Global Wood Markets: Consumption, Production and Trade By Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Section Geneva, Switzerland
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
Why s this important? I. Introduction 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, e.g. trade disputes New, e.g. subsidies for wood energy
II. Global forests and forest products
Forests and deforestation 3 2 1 Europe Asia & Pacific Net forest loss: 1990s 8.3 million ha/year 2000-2010 5.2 million ha/year Million hectares 0-1 -2-3 Mideast North America -4-5 Sources: FAO Global Forest Resources Assessments 2000, 2005, 2010 Africa S. America Natural Plantation Total Central America
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
Global roundwood harvests Source: State of the World s Forests, 2009, FAO.
World roundwood vs fuelwood 4.0 3.5 3.0 Billion m 3 2.5 2.0 1.5 Of 3.5 billion m 3, slightly more than half is used as woodfuel. 1.0 0.5 0.0 1961 1963 1965 1967 1969 1971 Industrial roundwood Woodfuel 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Source: FAOStat, 2009.
Woodfuel use Increasing in developed world, but efficient, environmentally sound combustion. 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
Production and consumption of wood pellets Pellet Production (1000 tons) 7000 6000 5000 4000 3000 2000 1000 0 North American Production North American Consumption European Consumption Other Consumption Total Consumption 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: UNECE/FAO Forest Products Annual Market Review, 2008-2009.
UNECE region = Europe + N. America + CIS Source: Worldmapper
UNECE roundwood harvests trends Europe Source: UNECE/FAO TIMBER Database, 2009.
Forest resources growing stock 70 60 50 Billion m3 40 30 20 s 10 0 Europe (41) North America CIS Growing stock Net annual increment Fellings Source:Temperate and Boreal Forest Resources Assessment 2000
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 Europe (41) N. Am erica CIS Net annual increment Fellings Source:Temperate and Boreal Forest Resources Assessment 2000
Forests increasing in UNECE region Central Europe Nordics & Baltics Northwest Europe Southeast Europe EU 27 Russia North America Fellings as % of annual growth 61% 72% 53% 45% 60% 34% 80% Sources: State of the World s Forests, 2007 and UNECE/FAO Forest Resources Assessment
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 Sources: Worldmapper & FAOStat, 2009
As shaped by forest products exports Sources: Worldmapper & FAOStat, 2009
As shaped by forest products imports Sources: Worldmapper & FAOStat, 2009
Amount (in million cubic metres WRME) 800 700 600 500 400 300 200 100 Western European wood and fiber requirements through 2020 Recovered paper Net pulp imports Industrial roundwood Total wood and fibre requirement Growing demand without energy Gap is residues 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Year Source: UNECE/FAO European Forest Sector Outlook Study, 2005
Industrial roundwood consumption Million m3 900 800 700 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Africa Americas Asia Europe Oceania Source: FAOStat, 2010
Industrial roundwood production Million m3 900 800 700 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Africa Americas Asia Europe Oceania Source: FAOStat, 2010
Sawnwood consumption 250 Million m3 200 150 100 50 Africa Americas Asia Europe Oceania 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAOStat, 2010
Sawnwood production 250 Million m3 200 150 100 50 Africa Americas Asia Europe Oceania 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAOStat, 2010
Panels production Million m3 140 120 100 80 60 40 20 Africa Americas Asia Europe Oceania 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAOStat, 2010
Panels consumption Million m3 120 100 80 60 40 20 Africa Americas Asia Europe Oceania 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAOStat, 2010
Paper & paperboard consumption Million metric tons 180 160 140 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Africa Americas Asia Europe Oceania Source: FAOStat, 2010
Paper & paperboard production Million metric tons 160 140 120 100 80 60 40 20 Africa Americas Asia Europe Oceania 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FAOStat, 2010
What happens when supply does not equal demand? IV. Trade
Global trade all products Doubled in 6 years Source: FAOStat, 2010
Global roundwood exports Globally exports = imports in value and volume, but not in direction! Europe leads in roundwood exports (including within Europe) Source: FAOStat, 2010
N. American roundwood exports USA increasing roundwood exports Source: FAOStat, 2010
CIS roundwood exports, mainly Russia Trend reversal in 2008 Log export taxes Global economic crisis Source: FAOStat, 2010
African and Asian roundwood exports Rising despite policies to encourage value-added processing Source: FAOStat, 2010
North American exports Housing crisis Source: FAOStat, 2010
2.5 US housing starts, 2002-2013 Million units 2 1.5 1 0.5 0 2011 2010 2009 2013 2012 Source: APA The Engineered Wood Association, 2009 2008 2007 2006 2005 2004 2003 2002
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
European exports 2x in 10 years Source: FAOStat, 2010
CIS exports, mainly Russia 4x in 10 years Log export taxes Source: FAOStat, 2010
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 Source: FAOStat, 2010
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
Paper products exports Source: FAOStat, 2010
Panel exports Source: FAOStat, 2010
Sawn softwood exports Source: FAOStat, 2010
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
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 Ed.Pepke@unece.org www.unece.org/timber