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American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
FA
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Hardwood Marketsin Europe and United States
in 2002 and 2003
By Ed PepkeProject Leader
Forest Products Marketing ProgrammeUN Economic Commission for Europe and
Food and Agricultural OrganizationGeneva, Switzerland
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Bim-vindos a Lisboa!
(Welcome to Lisbon!)
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, 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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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 Europe’s 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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Timber Committee Market Statement
General 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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Timber Committee Market Statement
General 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 wood’s market share.
• International approaches to wood promotion are importaqnt to ensure sustainable markets, a vital component of sustainable forest management.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Certified Forest
Products
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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 world’s certified forests are in
the UNECE region.• Most of the markets for CFPs are within
the region.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Hardwood lumber
(also known assawn hardwood)
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Sawn hardwood
0
5 000
10 000
15 000
20 000
25 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Hardwood lumber
0
2 000
4 000
6 000
8 000
10 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Sawn hardwood
25 000
27 000
29 000
31 000
33 000
35 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Hardwood Lumber
0
1 000
2 000
3 000
4 000
5 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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USA Hardwood Lumber Forecasts
20,000
22,000
24,000
26,000
28,000
30,000
32,000
1998 1999 2000 2001 2002 2003
1000 m
3
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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USA Hardwood Lumber Forecasts
0
500
1000
1500
2000
2500
3000
3500
1998 1999 2000 2001 2002 2003
1000 m
3
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Comparison to
other forest products markets
in 2002-2003
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Softwood lumber
50 000
60 000
70 000
80 000
90 000
100 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Softwood lumber
0
10 000
20 000
30 000
40 000
50 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Softwood lumber
80 000
90 000
100 000
110 000
120 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Softwood lumber
0
10 000
20 000
30 000
40 000
50 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Paper and paperboard
80 000
90 000
100 000
110 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
mt
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Paper and paperboard
10 000
15 000
20 000
25 000
30 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
mt
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Paper and paperboard
60 000
65 000
70 000
75 000
80 000
85 000
90 000
95 000
100 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
mt
Production Consumption
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Paper and paperboard
30 000
35 000
40 000
45 000
50 000
55 000
60 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
mt
Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: MDF
0
2 000
4 000
6 000
8 000
10 000
1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: MDF
0
1 000
2 000
3 000
4 000
1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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North America: Particleboard
0
3 000
6 000
9 000
12 000
15 000
1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Europe: Particleboard
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1000
m3
Production Imports Exports
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Promotion of
forest products
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Annual change in forest area, 1990-2000
-6
-5
-4
-3
-2
-1
0
1
2
3
Mil
lio
n H
ec
tare
s
NaturalPlantationTotal
N & CAmerica
SouthAmeric
a
Europe Asia
Africa
Oceania
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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• Growing too much wood?
• Not enough wood products demand?
• What are the solutions?
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Grow the wood markets !
• Guarantee that today’s wood products meet consumers’ needs
• Develop new products to meet evolving needs
• Develop new markets for wood products (substitute for non-renewable materials)
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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!
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.”
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.”
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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 wood’s market share.”
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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.”
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Convention
Summary
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Major themes
• Global forces on hardwood markets
– Fashion business
– Acceptance
– Viability
– Environmental issues
•Business environment
•Forest
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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 wood’s favor
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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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
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Recommendations
• Influence decision makers
• Develop image
• Influence fashion
• Repeat positive messages about
hardwoods to decision makers
• Continuous engagement in int’l
processes
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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Recommendations
• Necessity of cooperative international promotion
• Promote enhanced use of wood
• Promote alternative products and species
• Listen to European’s market needs
American Hardwood in Europe10th AHEC Convention, 24-25 October 2002, Lisbon
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La fin
