Wood sales system in Scandinavia Wood market in Poland – towards stabilization Marjo Maidell/Ritva Toivonen, PTT Poznań

Table of Contents Facts about forest resources State intervention Sellers and buyers Wood sales transaction Situation now and in the future Conclusions

Facts about forest resources (I) FINLAND –Forest area 20,2 mill. hectares –Growing stock volume 2,2 mill. m³ –Ownership structure: Private 60 % State 26 % Industry 9 % –In 2005 the production of wood-products industries 14,0 mill. m³ and of pulp and paper industries 23,5 mill. tons Source:Finnish Statistical Yearbook of Forestry 2006, Metinfo, Finnish Forest Research institute

Facts about forest resources (II) SWEDEN –Forest area 23,0 mill. hectares –Growing stock volume 3,2 mill. m³ –Ownership structure: Private 51 % Industry 24 % State 18 % –In 2006 the production of wood-products industries 18,5 mill. m³ and of pulp and paper industries 24,2 mill. tons Source: Skogsstatistisk årsbok 2007, FAO, Global Forest Resources Assessment 2005

State intervention FINLAND –Mandatory by law Minimum age/size of the harvestable stand Forest management announcement before harvesting Biodiversity conservation Forest regeneration after harvesting compulsory (recommendation when planting: pine , spruce seedlings/ha) Membership of forest management association –Subsidies for f.ex. regeneration, biodiversity conservation, thinnigs –Wood sales profit taxation

Sellers and buyers (I) FINLAND –In 2006 removals of industrial roundwood 50,7 mill. m³ (of which 77 % from private, 13 % industry-owned and 10 % state-owned forests) –Roundwood trade from private forests 32,4 mill. m³ in 2006 –Over private forest holdings, average size 24 hectares –Forest management associations (middlemen) provide information concerning prices, bids, market situation etc Source: Finnish Statistical Yearbook of Forestry 2006; Metinfo, Finnish Forest Research institute

Sellers and buyers (II) FINLAND –Roundwood demand concentrated, three biggest forest industry companies buy a large share of the wood –Companies organize their procurement by regional wood purchasing offices –Forest service offices in the cities

Sellers and buyers (III) SWEDEN –Removals of industrial roundwood 55,4 mill. m³ in 2006 (of which around 60 % from private forests) –Average size 45 hectares –Size of the wood markets smaller than in Finland Source: Skogsstatistisk årsbok 2007, Tilli et al. 2004

Structure of the wood sales (I) FINLAND –Use of Forest management associations common –Forest owner can contact representative of the industry and ask for a bid –Companies offer different partnership contracts, such as wood sales cooperation contracts, forest service contract, forest regeneration contracts etc Source: Tilli et al. 2004

Structure of the wood sales (II) –Standing sales (83 %) and delivery sales (17 %) are the type of sales in use –Average size of wood sales from private forests is m³ –In standing sales, harvest operation, bucking and transfer to the roadside is mechanised and conducted by subcontractors –Collecting of energywood has increased, especially together with final harvests and thinnings of overgrown young stands Source: Metinfo, Finnish Forest Research institute, Karppinen et al. 2002

Structure of the wood sales (III) Source: Finnish Forest Research Institute

Structure of the wood sales (IV) SWEDEN –Most commonly delivery sales, with fixed price lists –Harvest operation, bucking and transfer to the roadside can be bought from the buyer of the wood or from other entrepreneur –Regional forest owners’ co-operatives buy wood from their members and deliver it to their own forest industry –After-sale adjustment for wood often takes place

Market situation now and in the future (I) FINLAND –Commercial roundwood removals between January- July 15 % higher than last year (2006), thanks to the increased demand –Growth mainly from private forests –Demand hiked up prices, in 2007 stumpage prices in average 30 % (nominal) higher than in 2006 –PTT forecasts that strong demand continues during 2008 Source: PTT’s forecast for the Finnish forset sector , Autumn 2007 (in Finnish); Metinfo, Finnish Forest Research institute

Market situation now and in the future (II)

Market situation now and in the future (III)

Market situation now and in the future (IV)

Market situation now and in the future (V) –In the future Changes in the ownership structure, especially aging Importance of the forest service “packages” and different contracts increase Increasing role of forest as a source of energy Increased pressure for forest conservation and certification Level of the industrial activity in the Nordic countries in the future?

Conclusions Private ownership dominate Efficiently organized industrial use of forests Powerful forest cluster Intensive forest legislation Several challenges in the future

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