Malaysian Timber Conference, Kuala Lumpur, 18 October 2018

Transcription

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2 Global timber trade overview: Focusing on tropical timber Dr. Ed Pepke Senior Market and Policy Analyst Dovetail Partners Inc. and European Forest Institute EU FLEGT Facility

3 Contents Global trade, production, consumption Primary-processed products Value-added products Tropical & temperate comparison Tropical timber focus Global Malaysia Forest resources: supply & demand Market trends Changing tropical timber demand and trade Risks and uncertainties Emerging market trends Long-term trends and future markets Market and political forces impacting trade Conclusions The way forward

4 Global trade, production, consumption

5 Million m3 RWE Global trade of wood and paper products Notes: Sawnwood, panels and paper products converted to roundwood equivalents. Using imports: globally imports = exports. Source: FAO ForesStat, September, 2018.

6 Million m3 RWE Global trade of wood and paper products past 20 years Notes: Sawnwood, panels and paper products converted to roundwood equivalents. Using imports: globally imports = exports. Source: FAO ForesStat, 2018.

7 Million m3 RWE Global production (=consumption) of wood and paper products Notes: Sawnwood, panels and paper products converted to roundwood equivalents. Using imports: globally imports = exports. Source: FAO ForesStat, 2018.

8 Billion m Global production=consumption wood fuel vs. industrial roundwood Before 2017 most roundwood was used for fuel, and mostly inefficiently burned. In 2017 industrial roundwood consumed almost as much as fuel wood. What will happen with increased wood energy use? Wood fuel Industrial roundwood Source: FAO ForesStat, 2018.

9 Million m3 Tropical and temperate shares of global imports (based on volume) % tropical In % tropical In Temperate Tropical Note: 4 primary products only. Not comparable to FAO s product mix. Source: ITTO, 2017.

10 US$ billion Tropical and temperate shares of global imports (based on value) % tropical In 2007 Tropical timber s market share greater based on value because tropical timber s greater unit value. 30% tropical In Tropical Temperate Note: 4 primary products only. Source: ITTO, 2017.

11 Tropical vs. temperate primary- and secondary-processed timber trade, 2016 $16 $18 $105 $68 Tropical primary Tropical secondary Temperate primary Temperate secondary Note: Trade values in US$ billion. Excludes paper and pulp trade. Source: Personal communication with ITTO, 2017

12 Tropical timber

13 USD billion Global tropical timber trade (in value) Industrial roundwood Sawnwood Veneer Plywood Note: Only industrial roundwood, sawnwood, plywood and veneer. Source: ITTO, 2018.

14 USD million Top-15 tropical wood and paper exporters, 2016 with China 60,000 50,000 40,000 30,000 20,000 10,000 0 Source: UN Comtrade, 2018.

15 USD million Top-15 tropical wood and paper exporters, 2016 without China Source: UN Comtrade, 2018.

16 USD million Top-15 tropical countries value-added wood exports, , ,000 3,500 3,000 2,500 2, , , Notes: Wood exports includes secondary-processed products in HS44 such as Builders joinery and construction plus all HS94 wooden furniture. Source: UN Comtrade, 2018.

17 USD billion Top-15 tropical countries value-added wood exports, Notes: Wood exports includes secondary-processed products in HS44 such as Builders joinery and construction plus all HS94 wooden furniture provisional and could be revised upward. Source: UN Comtrade, 2018.

18 Global forest resources

19 The world s forests

20 Global forest area, million hectares Africa Asia Europe, including Russia North & Central America South America Oceania 1015 Source: FAO, 2018.

21 Million hectares 1200 Global forest resources Africa Asia Europe North & central America South America Oceania Other forest Production forest Source: FAO, 2018.

22 Percent industrial roundwood harvested 2017 (remainder was harvested for wood energy) North America Oceania Europe, with Russia South America Asia Central America Africa 79 Source: FAO, 2018.

23 Million hectares Forest area change, 1990 to Africa Asia Europe N. and C. America Oceania S. America World Source: FAO, 2018.

24 Annual change in forest area by country,

25 Annual change in forest area,

26 Causes of deforestation (not in order) Conversion to crop land increasing population Conversion to pasture land changing diets Illegal logging Conversion to urban land Planting Afforestation (not in order) Conversion from abandoned agricultural land

27 Market trends

28 Billion US$ EU imports of wood and paper from world to be updated with Comext Note: Wood and paper products include all wood and wood products, pulp, paper and paper products and wooden furniture. Source: UN Comtrade, 2017.

29 Million m3 EU primary-processed tropical timber imports Note: Only industrial roundwood, sawnwood, plywood and veneer. Source: ITTO, ATIBT Forum, Dubai, 6 March 2017

30 Million m3 EU primary-processed tropical timber imports Industrial roundwood Sawnwood Veneer Plywood Source: ITTO, 2018.

31 Billion euros EU imports of wood and paper products from 15 Voluntary Partnership Agreement countries Cameroon CAR Congo Côte d'ivoire DR Congo Gabon Ghana Guyana Honduras Indonesia Laos Liberia Malaysia Thailand Vietnam Source: Eurostat Comext, 2018.

32 USD billion China s trade of wood and paper products Imports Exports Source: UN Comtrade, 2018.

33 USD billion United States trade of wood and paper products Imports Exports Source: UN Comtrade, 2018.

34 USD billion Malaysia s trade of wood and paper products Imports Exports Source: UN Comtrade, 2018.

35 Market and political forces impacting trade

36 Responsible sourcing of wood and paper products (1 of 2) Objectives: increase accountability in marketplace, reduce illegality, unsustainability Third-party certification systems Malaysian Timber Certification Scheme & PEFC FSC Originally aimed at tropical timber, but mainly temperate timber certified

37 Certified forest area by region Africa, 2% Latin America, 3% Asia, 4% Oceania, 6% North America, 49% CIS (mainly Russia), 14% Europe, 22% Source: UNECE/FAO, 2017

38 Responsible sourcing of wood and paper products (2 of 2) Government policy initiatives FLEGT Action Plan 2003 Forest Law Enforcement Governance and Trade EU Timber Regulation 2013 FLEGT-licensed timber 2016 United States Lacey Act Amendment 2008 Others too but not enough

39 Tariff wars 2018 Ignited by United States steel and aluminum tariffs Responded by trading partners tariffs on other products Escalated by increased US tariffs on other products August, China placed tariffs up to 25% on 3500 US products, including 190 wood and paper products US vowed to place additional tariffs on China US-Canada softwood lumber trade dispute US imposed 26.75% duties on Canadian sawn softwood Higher sawnwood and home costs Loss of revenue for US government estimated US$482 million/year

40 Conclusions

41 Conclusions A summary of the presentation. Focus on key messages. To be finalized

42 Conclusions Consumption and trade at record levels Tropical trade recovered, but steady for last 3 years Globally forest harvests below growth, but deforestation exists EU imports of tropical timber decreasing, but increasing from VPA countries Responsible sourcing important: sustainable and legal

43 The way forward

44 The way forward to expand market share Promote attributes of tropical timber Beauty, workability, familiarity, availability Counter deforestation argument, especially in Asia Counter other ecological, and social and economic concerns Work together with governments Work together with NGOs Emphasize sustainability and legality Focus on key target markets Work together with trade associations Aim at decision makers, e.g. architects Export value-added products

45 Discussion Dr. Ed Pepke Senior Market and Policy Analyst Dovetail Partners Inc. and EU FLEGT Facility European Forest Institute