The Market Situation in Forest Products in the Year 2000

Nilsson, S. (1983). The Market Situation in Forest Products in the Year 2000. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-83-007

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Abstract

About the future trade of that scarce resource -- wood -- the same general pattern in the future is foreseen as in the past for the grades pulpwood and chips. This means that Japan and Western Europe will be the main importing regions and the major exporting regions will be the US, the USSR and Canada. For these grades the price is expected 'to rise for the period up to the year 2000. In general , the price of pulpwood is expected to rise more than the general inflation rate in low wood cost regions and at the same rate in high wood costs regions. In these low cost regions the expected increase of wood costs will be 20-35% in constant dollars.

For the grade softwood sawlogs a declining trade is foreseen for the future. More and more of this grade will be used domestically. A shift in the trade pattern is also foreseen. The shares of the US will decline and the shares of the USSR and New Zealand will expand. Also for the grade softwood sawlogs there is an expectation that prices will rise more than the general inflation in low wood cost regions and at the same rate in high wood cost regions.

For the grade hardwood sawlogs dramatic structural changes are foreseen both in production and trade. The major supply regions in the past will stabilize at current cutting levels or at a lower level in the future. Another structural change will be the future trade policies of the main supplying regions. In the future hardwood sawlogs will increasingly be used in the domestic production of hardwood lumber. One result of these conditions will be that the international trade in hardwood sawlogs will decline. The situation that hardwood sawlogs represent a scarce resource will push the price upwards dramatically.

Major shifts in the trade pattern for the grade softwood lumber are not foreseen in the future. Western Europe will remain the world's largest importer of softwood lumber. The main supplying region for this area will be Scandinavia. In the future major supplying regions on the world market will also be Canada and Scandinavia. The general conclusion about softwood lumber prices is that prices will rise approximately to reach the level of inflation.

For the grade hardwood lumber a decline in consumption is foreseen in the developed countries. On the other hand the consumption in Asia will grow rapidly. South and East Asia are expected to remain the major hardwood lumber exporting regions in the future. These conditions lead to upward pressures on hardwood lumber prices in Asia and a slow growth of prices in developed countries.

Demand for the grade softwood plywood will stabilize in the future which will lead to significant structural changes in the entire world. On the other hand, the demand of hardwood plywood will increase in Asia but will, as for softwood plywood, decrease in developed countries. The real price of hardwood plywood is projected to increase.

A substantial growth in production of white chemical pulp is needed in the future to provide the world's paper producers. Canada will be the main supplying region of high pulp quality. Scandinavia will continue to expand the value-added exports of finished products at the expense of a reduction in pulp exports. Canada is in a position to remain the price leader for white chemical pulp. In general there will be strong, upward pressures on pulp prices in the future.

For the grade paper and board in general a slow or even negative growth is foreseen for the grades newsprint, sack, wrapping papers, carton boards and other kraft papers. The most rapid growth in consumption is foreseen for printing and writing and packaging grades. The greatest potentials for investments in production of paper and board is in North America.

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