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
ƒ
ƒ
V.
Primary
Secondary
Conclusions
VI. Discussion
International Forestry and Global Issues
18 May 2010, Nancy, France
I. Introduction
ƒ 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
ƒ What forest products?
• Wood vs non-wood
• Traditional and new products
ƒ Topical issues
• Traditional, e.g. trade disputes
• New, e.g. subsidies for wood energy
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II. Global forests and forest products
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Forests and deforestation
3
Asia &
Pacific
Net forest loss:
1990s 8.3 million ha/year
2000-2010 5.2 million ha/year
Million hectares
2
1
Europe
0
-1
Mideast
North
America
-2
-3
-4
Africa
-5
S. America
Sources: FAO Global
Forest Resources
Assessments 2000, 2005,
2010
Natural
Plantation
Central
America
Total
International Forestry and Global Issues
18 May 2010, Nancy, France
Why deforestation?
ƒ Conversion to other uses: agriculture, palm oil,
pasture, urbanization
ƒ Fire, insects, disease
ƒ Root causes: poverty, firewood, illegal logging
ƒ Offset by plantations and natural expansion
ƒ 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.
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World roundwood vs fuelwood
4.0
3.5
3.0
2.0
Of 3.5 billion m3, slightly more than half
is used as woodfuel.
1.5
1.0
0.5
0.0
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
Billion m3
2.5
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Industrial roundwood
Woodfuel
Source: FAOStat, 2009.
Woodfuel use
Increasing in
developed world,
but efficient,
environmentally
sound combustion.
Inefficient
domestic
heating and
cooking
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Modern wood energy
ƒ Efficient, clean combustion
ƒ Carbon neutral
ƒ Renewable energy
ƒ Market outlet for low-grade fiber
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Modern wood energy
ƒ Processed fuels
• Not bulky firewood
• Conveyable chips (high moisture)
• Dry, high calorie pellets and briquettes
ƒ Next…
• Biorefineries: pulp, energy, chemicals
• Liquid and gaseous fuels
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Production and consumption of wood pellets
7000
North American Production
Pellet Production (1000 tons)
North American Consumption
6000
European Consumption
5000
Other Consumption
4000
Total Consumption
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.
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UNECE region = Europe + N. America + CIS
Source: Worldmapper
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UNECE roundwood harvests trends
Europe
Source: UNECE/FAO
TIMBER Database, 2009.
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Forest resources growing stock
70
60
Billion m3
50
40
s
30
20
10
0
Europe (41)
Grow ing stock
North America
Net annual increment
CIS
Fellings
Source:Temperate and Boreal Forest Resources Assessment 2000
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Net annual growth vs fellings
1
0 .9
0 .8
0 .7
Billion m3
0 .6
0 .5
0 .4
0 .3
0 .2
0 .1
0
E u ro p e (4 1 )
N . A m e ric a
N e t a n n u a l in c re m e n t
C IS
F e llin g s
Source:Temperate and Boreal Forest Resources Assessment 2000
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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
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Increasing forests & increasing
demands
ƒ Increasing demand for paper and paper products,
e.g. packaging
ƒ Increasing demand for wood products
ƒ Increasing demand for wood energy
ƒ = competition!
ƒ Where will wood come from?
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III. Consumption and production
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World shaped by political boundaries
Source: Worldmapper
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World shaped by population
Source: Worldmapper, 2009
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World shaped by forest products production
Sources: Worldmapper & FAOStat, 2009
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World shaped by wood and paper consumption
Sources: Worldmapper & FAOStat, 2009
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As shaped by forest products exports
Sources: Worldmapper & FAOStat, 2009
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As shaped by forest products imports
Sources: Worldmapper & FAOStat, 2009
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Western European wood and fiber
requirements through 2020
800
Recovered paper
Net pulp imports
Amount (in million cubic metres WRME)
700
Gap is residues
Industrial roundwood
Total wood and fibre requirement
600
500
Growing demand without energy
400
300
200
100
0
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Year
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Source: UNECE/FAO
European Forest Sector
Outlook Study, 2005
Industrial roundwood consumption
900
800
Million m3
700
Africa
600
Americas
500
Asia
400
Europe
300
Oceania
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Industrial roundwood production
900
800
Million m3
700
Africa
600
Americas
500
Asia
400
Europe
300
Oceania
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Sawnwood consumption
250
200
Million m3
Africa
Americas
150
Asia
100
Europe
Oceania
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Sawnwood production
250
200
Million m3
Africa
Americas
150
Asia
100
Europe
Oceania
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Panels production
140
120
Million m3
100
Africa
Americas
80
Asia
60
Europe
Oceania
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Panels consumption
120
Million m3
100
Africa
80
Americas
Asia
60
Europe
40
Oceania
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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Paper & paperboard consumption
180
Million metric tons
160
140
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
Million metric tons
140
120
Africa
100
Americas
80
Asia
60
Europe
Oceania
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: FAOStat, 2010
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What happens when supply
does not equal demand?
IV. Trade
International Forestry and Global Issues
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Global trade all products
Doubled in
6 years
Source: FAOStat, 2010
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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
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N. American roundwood exports
USA increasing
roundwood
exports
Source: FAOStat, 2010
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CIS roundwood exports, mainly Russia
Trend reversal in 2008
• Log export taxes
• Global economic crisis
Source: FAOStat, 2010
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African and Asian roundwood exports
Rising despite policies to
encourage value-added
processing
Source: FAOStat, 2010
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North American exports
Housing crisis
Source: FAOStat, 2010
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US housing starts, 2002-2013
2.5
Million units
2
1.5
1
0.5
0
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
Source: APA – The Engineered
Wood Association, 2009
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Impacts of US housing crisis
ƒ Global economic crisis (a cause)
ƒ Massive restructuring of N. American wood
industry (unemployment)
ƒ Local communities devastated
ƒ Long-term consequences for forest sector
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European exports
2x in 10 years
Source: FAOStat, 2010
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CIS exports, mainly Russia
4x in 10 years
Log export taxes
Source: FAOStat, 2010
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Exporting primary vs secondary
ƒ Primary (logs, sawnwood, panels, pulp) are
commodity products
• Easy to export
• Correspond to market price
ƒ Secondary, value-added products
• Higher value and profits
• Require greater manufacturing and marketing skills
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Secondary-processed
products exports
Source: FAOStat, 2010
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China is the motor!
Based on domestic and imported roundwood
World’s largest exporter of wooden furniture
and other secondary-processed products
5x in 10 years,
no downturn in 2008
Source: FAOStat, 2010
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Paper products exports
Source: FAOStat, 2010
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Panel exports
Source: FAOStat, 2010
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Sawn softwood exports
Source: FAOStat, 2010
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V. Trade conclusions
ƒ Global timber trade doubled over last decade
ƒ Greatest increase in secondary-processed products
ƒ Slowdown in 2008, 2009 with global economic
crisis
ƒ China became largest roundwood importer and
largest secondary-processed products exporter
ƒ Trade barriers distort markets
• Export taxes, subsidies, tariff and non-tariff
• Intentionally for national reasons
• Consequences for partners’ forest sector
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VI. Discussion
International Forestry and Global Issues
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Ed Pepke
Forest Products Marketing Specialist
UNECE/FAO Timber Section
448 Palais des Nations
CH-1211 Geneva 10, Switzerland
Telephone +41 22 917 2872
Fax +41 22 917 0041
[email protected]
www.unece.org/timber
International Forestry and Global Issues
18 May 2010, Nancy, France