Hardwood Markets in Europe and United States in 2002 and 2003 By Ed Pepke Project Leader Forest Prod

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Hardwood Marketsin Europe and United Statesin
2002 and 2003By Ed PepkeProject LeaderForest
Products Marketing ProgrammeUN Economic
Commission for Europe andFood and Agricultural
OrganizationGeneva, Switzerland
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Bim-vindos a Lisboa!(Welcome to Lisbon!)
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Program

• Hardwood markets US and Europe
• Promotion and issues
• Panel discussion on above
• Hardwood consumption realities
• Panel discussion
• Dimension and component opportunities
• Breakout sessions by country groupings
• Country reports in plenary

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Announcements

• Turn off mobile telephones, please
• Governed by US anti-trust laws
• Speakers requested to respect timing
• Audience requested to respect timing too
• Hold questions for panel discussions

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Content of presentation

• Overall market developments, 2002 2003
• Overall
• Hardwoods
• Certified forest products
• Other forest products markets
• Hardwood production, consumption and trade
• Promotion necessities

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Sources of info

• UNECE/FAO TIMBER database (forest products
  statistics)
• FAOSTAT Forestry Database website
• UNECE/FAO Timber Bulletin, Forest Products
  Annual Market Review, 2001-2002
• Timber Committee market forecasts and statement,
  2002-2003

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Overall market conditions, highlights of Forest
Products Annual Market Review, 2001-2002

• Viable forest products markets, supported by
  policy reforms, underpin sustainable development
  in some central and eastern European countries
  (CEECs).
• Following 10 years of growth, consumption of
  primary-processed forest products in the UNECE
  region declined sharply in 2001.
• Consumption of wood products in the CIS, notably
  Russia, gained 7 in 2001.

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Overall market conditions, highlights of Forest
Products Annual Market Review, 2001-2002

• North American markets were buoyed up by
  extraordinary strength of US housing-related
  demand for wood products.
• Market effects from Europes 1999 windstorms
  still affected markets.
• Strong US influenced 2001 markets, and weakened
  in 2002 is changing competitive positions and
  trade.
• Structural change in US and western European
  furniture manufacturing.

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Overall market conditions, highlights of Forest
Products Annual Market Review, 2001-2002

• Certified forest product markets growing, but
  remain small compared to surge in certified
  forest area.
• Panel markets expanded in 2001, achieving new
  records for OSB and MDF.
• Cross sectoral policy issues directly influence
  forest products sector.

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Timber Committee Market StatementGeneral
Forecasts for 2002-2003

• Following record levels in 2000, a downturn in
  forest products markets occurred in the UNECE
  region in 2001.
• Weak economic conditions in North America and
  Europe persist in 2002.
• Central and eastern European and CIS (ex-USSR)
  forecast rising consumption, production and
  trade.
• Slight improvement forecast for 2003.

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Timber Committee Market StatementGeneral
Forecasts for 2002-2003

• Encouraged countries to work together to achieve
  maximum benefits from promotional efforts.
• Promoting sound use of wood is important to
  maintain and increase woods market share.
• International approaches to wood promotion are
  importaqnt to ensure sustainable markets, a vital
  component of sustainable forest management.

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Certified Forest Products
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Timber Committee Certified Forest Products
Forecasts for 2002-2003

• Certified forestland increased by 25 in UNECE
  region in 2002.
• 90 of worlds certified forests are in the UNECE
  region.
• Most of the markets for CFPs are within the
  region.

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Timber Committee Certified Forest Products
Forecasts for 2002-2003

• Current problems include weak market demand, lack
  of mutual recognition, lack of chain of custody.
• Many products from certified forests are being
  sold without labels.

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Timber Committee Hardwood Lumber Forecasts for
2002-2003

• US exports forecast to leap 22 in 2002.
• US exports to reach record 3.2 million m3.
• Largest export market for US is now China.
• Some US exports reimported in furniture.
• More optimism in central and eastern (CEECs) than
  western Europe.
• Value-added exports increasing for CEECs and
  tropical countries.

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Hardwood lumber(also known assawn hardwood)
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Hardwood highlights of Forest Products Annual
Market Review, 2001-2002

• Total sawn hardwood production in the UNECE
  region declined in 2001.
• Sawnwood production increased significantly in
  central and eastern European countries.
• Production remained constant in western Europe.
• Drop in western European production attributed to
  1999 windstorms oversupply.

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Highlights of Forest Products Annual Market
Review 2001-2002

• Exports for the UNECE region were down by 5.
• UNECE region imports of sawn hardwood in 2001
  were down by 6.
• Apparent consumption in the UNECE region fell
  from its 2000 peak.
• Central and eastern European countries
  consumption of sawn hardwood is increasing.

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Highlights of Forest Products Annual Market Review

• Events of 11 September 2001 accentuate reduced
  demand.
• Rapid development of Asian furniture industries
  affecting hardwood trade and furniture production
  in UNECE region.
• Markets affected by currency exchange rates.
• Environmental issues, certification, legality,
  getting press.

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Europe Sawn hardwood
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Europe Hardwood lumber
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North America Sawn hardwood
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North America Hardwood Lumber
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USA Hardwood Lumber Forecasts
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USA Hardwood Lumber Forecasts
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Comparison toother forest products marketsin
2002-2003
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Europe Softwood lumber
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Europe Softwood lumber
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North America Softwood lumber
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North America Softwood lumber
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North America Paper and paperboard
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North America Paper and paperboard
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Europe Paper and paperboard
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Europe Paper and paperboard
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Europe MDF
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North America MDF
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North America Particleboard
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Europe Particleboard
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Promotion offorest products
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Annual change in forest area, 1990-2000
Africa
Europe
N C America
Oceania
Asia
South America
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Forest resources summary

• Removals considerably below growth in UNECE
  region.
• Wide variance in utilisation rates of NAI.
• Growing stock increasing in Europe.
• Oversupply compared to demand for wood.
• Increasing alternative demands on forests.

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• Growing too much wood?
• Not enough wood products demand?
• What are the solutions?

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Grow the wood markets !

• Guarantee that todays wood products meet
  consumers needs
• Develop new products to meet evolving needs
• Develop new markets for wood products (substitute
  for non-renewable materials)

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How can we grow the wood markets?

• Through coordinated, international promotion
  programs
• Example the FAO-ECE Forest Communicators Network
  creates a positive image of the forest and forest
  industries sector by
• networking among members
• identifying key common messages and concepts
• building of PR capacity

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Findings on the market effects of wood promotion
from Forest Products Annual Market Review

• Attitudes influenced by cultural and technical
  dimensions
• Credibility is important quality
• Key elements of promotional work
• Competence
• Neutrality
• Sufficient financial resources

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Findings on the market effects of wood promotion
from Forest Products Annual Market Review

• Fund raising a problem in fragmented industry
• Multi-country promotions must overcome cultural
  differences
• Wood promotion is a success story!

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2001 Timber Committee Market Statement

• In light of the economic downturn in 2001, the
  Timber Committee stated that it is imperative to
  develop new products to expand existing markets
  and to establish new markets to meet consumers
  needs.
• The Committee reasserted the importance for the
  forest products industry to work internationally
  to promote the environmental advantages of the
  sustainable production of wood.

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2001 Timber Committee Market Statement

• The Committee discussed the need to increase the
  wood culture in the UNECE region.
• Delegates mentioned on-going national and
  subregional campaigns to promote the use of wood.
• The Committee suggested coordinating efforts in
  order to achieve greater success.

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2002 Timber Committee Market Statement

• Encouraged countries to work together to achieve
  the maximum benefits of their promotional
  efforts.
• Multi-country promotion of the sound use of wood
  is important to maintain and increase woods
  market share.

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2002 Timber Committee Market Statement

• Many effective communication strategies can be
  shared through collaboration between countries,
  trade associations and promotional groups.
• These international approaches to wood promotion
  are important to ensure sustainable markets which
  are a vital component of sustainable forest
  management.

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ConventionSummary
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Major themes

• Portugal nation of vision
• US hardwood manufacturing restructuring
• Changing export markets
• Evolution in domestic market
• Costs rising faster than prices
• 1.8 million homes using more hardwoods

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Major themes

• Global forces on hardwood markets
• Fashion business
• Acceptance
• Viability
• Environmental issues
• Business environment
• Forest

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Major themes

• Increasing value-added production
• Shifting markets
• Domestic consumption increasing in developing
  countries
• Illegal logging to affect hardwood trade
• Political issues working in woods favor

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Major themes

• Economic development important in environment
  development
• Enhanced use of wood
• Challenges opportunities for dimension
• Shifting production for cost savings

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Recommendations

• Influence decision makers
• Develop image
• Influence fashion
• Repeat positive messages about hardwoods to
  decision makers
• Continuous engagement in intl processes

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Recommendations

• Necessity of cooperative international promotion
• Promote enhanced use of wood
• Promote alternative products and species
• Listen to Europeans market needs

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La fin