capacity building in sharing forest and market information prague & krtiny, czech republic, 25...

Capacity Building in Sharing Forest and Market Information

Prague & Krtiny, Czech Republic, 25 October 2005F

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Forest Products Market Interactions

Ed Pepke, Ph.D.Forest Products Marketing Specialist

UNECE/FAO Timber BranchGeneva, Switzerland



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Contents

I. Forest products markets• Production, consumption & trade• Global• Regional (N. America, Europe, Asia, Central

Asia)• Market sectors (logs, lumber, panels)

II. Certification and certified forest productsIII. Need for international forest products

market information



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Major information sources

• UNECE/FAO TIMBER database on forest products• FAOSTAT database on forest products• UNECE Timber Committee market forecasts• UNECE/FAO Forest products annual market

review, 2004-2005• Global Forest Products Model, by Buongiorno, et

al.• UNECE/FAO European Forest Sector Outlook

Study• FAO State of the World’s Forests, 2005• UN Comtrade analysis by European Forest

Institute



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I. Forest products markets



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Sectoral analysis: Logs

UNECE/FAO definitions:• “Roundwood” is industrial roundwood + fuelwood• “Industrial roundwood” as sawlogs, veneer logs, pulp logs and other industrial roundwood



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World production of roundwood, 1961-2003

Source: FAOSTAT

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

Bil

lio

n m

3

Industrial roundwood Fuelwood



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World roundwood utilization as fuel

• Over half used as fuel– Domestic heating– Cooking

• Mostly in developing countries

• Low value• Modern wood energy

– Small international trade– Growing market– Policy push in Europe



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Regional production of industrial roundwood, 1961-2010

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2010

Bil

lio

n m

3

Africa Asia America Europe

Source: FAOSTAT and FAO Global Forest Products Outlook Study



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Regional trade, all primary forest products, 2003

Source: FAOSTAT

0

10

20

30

40

50

60

70

80

$ B

illi

on

Exports Imports



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North American trade, all primary forest products, 1994-2003

Source: FAOSTAT

0

5

10

15

20

25

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Bill

ion

$

Canadian imports USA imports Canadian exports USA exports



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American industrial roundwood consumption and production to 2010

0

100

200

300

400

500

600

700

800

900

1000

1980 1994 2000 2005 2010

Mil

lio

n m

3

ConsumptionProduction

Source: Global Forest Products Model, 2003



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American industrial roundwood trade to 2010

0

5

10

15

20

25

30

35

1980 1994 2000 2005 2010

Mil

lio

n m

3

ExportsImports




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Factors affecting models and markets

• Gross domestic product (GDP)• Population• Costs and prices (labor, raw material, etc.)• Technological change• Government policies• Socio-economic trends

Source: FAO Global Forest Products Consumption, Production, Trade and Prices: Global Forest Products Model Projections to 2010. By Zhu, S; Tomberlin, D; Buongiorno, J., 1998



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European industrial roundwood consumption and production to 2010

0

100

200

300

400

500

600

1980 1994 2000 2005 2010

Mil

lio

n m

3





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European industrial roundwood trade to 2010

0

10

20

30

40

50

60

70

80

1980 1994 2000 2005 2010

Mil

lio

n m

3

ExportsImports




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Asian industrial roundwood consumption & production to 2010

0

100

200

300

400

500

600

1980 1994 2000 2005 2010

Mil

lio

n m

3





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Asian industrial roundwood trade to 2010

0

10

20

30

40

50

60

70

80

1980 1994 2000 2005 2010

Mil

lio

n m

3

ExportsImports




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Industrial Roundwood Production, 1990-2004

0

100

200

300

400

500

600

700

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Europe N. America



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Industrial Roundwood Production and Exports from Former USSR, 1992-2004

0

50

100

150

200

250

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Production Exports



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Industrial Roundwood Production, 1990-2004

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s

Armenia Azerbaijan Georgia

Kazakhstan Kyrgyzstan Mongolia

Tajikistan Turkmenistan Uzbekistan



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Industrial Roundwood Trade, 1990-2004

0

10

20

30

40

50

60

70

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Europe Imports N. America Imports Europe Exports N. America Exports



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Industrial Roundwood Imports (without Turkey), 1990-2004

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s

Armenia Azerbaijan Georgia

Kazakhstan Kyrgyzstan Mongolia

Tajikistan Turkmenistan Uzbekistan



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Industrial Roundwood Exports, 1990-2004

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s

Armenia Azerbaijan Georgia Kazakhstan

Kyrgyzstan Mongolia Tajikistan Turkey

Turkmenistan Uzbekistan



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China's Industrial Roundwood Market, 1992-2004

0

20

40

60

80

100

120

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Industrial Roundwood Production Industrial Roundwood Imports

Industrial Roundwood Exports



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European primary wood products demand, 1980-2020

0

200

400

600

800

1000

1200

1980 1985 1990 1995 2000 2005 2010 2015 2020

Mill

ion

m3

, RW

E

RWE=RoundWood Equivalent. Source: European Forest Sector Outlook Study, 2005.

MarketingOpportunity!



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Major influences on current European forest sector

• Expanding markets, but resources outgrowing markets• Intensifying trade• Recovery from transition to market economies• Non-wood forest products increasing demand, value• Renewable energy policy of EU and member countries• Globalization of forest products trade• Innovation of products and processing• Recycling of paper, use of byproducts

Source: UNECE/FAO European Forest Sector Outlook Study, 2005



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Sectoral analysis: Sawnwood



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N. American sawn softwood market, 1996-2005

Source: UNECE Timber Committee forecasts, 10.2004

90 000

100 000

110 000

120 000

130 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000

m3

Production Consumption



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N. American sawn softwood trade, 1996-2005

0

10 000

20 000

30 000

40 000

50 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000

m3

Imports Exports




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US sawnwood imports: Europe & S. Hemisphere

Sources: USDA-Foreign Ag. Svc. and Wood Markets Monthly, 2005

0

0.5

1

1.5

2

2.5

3

3.5

1996 1997 1998 1999 2000 2001 2002 2003 2004

Mil

lio

n m

3

EuropeS. Hemisphere



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• Excludes Canadian imports– 98% of US imports in ’96, but 87% 2004– Canadian-sourced imports up 8% 2004

• Offshore exporters aided by Softwood Lumber Agreement duties

• Imports of dimension softwood, some EWPs• European-sourced imports

– Increased 52% in 2004– Despite 45% rise in euro value vs. $– “Semi-natural forests” vs. plantation





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• Northern hemisphere sources in 20041. Germany (up 73%)2. Austria (up 75%)3. Sweden (down 2%)4. Czech Rep., Lithuania, Russia, Finland, Estonia

• Southern hemisphere sources in 20041. Brazil (up 37%)2. Chile (up 35%)3. New Zealand (down 3%)4. Argentina, Mexico, other





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European sawn softwood market, 1996-2005

60 000

70 000

80 000

90 000

100 000

110 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000

m3





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European sawn softwood trade, 1996-2005

0

10 000

20 000

30 000

40 000

50 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000

m3

Imports Exports




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Sawnwood Production, 1990-2004

0

20

40

60

80

100

120

140

160

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Europe N. America



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Sawnwood Trade, 1990-2004

0

10

20

30

40

50

60

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Europe Imports N. America Imports Europe Exports N. America Exports



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Russian sawn softwood market, 1996-2005

0

5 000

10 000

15 000

20 000

25 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000

m3





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Russian sawn softwood trade, 1996-2005

0

2 000

4 000

6 000

8 000

10 000

12 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1000 m

3

Imports Exports




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Asia sawnwood production and consumption to 2010

0

20

40

60

80

100

120

140

160

180

1980 1994 2000 2005 2010

Mill

ion

m3





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Asia sawnwood trade to 2010

0

5

10

15

20

25

30

1980 1994 2000 2005 2010

Mil

lio

n m

3

ExportsImports




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Sawnwood Production, 1990-2004

0

100000

200000

300000

400000

500000

600000

Cu

bic

met

res

Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Mongolia



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Sawnwood Exports, 1990-2004

0

50000

100000

150000

200000

250000

300000

350000

400000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s






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Sawnwood Imports, 1990-2004

0

100000

200000

300000

400000

500000

600000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s






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Sawnwood Exports from Central Asia, 2003

Source: UN Comtrade/European Forest Institute



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China's Sawnwood Market, 1992-2004

0

5

10

15

20

25

30

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Production Imports Exports



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Sectoral analysis: Panels



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North America structural panel production,

1996-2005

0

5 000

10 000

15 000

20 000

25 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

10

00

m3

OSB Plywood




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European OSB market, 1996-2005

0

1 000

2 000

3 000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

10

00

m3





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America panel consumption & production to 2010

0

10

20

30

40

50

60

70

80

90

1980 1994 2000 2005 2010

Mil

lio

n m

3





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America panel trade to 2010

0

2

4

6

8

10

12

14

16

18

1980 1994 2000 2005 2010

Mil

lio

n m

3

ExportsImports




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Europe panel consumption & production to 2010

0

10

20

30

40

50

60

70

1980 1994 2000 2005 2010

Mil

lio

n m

3





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Asia panel consumption & production to 2010

0

10

20

30

40

50

60

70

80

90

1980 1994 2000 2005 2010

Mil

lio

n m

3





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Panels Production, 1990-2004

0

2000

4000

6000

8000

10000

12000

14000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Cub

ic m

etre

s

Armenia Azerbaijan Georgia Kazakhstan Mongolia



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China's Panel Market, 1992-2004

0

5

10

15

20

25

30

35

40

45

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3




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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”, 2003



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New EFSOS market conclusions

• Collapse in CIS and eastern Europe, 1990s

• Partial recovery• Increased small log demand• Increased recovered

materials• Intensifying trade• Declining log prices• Renewable energy



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Productivity in wood industry by region

Source: FAO Trends and current status of the contribution of the forestry sector to national economies, 2004

0

10

20

30

40

50

60

70

80

90

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

$1

00

0 p

er

em

plo

ye

e

North America Developed Asia-PacificWestern Europe Latin AmericaWest and Central Asia Eastern Europe



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Summary: Key market issues

• Forest law enforcement, governance and trade (illegal logging and trade of illegally sourced products)

• Forest sector development policies• Policies for promoting use of sustainably

produced products• Climate change policies• Wood energy policy• Trade policy, tariff and non-tariff barriers

Source: Forest Products Annual Market Review, 2004-2005



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II. Certified forest products markets



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Certification of sustainable forest management

• Over 250 million hectares worldwide (6%)• Over half of world’s certified area in N.

America• Another 40% in Europe• Only 1% in tropical forests



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Area of certified forests, 1996-2004


0

20

40

60

80

100

120

140

160

180

200

Mil

lio

n h

ec

tare

s

SFIPEFCFSCCSAATFS



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Top 8 countries certified forest area,2003 and 2004

0

10

20

30

40

50

60

70

PEFC

FSC

SFI

CSA

ATFS

Mill

ion

hec

tare

s




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Certification schemes’ market share


PEFC30%

FSC25%

SFI23%

CSA15%

ATFS5%

Other2%



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Certified forests by ownership type

Source: Savcore Indufor, 2005

Industry50%

State24%

NIPFO23%

Communal2%

Other1%

Three quarters of the world's certified forests are privately owned or managed



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Certified forest products markets

• Growing demand via wholesalers & retailers• Demand boost by government procurement• Private consumer demand remains minor• Chain-of-custody key current development• Most certified timber sold without label

– Potential over 300 million m3 (20% world roundwood production)

– Lost opportunities for market promotion and PR




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Certified forest products markets

• Certification system conflicts discredit forest products in the marketplace

• Variety of schemes necessary for different stakeholders’ interests

• Impacts of forest certification locally significant• Difficulties in certifying natural tropical forests,

but less so for tropical plantations• Markets developing slower than forest

certification

Source: Savcor Indufor, 2005



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Certification

• Introduced to combat deforestation in tropics• Most certified forests are temperate & boreal• Therefore, not an instrument to combat

deforestation, but to promote sustainable forest management

• Mutual recognition between schemes an issue• Potential additional roles

– Verification mechanism in Kyoto Protocol– Indication of source, but not proof of legality

Sources: Savcor Indufor, and UNECE/FAO, 2005



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III. Need for international forest products market

information



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Capitalizing on market opportunities

• Domestic market– Current needs– Developing demand for wood products– Or in low-forest countries, for non-wood goods and

services– Information for government, trade associations,

forestland owner associations, industry

• Export markets– Increasing imports in developed countries (example:

USA)– Increasing imports in China, next India– Usually higher profitability than domestic, CIS market– Attracting foreign investment



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Policy interactions

• Developing new policies to support forest sector– Forestland management– Infrastructure and institutions– Restitution of private land, and new private

forestland owners and their associations– Market development (domestic and export)

• Monitoring policy effectiveness• Trade association policies too



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Forest resource interactions

• Country’s current forest– What is its market potential– Wood products– Non-wood products– Services (watershed protection, recreation, eco-

tourism, hunting & fishing)

• Planning forest management for future markets– What species are needed?– For fibre, pulpwood or logs?

• Resource is global, transportable



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Discussion and Questions



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Ed PepkeForest Products Marketing Specialist

UNECE/FAO Timber Branch448 Palais des Nations

CH-1211 Geneva 10, Switzerland

Telephone +41 22 917 2872Fax +41 22 917 [email protected]

www.unece.org/trade/timber

capacity building in sharing forest and market information prague & krtiny, czech republic, 25...

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