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Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Forest Products Market Interactions Ed Pepke,

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Presentation on theme: "Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Forest Products Market Interactions Ed Pepke,"— Presentation transcript:

1 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Forest Products Market Interactions Ed Pepke, Ph.D. Forest Products Marketing Specialist UNECE/FAO Timber Branch Geneva, Switzerland

2 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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 products III.Need for international forest products market information

3 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

4 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 I. Forest products markets

5 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Sectoral analysis: Logs UNECE/FAO definitions: “Roundwood” is industrial roundwood + fuelwood “Industrial roundwood” as sawlogs, veneer logs, pulp logs and other industrial roundwood

6 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 World production of roundwood, 1961-2003 Source: FAOSTAT

7 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

8 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Regional production of industrial roundwood, 1961-2010 Source: FAOSTAT and FAO Global Forest Products Outlook Study

9 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Regional trade, all primary forest products, 2003 Source: FAOSTAT

10 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 North American trade, all primary forest products, 1994-2003 Source: FAOSTAT

11 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 American industrial roundwood consumption and production to 2010 Source: Global Forest Products Model, 2003

12 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 American industrial roundwood trade to 2010 Source: Global Forest Products Model, 2003

13 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

14 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European industrial roundwood consumption and production to 2010 Source: Global Forest Products Model, 2003

15 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European industrial roundwood trade to 2010 Source: Global Forest Products Model, 2003

16 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Asian industrial roundwood consumption & production to 2010 Source: Global Forest Products Model, 2003

17 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Asian industrial roundwood trade to 2010 Source: Global Forest Products Model, 2003

18 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

19 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

20 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

21 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

22 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

23 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

24 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

25 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European primary wood products demand, 1980-2020 Million m3, RWE RWE=RoundWood Equivalent. Source: European Forest Sector Outlook Study, 2005. Marketing Opportunity!

26 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

27 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Sectoral analysis: Sawnwood

28 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 N. American sawn softwood market, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

29 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 N. American sawn softwood trade, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

30 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 US sawnwood imports: Europe & S. Hemisphere Sources: USDA-Foreign Ag. Svc. and Wood Markets Monthly, 2005

31 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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 US sawnwood imports: Europe & S. Hemisphere Sources: USDA-Foreign Ag. Svc. and Wood Markets Monthly, 2005

32 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Northern hemisphere sources in 2004 1.Germany (up 73%) 2.Austria (up 75%) 3.Sweden (down 2%) 4.Czech Rep., Lithuania, Russia, Finland, Estonia Southern hemisphere sources in 2004 1.Brazil (up 37%) 2.Chile (up 35%) 3.New Zealand (down 3%) 4.Argentina, Mexico, other US sawnwood imports: Europe & S. Hemisphere Sources: USDA-Foreign Ag. Svc. and Wood Markets Monthly, 2005

33 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European sawn softwood market, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

34 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European sawn softwood trade, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

35 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

36 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

37 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Russian sawn softwood market, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

38 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Russian sawn softwood trade, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

39 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Asia sawnwood production and consumption to 2010 Source: Global Forest Products Model, 2003

40 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Asia sawnwood trade to 2010 Source: Global Forest Products Model, 2003

41 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

42 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

43 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

44 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Sawnwood Exports from Central Asia, 2003 Source: UN Comtrade/European Forest Institute

45 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

46 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Sectoral analysis: Panels

47 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 North America structural panel production, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

48 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 European OSB market, 1996-2005 Source: UNECE Timber Committee forecasts, 10.2004

49 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 America panel consumption & production to 2010 Source: Global Forest Products Model, 2003

50 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 America panel trade to 2010 Source: Global Forest Products Model, 2003

51 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Europe panel consumption & production to 2010 Source: Global Forest Products Model, 2003

52 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Asia panel consumption & production to 2010 Source: Global Forest Products Model, 2003

53 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

54 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005

55 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

56 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

57 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Productivity in wood industry by region Source: FAO Trends and current status of the contribution of the forestry sector to national economies, 2004

58 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

59 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 II. Certified forest products markets

60 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

61 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Area of certified forests, 1996-2004 Source: Forest Products Annual Market Review, 2003-2004

62 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Top 8 countries certified forest area, 2003 and 2004 Million hectares Source: Forest Products Annual Market Review, 2003-2004

63 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Certification schemes’ market share Source: Forest Products Annual Market Review, 2003-2004

64 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Certified forests by ownership type Source: Savcore Indufor, 2005 Three quarters of the world's certified forests are privately owned or managed

65 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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 m 3 (20% world roundwood production) –Lost opportunities for market promotion and PR Source: Forest Products Annual Market Review, 2003-2004

66 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

67 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

68 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 III. Need for international forest products market information

69 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

70 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

71 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 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

72 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Discussion and Questions

73 Capacity Building in Sharing Forest and Market Information Prague & Krtiny, Czech Republic, 25 October 2005 Ed Pepke Forest Products Marketing Specialist UNECE/FAO Timber Branch 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/trade/timber

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