Global trade of softwood logs increased in 2010 after having fallen 30 percent in two years

Author: Hakan Ekstrom, Wood Resources International

As a sign of the improved markets for forest products in 2010, global trade of softwood logs increased by approximately 20 percent last year. An estimated 81 million m3 of softwood logs were traded in the world in 2010, which can be compared to over 95 million m3 in the record year of 2007 (Graph 1). Western Europe and Asia are the regions with the greatest rise in imports, with China, South Korea, Germany and Sweden increasing imports the most. After two years of declining shipments, 2010 may very well be the turning point when global log trade will start growing again. However, the growth is not of the magnitude such that global shipments will reach the pre-financial crises levels of 2006 and 2007 anytime soon.

China imports are third of globally traded softwood logs in 2010

China is by far the world’s biggest importer of softwood logs, accounting for about a third of all traded logs in 2010. During the first three months this year, imports to China were up 35 percent from the same period in 2010, reaching the highest level on record. Russia and New Zealand are the largest suppliers, together accounting for almost 77 percent of the total imports, while North America supplied about (Graph 2). Although Russia is still the largest supplier of logs, New Zealand has increased its market share from 10 percent in 2008 to a 27% share in the 1Q/11.

Two factors have driven the increase in Chinese log importation: higher production levels in the forest industry, and a lack of domestic timber resources. Despite the Chinese government’s efforts to become more independent from foreign logs by investing in the establishments of large areas of plantations in the country over the past ten years, there are not enough mature forests to meet the ever-increasing need for wood in the country.

As a sign of the improved markets for forest products in 2010, global trade of softwood logs increased by approximately 20 percent last year. An estimated 81 million m3 of softwood logs were traded in the world in 2010, which can be compared to over 95 million m3 in the record year of 2007 (Graph 1). Western Europe and Asia are the regions with the greatest rise in imports, with China, South Korea, Germany and Sweden increasing imports the most. After two years of declining shipments, 2010 may very well be the turning point when global log trade will start growing again. However, the growth is not of the magnitude such that global shipments will reach the pre-financial crises levels of 2006 and 2007 anytime soon.

Russia’s role in global log trade has diminished

Russia is still the major supplier of softwood logs to the world, but its share of total trade has fallen from almost 40 percent in 2006 to less than 28 percent in the 1Q/10. This decline can be attributed to the 25 percent export tax, which the Russian government implemented in 2008. Russia exported 37 million m3 at the record year of 2006. This year, total shipments may not reach over 18 million m3.

Graphs are available in the attached file.

Contact Info:

Hakan Ekstrom, President

Wood Resources International

Seattle, USA.

hekstom@wri-ltd.com

www.woodprices.com