1. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Global Outlook: Supply & Demand for Wood Products Ed Pepke, Ph.D. Forest Products Marketing Specialist Food and Agricultural Organization UN Economic Commission for Europe Geneva, Switzerland

2. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Outline Forest products markets –Production, consumption & trade –Global –Regional –Sectoral Forest resources Growing the market

3. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sources UNECE/FAO TIMBER database on forest products statistics UNECE/FAO Temperate & Boreal Forest Resources Assessment FAO Global Forest Products Outlook Study FAO Global Forest Resources Assessment FAOSTAT Forestry Database website UNECE/FAO Timber Bulletin “Forest products annual market analysis, 2002-2005 UNECE Timber Committee market forecasts

4. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest products markets

5. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA World production of roundwood, 1961-2003 Source: FAOSTAT

6. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Regional production of industrial roundwood, 1961-2010 Source: FAOSTAT and FAO Global Forest Products Outlook Study

7. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Regional trade, all primary forest products, 2002 Source: FAOSTAT

8. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. American trade, all primary forest products, 1993-2002

9. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sectoral analysis: Lumber

10. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. American softwood lumber market, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

11. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. American softwood lumber trade, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

12. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. American hardwood lumber market, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

13. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. American hardwood lumber trade, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

14. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA American lumber consumption & production, 1980-2010 Source: FAO Global Forest Products Outlook Study

15. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA American lumber trade, 1980-2010 Source: FAO Global Forest Products Outlook Study

16. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Factors affecting models and markets Gross domestic product (GDP) Population Costs and prices (labor, raw material, etc.) Technological change Government policies Socio-economic trends Global Forest Products Consumption, Production, Trade and Prices: Global Forest Products Model Projections to 2010 By Zhu, S; Tomberlin, D; Buongiorno, J. Published by FAO, 1998

17. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European softwood lumber market, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

18. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European softwood lumber trade, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

19. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European hardwood lumber market, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2004

20. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European hardwood lumber trade, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2004

21. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Europe lumber consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

22. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Europe lumber trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

23. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Russian softwood lumber market, 1992-2004 Source: UNECE Timber Committee forecasts, 10.2003

24. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia lumber production & consumption outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

25. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia lumber trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

26. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA An aside Japanese and Korean tariffs

27. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Japanese and Korean tariffs In context of WTO trade negotiations, will not support elimination of wood tariffs Forest product tariffs protect the domestic industry interest Tariffs protect the environment, preserve limited natural forest resources and maintain minimum harvest levels for forest management Forestry Agencies of both governments will continue this bilateral forum to protect common trade interests in the forest products sector. Source: Global Agriculture Information Network, January 2004.

28. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sectoral analysis: Panels

29. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA North America structural production, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2003

30. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European OSB market, 1995-2004 Source: UNECE Timber Committee forecasts, 10.2004

31. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA America panel consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

32. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA America panel trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

33. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Europe panel consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

34. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Europe panel trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

35. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia panel consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

36. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia panel trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

37. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA An aside on the Chinese market

38. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA China’s expanding trade Total export value 2003: $390 billion, +36% Total import value 2003: 371 billion, +39% Trade surplus: $20 billion China & Japan 2003 trade: $120 billion, +31% China & US 2003 trade: $114 billion, +29% China & Europe 2003 trade: $112 billion, +43% “Sudden growth” of primary product imports: timber, steel, oil, soybeans Source: “China Forest Products Market Information”, December 2003

39. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sino-US furniture trade: US side Chinese share of US market increasing rapidly Chinese furniture exports to US –2000: $1.7 billion –2002: $2.9 billion Anti-dumping investigation requested by 28 American furniture manufacturers in November 2003 US furniture industry earnings down 70% US furniture workforce down 34,000 Source: “China Forest Products Market Information”, December 2003

40. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sino-US furniture trade: Chinese side 60% of China’s furniture exports are “American” furniture –Produced by US-owned companies –US wood –US technology and styles Advantage for US manufacturers is low manufacturing costs –Labor –Energy –Taxes Source: “China Forest Products Market Information”, December 2003

41. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA China’s booming timber imports Housing construction –Only minority wood-based –Green and healthy communities –Affordable Renovation market for houses and municipal Infrastructure development Interior woodwork and furnishings Olympic-related construction (2008 Beijing) Source: “China Forest Products Market Information”, December 2003

42. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Sectoral analysis: Paper

43. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. America paper & paperboard consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

44. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA N. America paper & paperboard trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

45. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA European paper & paperboard consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

46. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Europe paper & paperboard trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

47. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia paper & paperboard consumption & production outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

48. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Asia paper & paperboard trade outlook, 1980-2010 Source: FAO Global Forest Products Outlook Study

49. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Summary: Key market issues (1 of 2) Illegal logging and trade of illegally-sourced wood Certification of sustainable forest management, markets for certified forest products Policies for sound use of wood, wood promo Industrial development policies and structural oversupply Source: Forest Products Annual Market Analysis, 2002-2004

50. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Summary: Key market issues (2 of 2) Climate change policy Wood energy promotion policies Trade policy, tariff and non-tariff barriers Source: Forest Products Annual Market Analysis, 2002-2004

51. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources

52. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Annual change in forest area, 1990-2000, (million hectares) Deforestation Increase in forest area Net change in forest area Tropics -14.2+1.9-12.3 Non- tropics -0.4+3.3+2.9 World -14.6+5.2 -9.4 Source: FAO Global Forest Resources Assessment 2000

53. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Annual change in forest area, 1990-2000 N & C America South America Europe Asia Africa Oceania Source: FAO Global Forest Resources Assessment 2000

54. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Reasons behind deforestation Conversion to other land uses (0.4% of worlds’ forests annually in the ’90s) –Agricultural, including grazing –Urbanization Unsustainable silvicultural practices –Unmanaged harvesting –Poor regeneration –Overharvesting fuelwood

55. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources in N. America 80% of net annual increment harvested Forest volume increases ~3 million m 3 daily Forest area 1990 to 2000 –USA +0.2% –Canada, no significant change Sources: State of the World’s Forests 2001; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000

56. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources in Europe Only 60% of wood grown is harvested Forest volume increases ~2 million m 3 daily Forestland increases by 500,000 hectares per year Sources: State of the World’s Forests 2003; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000

57. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA State of Europe’s Forests Resources increasing Forest health and vitality are critical Productive functions maintained Biodiversity is a focus Plantations are only 3% Protective forests are 12% Socio-economic functions important Source: Ministerial Conference on the Protection of Forests in Europe, 2003.

58. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources in Russian Federation Only 16% of wood grown is harvested Forest volume increases ~3 million m 3 daily Forest area 1990 to 2000: no significant change Sources: State of the World’s Forests 2003; Global Forest Resources Assessment 2000; Temperate and Boreal Forest Resources Assessment 2000

59. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources: growing stock Million m3 Source:Temperate and Boreal Forest Resources Assessment 2000.

60. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources: NAI vs. fellings Million m3 Source:Temperate and Boreal Forest Resources Assessment 2000.

61. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Forest resources: NAI vs. fellings Fellings as % of NAI Europe-4160% EU-1564% Nordic countries72% Baltic countries50% Central & eastern Europe 56% Russia16% North America80% Source:Temperate and Boreal Forest Resources Assessment 2000.

62. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Regional forest resource utilization Note: Not all “forest available for wood supply” Roundwood does not include chips. Therefore, %ages are gross. Sources: State of the World’s Forests 2003, FAO Stat. Wood in forest (billion m3) Roundwood harvest 2002 (million m3) Roundwood harvest 2002 (%) S & C America1174390.4 % Russia891920.2 % N. America606781.1 % Africa466131.3 % Asia351,0052.9 % Europe283951.4 % Oceania11630.6 %

63. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Removals considerably below growth Wide variance in utilization rates of NAI Growing stock increasing in Europe Southern hemisphere plantations expanding Oversupply compared to demand for wood Increasing alternative demands on forests Forest resources summary

64. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Growing the market

65. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Growing too much wood? Not enough wood products demand? What are the solutions?

66. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Grow the wood markets Guarantee that today’s wood products meet consumers’ needs Develop new products to meet evolving needs Develop new markets for wood products: substitute for non-renewable materials

67. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA How can we grow the wood markets? Engage the industry: build coordinated, international promotion programs Create favorable policy environments Promote public awareness of key issues and messages

68. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Examples FAO/UNECE Forest Communicators Network –creates a positive image of the forest and forest industries sector –networking among members –identifying key common messages and concepts –building PR capacity Wood Promotion Network

69. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Market effects of wood promotion Multi-country wood promotion essential to enlarge wood’s market share Promotion must be cost justified Identify and know target markets: cultural and technical dimensions Fund raising a problem in fragmented industry Key elements: competence, neutrality, credibility, resources Source: UNECE/FAO Forest Products Annual Market Review, 2001-2002

70. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA UNECE Timber Committee recommendations Develop new products to expand existing markets Establish new markets to meet consumers’ needs Build international cooperation in promoting environmental advantages of sustainable wood production Promote wood culture

71. Global Competition: Forest Products Imports Exports Wausau, Wisconsin, USA, 24 February 2004 Photo: APA Questions and Discussion Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Branch 439 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/trade/timber