake
for an im proved silviculture scenario. This was
co m b in e d w ith the p re v io u s e n v iro n m e n ta l
policy scenarios. The net result of this w as that
the tw o effects rou gh ly can celled each oth er
out (indeed this w as the assum ption m ade in
1991) up until 2015, after w hich the increase in
y ie ld o u tw e ig h e d th e e ffe c t o f an y fu r th e r
r e d u c tio n s in s u p p ly fro m c h a n g in g c ro p
felling ages.
a. in fo re sts o f 5 0 - 5 0 0 h a, o n e -th ird o f
crop s w ould be felled 5 y ears b efo re the
optim al rotation age and one-third 5 years
after; and
b. in forests of over 500 ha, 20% of crops
w ould be felled in each of the periods 5 and
10 y e a rs b e fo r e an d a f t e r the o p tim a l
rotation age.
A g a in it w as a ssu m e d th a t th e se m e a su re s
w o u ld ta k e e f f e c t la te r fo r th e F o r e s tr y
Com m ission com ponent of the forecast to take
into account the effect of current forest design
plans.
The assum ption that roundw ood prices would
n o t ch an g e sig n ific a n tly in real term s in the
future w as based on the sam e sort of long-run
historical evidence as w as found in the case of
w o o d p r o d u c t p r ic e s . H o w e v e r, a fu r th e r
forecast w as constructed under the assum ption
that timber prices will rise by >2 % per annum , to
see w hat effect this m ight have on production.
This show ed that such an increase w ould have
little effect on supply, because it turned out to
a ffect o p tim al ro tatio n ages on ly m arginally.
A nother study on the stability of timber prices
(W h ite m a n , 1 9 9 5 ) w as u se d to g e n e r a te
confidence lim its for the forecast, and these also
turned out to be rem arkably small (roughly just
under 1 m illion m 3 per annum).
C onsid ering that the above assum ptions were
applied to the w hole of the conifer estate and
w ere therefore, probably the m axim u m effect
that could be expected to occur in the future,
the im p act of these ch anges w as quite sm all.
T h e n ew f o r e c a s t r e s u lte d in a m a x im u m
red u ction in prod uction of 2 m illion m 3/year
com pared with the original forecast, and a total
expected reduction of 20 m illion m 3 or about
one y ea r's production over the w hole 50-year
period.
To c o n tra s t w ith th is, a n o th e r fo re c a s t w as
co n stru cted to exam in e the p ossib le effect of
im p r o v e d s ilv ic u lt u r e on p r o d u c t io n .
Increased future crop y ield s m igh t arise as a
resu lt of m an y fa cto rs su ch as b e tte r p la n t
h an d lin g , site p rep aration and p ro tectio n , or
the use of g en etica lly im p rov ed stock. A fter
discussion w ith researchers in these fields and
a review of the site m o d ellin g lite ra tu re (for
e x a m p le , W o rre ll, 1 9 8 7 ; M a c M illa n , 1 9 9 1 ;
It th erefore seem s that the su p p ly fo recast is
fairly robust to both future uncertainties about
tim ber prices and technical and environm ental
f a c to r s . It is a ls o w o rth n o tin g th a t th e se
u n certain ties are very sm all com p ared to the
d ifferen ce b etw een the high and low dem and
grow th forecasts, show ing that changes in the
factors affecting dem and will probably have the
largest im pact on future self-sufficiency.
14
Chapter 5
The combined supply and demand forecast
To com plete the analysis presented previously,
it is n e c e s s a r y to c o m b in e th e su p p ly and
dem and forecasts. This was done by converting
all the fig u re s to the co m m o n n u m e ra ire of
w ood raw m aterial equivalent (or W RM E). To
ascertain the net excess dem and for w ood over
the supply from standing tim ber resources, it is
also necessary to account for the availability of
secondary w ood and fibre resources from wood
resid u es and m aterials that are recovered for
recycling, so this is also discussed below.
take into account more recent inform ation about
product recovery in m ills, from sources such as
the regular saw m ill surveys conducted by the
S u p p ly an d D e m a n d S u b -c o m m itte e o f the
H om e G ro w n T im b e r A d v iso ry C o m m itte e
(HGTAC). Secondly, they have been adjusted to
take into account the volum e difference after the
re m o v a l o f b a rk , an d the w a ste th at o ccu rs
d u rin g n o rm al h a rv e stin g o p e ra tio n s (fo rest
con version difference). The latter adju stm ent
w a s n o t p r o p e r ly ta k e n in to a c c o u n t in
W hitem an (1991), but is very im portant because
about 10% of the measured standing volum e is
lost in the stum p grow th, in cuttin g logs into
fix e d
le n g th s ,
t o le r a n c e s , e lim in a tin g
abnorm alities in stem quality and occasional rot.
So, because the production forecast is given in
term s o f sta n d in g v olu m e rath er th an felled
volum e, this m ust also be taken into account.
Conversion factors
The conversion factors used to convert from wood
product demand to demand in terms of standing
roundwood are shown in Table 8. These figures
differ from those presented in Whiteman (1991) in
two ways. Firstly, they h ave been u pdated to
T able 8 U K conversion factors (volum e of standing roundwood or W RM E required to produce one
unit of final product)
P roduct and m easu rem en t u n it
C onversion
, .
factor
„
Product and m easu rem ent u n it
1.25
1.25
C oniferous saw nw ood (m3)
N on-coniferous saw nw ood (m 3)
2.13
2.09
Plyw ood (m3)
Fibreboard (m3)
Particleboard (m3)2
Veneer sheets (m3)
3.67
2.35
1.61
3.67
Fuelw ood and charcoal (m3)1
O ther industrial roundw ood (m3)
N ew sprint (M T)
P rinting and w riting paper (M T)
O ther paper and paperboard (M T)
N otes:
1
2
-i
» 4.30
J
C onversion
factor
T he charcoal com ponen t o f the fuelw ood and charcoal conversion factor is a volu m e to volu m e conversion factor.
A bout 7.8 m 3 of w ood is required to m ake one tonne o f charcoal, b u t one tonne o f charcoal is equal to about 6 m3 in
volum e.
T h e co n v e rsio n fa cto r for O S B is h ig h e r than th at fo r o th e r ty p es o f p a rticle b o a rd , and th is fig u re has been
constructed assum in g that 25% of future consu m p tion w ill be consu m p tion o f OSB.
15
A com p ro m ise w ou ld be to take the p o in t of
recovery as the determ inant of su pply source.
Thus, only residues recovered in U K saw m ills
would count as UK residue supply, but all fibre
recovered for recyclin g w ith in the U K w ould
count as UK recycled fibre supply irrespective
of w here the fibre originally cam e from (i.e. it
w o u ld tr e a t U K p a p e r c o n s u m e r s as th e
producers of recycled fibre). This w ould seem
to be the sensible w ay to handle this, giving the
UK credit for all the recovery of recycled fibre
w ithin the U K but only accounting for residues
arising in UK saw m ills, and w as the approach
chosen for this analysis.
Residues and recycled material
The effect of residues and recycled m aterial on
the UK supply and dem and balance were also
n o t c o n sid e re d in W h ite m a n (1 9 9 1 ). T h ese
secondary sources of supply are substantial and
have a significant effect on the overall supply
and dem and balance. However, their inclusion
raises three challenging m ethodological issues:
a. h o w m u ch o f e a c h o f th e s e s o u rc e s
should properly be counted as supply from
the U nited Kingdom ;
b. h o w th e y s h o u ld b e c a lc u la te d an d
projected into the future; and
T h e c a lc u la t io n o f r e s id u e s a n d re c y c le d
m aterial su pply is fairly straig h tforw ard , and
the figures behind the conversion factors above
give m ost of the technical co-efficients required
to do th is . F o r c o n s is te n c y w ith th e o th e r
supply and dem and figures, this supply has also
to be converted to WRME.
c. w h eth er they sh ou ld be cou n ted as a
separate source of supply or be subtracted
fro m th e d e m a n d s id e o f th e o v e r a ll
balance.
Two alternative views could be taken in answer
to the first question. If the original wood source
w as taken as the d eterm inant of the source of
resid u e s and recy cled m a te ria l su pply, then
only residues recovered from the processing of
UK saw logs, and fibre recovered for recycling
fro m p a p e r p ro d u c e d fro m U K s m a ll
ro u n d w o o d w ou ld co u n t as a so u rce o f U K
supply. This, however, would give little credit
to th e U K fo r the r e c o v e r y o f p a p e r fo r
recycling, because most of the paper consum ed
in the UK is im ported or m ade from imported
p u lp .
T h is w o u ld th e r e fo r e s e e m to
underestim ate the supply of recycled fibre from
the UK.
The calcu lation of recycled m aterial supply is
relatively easy. Firstly, p ap er con su m p tion is
m u ltip lie d by the p ro p o rtio n re c o v e re d fo r
recycling, currently about 30% (this m akes the
a s s u m p tio n s th a t p a p e r c o n s u m e d in a n y
particu lar year becom es available for recovery
in the sam e year, and that all paper recovered is
used for further paper m anufacturing). This is
th e n m u ltip lie d b y th e fib r e y ie ld (th e
p r o p o r tio n o f th e fib re re c o v e re d w h ic h is
utilisable), currently estim ated to be 80% , and
the resultant figure is m ultiplied by the paper
conversion factor presented above, to arrive at a
recycled m aterial supply in W RM E.
At the other extrem e, it could be argued that all
of the consum ption of w ood products leads to
th e p r o d u c tio n o f r e s id u e s an d r e c y c le d
m aterial. T hu s, the con su m p tion of p aper in
th e U K le a d s to the r e c o v e r y o f p a p e r fo r
recyclin g in the UK, and U K con su m p tion of
saw nw ood, plyw ood, and v en eer sheets leads
to the production of residues in the U K and in
th e c o u n tr ie s su p p ly in g th e U K w ith th ese
p ro d u cts. F o llo w in g this lin e, the U K could
therefore, claim a supply credit for the recovery
of residues outside the UK. (This recovery of
residues could be netted out of the saw nw ood,
plyw ood and veneer sheet conversion factors as
one way of accom m odating this, if it w ere not
for the fact that the resid u es are used in the
pulp, fibreboard, and particleboard industries.)
This would however, seem to overestim ate the
recovery of residues, by giving the UK a credit
on the supply side for the recovery of residues
in foreign supplier countries.
For the projection to 2050, it w as assum ed that
the fib re y ie ld w ill rem a in at 80% , and th a t
paper recycling increases linearly from 30% in
1990 to 50% in 2010 and stays at 50% thereafter
(in lin e w ith p r o p o s e d EC d ir e c tiv e s on
p a c k a g in g an d U K ta r g e ts fo r r e c y c lin g
d o m e s tic w a s te ). T h e s e fig u r e s w e re th e n
applied to the paper consum ption forecasts to
arrive at a recycled m aterial supply forecast.
T h ere are tw o m ain u n c e r ta in tie s a b o u t the
recycled m aterial su pply forecast. Firstly, the
fib re y ie ld m ay d e c lin e in th e fu tu re as the
p ro p o rtio n o f p a p e r m ad e from v irg in fib re
e n te r in g th e r e c y c lin g s y s te m d e c lin e s .
Secon d ly, and m ore im p o rtan tly , th ere is the
q u e s tio n o f h ow m u ch p a p e r re c o v e re d fo r
re cy c lin g w ill be u sed for the p ro d u ctio n o f
e n e rg y .
If th is is fo u n d to b e a m o re
e n v ir o n m e n t a lly b e n e f ic ia l w a y o f u s in g
16
re c o v e r e d p a p e r, an d is p r o m o te d b y th e
g o v e r n m e n t, th e n fu tu re re c y c le d m a te ria l
su p p ly fo r the pu lp and p aper in d u stry w ill
obviously decline.
the w ood panel and pulp industry to produce
other wood products.
The UK supply of residues was calculated from
the supply of saw logs given in the production
forecast. This required the minor assumption that
all UK sawlogs are processed in UK mills, and that
U K m ills use on ly U K saw logs. T h e v olu m e
entering m ills w as first calculated by removing
forest conversion losses (and bark in the case of
coniferous sawlogs) from the production forecast
figures to arrive at log input figures. Total residue
production w as then calculated by subtracting
from these the volumes of sawnwood produced
multiplied by 1.2 (to allow for 20% moisture loss
during the saw nw ood drying process). Only a
proportion of total residue production is recovered
for use elsewhere in the wood processing industry,
so these figures were then multiplied by 0.9 in the
case of coniferous sawlogs, and 0.6 in the case of
non-coniferous sawlogs, to arrive at a figure for
net residue recovery. (These figures were based on
the destination of saw m ill residues recorded in
HGTAC saw m ill surveys since 1977, show n in
T able 9.) T h e n et resid u e fig u res w ere then
converted back into W RME by adding on forest
c o n v e rs io n lo s s e s (an d b a rk in the ca se of
coniferous residues) to arrive at the equivalent
v o lu m e o f s ta n d in g tim b er th e se re s id u e s
represented.
T h e c a lc u la t io n o f r e s id u e su p p ly is m o re
co m p lica te d . A s the saw n w o o d c o n v ersio n
factors above show, about half of the volum e of
w ood used to m ake saw n w ood is lo st in the
p ro d u ctio n p ro cess. Firstly, there are forest
c o n v ersio n lo sses w h ich can n o t g en erally be
recovered. Then there is the rem oval of bark.
T h is is n ot recovered from con iferou s tim ber
b e c a u s e it is n o t u sed in th e p u lp or p a n e l
industries. Bark from non-coniferous tim ber is
used, however, in the particleboard industry, so
this g iv es rise to the p ro d u ctio n of a certain
am ount of residues w hich m ust be taken into
accou nt. O th er lo sses arise as a result of the
re m o v a l o f u n d e s ira b le c o n s titu e n ts o f th e
tim ber (predom inantly m oisture, w hich is lost
in the process of drying saw nw ood), and these
have to be excluded in the calculation of wood
residues. The m ain stage at w hich residues are
produced, how ever, is the saw m ill conversion
p r o c e s s d u r in g w h ic h lo g s (r o u n d ) a re
c o n v e rte d in to to sa w n p ro d u cts (g e n e ra lly
sq u are or re cta n g u la r in cross se ctio n ). T h is
le a v e s a s u b s ta n tia l q u a n tity of sm a ll, odd
shaped pieces of tim ber w hich can be used by
T able 9 The use of UK saw m ill residues reported in HGTAC saw m ill surveys
Production category and destination of residues
(percentage o f roundw ood volum e delivered)
1977
1983
1987
1990
1993
75.6
17.1
3.5
7.8
75.8
14.7
5.0
4.5
82.7
14.2
1.6
1.6
90.2
6.5
2.2
1.1
93.5
2.2
2.2
1.1
47.7
24.3
17.4
10.9
35.7
31.9
22.7
9.7
45.5
33.1
18.0
3.4
61.6
28.3
7.1
3.0
58.0
20.0
17.0
3.0
Coniferous sawmuood
Wood processing industry
Other uses
Burnt for heat
Waste
N on-coniferous saivnwood
Wood processing industry
Other uses
Burnt for heat
Waste
17
For forecasting purposes, it w as assum ed that
th e s e fig u r e s fo r r e c o v e r y to th e w o o d
p r o c e s s in g in d u s tr y (90% an d 60% ) w o u ld
remain the sam e over the period of the forecast.
from the sam e original volum e of tim ber quoted
as the rou n d w ood su p p ly and h ave n ot been
utilised in any interm ediate product. Because
the resid u e v o lu m e is n o t allow ed for in the
sawntim ber: roundwood requirement conversion
factor, the residues can be subtracted from the
in i t i a l c a lc u la t io n o f d e m a n d fo r W R M E .
H owever, the sam e argum ent cannot be applied
to recycled fibre w h ich has to be treated as a
se c o n d a ry so u rce o f su p p ly : it is a fte r a ll a
m a tte r o f c h o ic e as to w h e th e r to p ro d u c e
recycled fibre w hile there is no w ay of avoiding
the p ro d u ctio n of resid u es at saw m ills. Two
d iffe r e n t e x p re s s io n s o f s e lf s u ffic ie n c y are
therefore given in Tables 10 and 11:
T h e o v era ll su p p ly and d em an d b a la n ce for
w ood in the UK is show n in Tables 10 and 11.
Total dem and expressed in term s o f W RM E is
now expected to rise to about 140 million m3/year
u n d e r the h ig h d e m a n d f o r e c a s t or
90 m illio n m 3/ y ea r u n d e r th e low d em a n d
forecast. These forecasts are higher than those
p r e s e n te d in 1991 b e c a u s e o f th e h ig h e r
projection of consum ption activity used in some
o f th e p r o d u c t d e m a n d f o r e c a s ts , a n d th e
raisin g of the co n v ersio n factors to take into
account the 10% forest conversion difference in
the calculation of W RM E and other changes to
the conversion factors (particularly for paper).
S u p p ly fro m f o r e s t r e s o u r c e s p e a k s at
16 m illion m 3/year in 2025, at w h ich poin t it
w ill m eet a b o u t 15% (h ig h d em a n d g ro w th
forecast) to 20% (low dem and grow th forecast)
of estim ated demand.
Self-sufficiency in roundw ood (adjusted for
residues)
S e lf-su fficie n cy in rou n d w ood + recy cled
fibre
Recycled fibre has a m ajor im pact on the supply
and dem and balance. It am ounts to 55% of total
su p p ly at the start of the forecast and 66% to
76% (depending on assum ed dem and grow th)
by the year 2050. The inclusion of recycled fibre
in supply changes the expression self sufficiency
at its p e a k fro m 1 6 % -2 1 % to 3 9 % -4 4 % and
reduces the effect (in term s of self sufficiency) of
the decline in roundw ood production expected
tow ards the end of the forecast.
T h e q u estion then rem ains as to w h eth er the
supply of residues and recycled m aterial should
b e c o u n te d as an a d d it io n a l su p p ly o r b e
s u b tr a c te d fro m th e d e m a n d s id e o f the
equ ation in the calcu lation of self-sufficiency.
Including residues as a further source of supply
w ould be double cou nting because they com e
T able 10 Forecast of UK w ood supply and dem and 1987-2050 (high g ro w th scen ario)
Forecast years
Wood product category
A ctual
1989-91
Roundw ood products
Paper products
Wood based panels
Saw nw ood
TOTAL (a)
saw nw ood residues (b)
N ET TOTAL D EM AN D (a-b)=(c)
2000
2010
800
160
830
390
180
440
740
2020
2030
2040
800
380
100
500
780
930
850
800
70190
18 900
28 730
119 520
2 920
116 600
800
78 530
19 900
30 000
129 230
2 120
127 110
2050
1060
40 410
11 440
24 100
77 010
1 190
75 820
780
42 870
11 890
25 010
80 550
1520
79 030
50
13
26
91
2
88
R O U N D W O O D SUPPLY (d)
R EC Y C LED SUPPLY (e)
7 990
9 800
9 850
13 720
13 880
20 060
15 640
23 750
15 400
28 440
11 760
31 410
11 130
35160
Self sufficiency in roundw ood (d)/ (c)
10.5%
12.5%
15.6%
15.5%
13.2%
9.3%
8.0%
Self sufficiency in roundw ood +
recycled fibre (d+e)/ (c)
23.5%
29.8%
38.2%
39.0%
37.6%
34.0%
33.5%
59
16
27
103
2
100
N ote: All figures in thousand cu bic m etres W R M E rounded to the nearest ten thousand.
18
87
20
31
140
1
138
800
890
330
320
340
970
370
T able 11 Forecast of U K w ood supply and dem and 1987-2050 (low g ro w th scen ario)
Forecast years
W ood product category
A ctual
1989-91
R oundw ood products
Paper products
Wood based panels
Saw nw ood
TO TAL (a)
saw nw ood residues (b)
N ET TO TAL D EM A N D (a-b)=(c)
2000
2010
2020
2030
2040
2050
1060
40 410
11 440
24100
77 010
1 190
75 820
730
39 350
10 330
21 990
72 400
1 520
70 880
41
10
22
75
2
73
750
810
900
230
690
440
250
750
44 480
11 510
22 410
79150
2 930
76 220
750
47 430
12180
22 610
82 970
2 920
80 050
50
12
22
87
2
84
750
660
900
800
110
120
990
750
54 200
13 700
23 000
91 650
1 970
89 680
R O U N D W O O D SUPPLY (d)
R EC Y C LED SUPPLY (e)
7 990
9 800
9 850
12 590
13 880
16 720
15 640
17 790
15 400
18 970
11 760
20 260
11 130
21 680
Self sufficiency in roundw ood (d)/ (c)
10.5%
13.9%
18.9%
20.5%
19.2%
13.8%
12.4%
Self sufficiency in roundw ood +
recycled fibre (d+e)/(c)
23.5%
31.7%
41.8%
43.9%
42.9%
37.6%
36.6%
Note: All figures in thousand cubic metres WRME rounded to the nearest ten thousand.
dem and for wood panel and paper products. In
the case of the latter, self-sufficiency is expected
to peak in 2025 and decline slightly thereafter.
The fall in self-su fficien cy is not very m arked
because the decline in small roundwood supply
after 2025 is offset by large forecast increases in
the availability of paper for recycling.
Policy implications of
theforecasts of future supply and
demand
T h e ab ov e fo reca sts h av e se v era l in terestin g
policy im plications. The first of these concerns
the peak in roundw ood production. It can be
argued that for the secure developm ent of the
dom estic roundw ood processing industry it is
desirable to have a sm ooth and non-declining
level of future roundw ood production. Already
th e im p a c t o f f o r e s t d e s ig n p la n s on the
F o re stry C o m m issio n e sta te a p p e a r to h ave
sm o o th ed fu tu re p ro d u ctio n to som e ex ten t,
a n d th e re m a y b e s c o p e fo r s m o o th in g
prod uction further through the adjustm ent of
rotation ages. An alternative to this, however,
is to increase the area of w oodland to provide
fu rth e r tim b er su p p lie s to arrest an y fu tu re
decline in production.
In th e c a s e o f sa w n w o o d , h o w e v e r, se lfsu fficie n c y is ex p e cted to p eak at 45% (high
demand growth) to 55% (low demand growth) in
2025, falling back to 3 5 ^ 5 % in 2050. Considering
that sawnwood produced from domestic logs can
only currently m eet certain sectors of sawnwood
demand, this has interesting implications for the
domestic sawmilling industry. A t peak levels of
saw log p ro d u ction , the in d u stry m ay have to
c o n s id e r im p r o v in g th e m a rk e tin g o f the
domestic product if they are not to run up against
lim its to d e m a n d b a s e d on the q u a lity of
domestically produced sawnwood.
T h e tim in g o f the c u r r e n t fo r e c a s t p e a k in
production m eans that it w ill not be possible to
plant now to sustain the level of production at
about 16 m illion m 3. It is estim ated, however,
that only a slight dip in production, and a fairly
r a p id r e tu r n to a b o u t th is le v e l c o u ld b e
a c h ie v e d by in c re a s in g th e fo re s t e s ta te by
about 275 000 hectares (assum ing a yield class
of 12 m 3/ha/year) of m ainly conifer forest over
th e n e x t 25 y e a r s , w ith m o s t o f th is n ew
planting w eighted towards the present.
A fin a l co m m en t sh o u ld be m ad e ab o u t the
future p resen ce of a large p oten tial supply of
r e c y c le d fib r e .
T h e fo r e c a s t fo r p a p e r
c o n su m p tio n im p lie s at le a st a d o u b lin g of
consum ption by 2050. The UK paper industry
currently uses recycled paper from hom e and
abroad as a large proportion (about 50%) of its
raw fibre. This, com bined w ith the aim of 50%
recovery for paper produced in UK, im plies that
the availability of w astepaper m ay increase to
fo u r tim e s its c u r r e n t le v e l. T h e in d u s tr y
shou ld , therefore, b ear this in m ind in future
developm ent plans, as it w ould seem that the
supply of w astepaper is set to rise significantly
in the future.
A n oth er interestin g result can be found if the
su p p ly and d em an d fo reca st is sp lit into the
supply of saw logs and dem and for saw nw ood,
a n d th e s u p p ly o f s m a ll ro u n d w o o d an d
19
M o r r is , A . (1 9 9 1 ). P riv a te s e c to r s o ftw o o d
forecast. Forestry and British Timber 20 (11),
26-30.
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20
21
wm
A projection of wood supply from existing UK forests
Standing volume in million m
overbark
20.0
Non-coniferous sawlogs
Coniferous sawlogs
■ Non-coniferous small roundwood
■ Coniferous small roundwood
16.0
12.0
Forecasts show that wood supply will increase with demand up to 2025.
After that, if no new planting is undertaken, supply will fall while demand
will continue to rise, although the forecast of demand after 2025 is subject
to a wide margin of uncertainty. In practice, both new planting and efforts
to reschedule production may reduce the peak in production. A continuous
level of supply would be desirable for the development of the domestic
wood processing industry. An indication of the level of new planting that
would be required to bring this about is given in this paper.
Cover Designed and Produced by Colourgraphic Arts, Bordon, Hampshire.