1. B r o a d S p e c t r u m U t i l i s a t i o n o f W o o d June 14 th – 15 th 2005, Vienna - Austria Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland WOOD PRICES IN POST-SOCIALISTIC ECONOMY

2. Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland In market conditions, wood and forest products prices represent the main economic category of the forest-wood sector resources management!

3. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland Key drivers of the forest-wood sector: appropriate roundwood prices stable macro-economic policy free trade development of sector analyses need for environmental protection

4. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland Ownership structure of roundwood removals in Poland Private forests 4% Public forests 96% 99,5% owned by the State Treasury of which: 98,9% State Forests 0,7% national parks 0,5% local community owned

5. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland the maximum wood prices are set by prices of roundwood alternatives (cement, steel, plastic, non-ferrous metals, etc.) the minimum wood price is represented by the cost of removals (of which: costs of planting, nurturing) = = DEMAND SUPPLY

6. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland The regional differences in prices of the same wood sortments and types can be attributed to: general level of development of individual regions natural location regional market supply and demand which depend, among others, on the number of woodworking plants and volumes of roundwood generated in individual regions roundwood sales methods (tenders, free market sales, etc.) cost of roundwood transportation to woodworking plants potential for competitive imports of roundwood from abroad (this factor is of special importance in the border areas)

7. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland The main factors that can drive the global demand for roundwood to a different extent and, as a result, drive price fluctuations: population growth general economic growth (economic development) technical progress

8. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland World populations * estimations Source: FAOSTAT

9. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland Technological and product innovations play an important role in the entire forest-forest industry chain. These innovations are aimed at: improving biological characteristics of trees, including efficiency of a unit space reducing cost of processing and increasing material efficiency designing new and attractive forest products to win new sales markets

10. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland As regards roundwood, demand generated by buyers is the key pricing driver. However, pricing can be impacted also by such factors as: costs of roundwood removals costs of transport, in particular in the case of roundwood imports costs of forests exploitation (excluding rental fees or land prices) costs of forest non-production functions; delivery of these functions by forests (without the State subsidies) significantly increases the ongoing costs of forest management which translates directly into wood prices

11. WOOD PRICES IN POST-SOCIALISTIC ECONOMY Wladyslaw Strykowski, Prof. Dr. Wood Technology Institute, Poznan, Poland Price of lumber Economic cycles Sales forms Imports of roundwood Quality-size parameters of individual sortments Price flexibility Production of alternatives assortment Other price drivers