AUS: Widening Trade Deficit Highlights Challenge

23 September 1999

Widening Trade Deficit Highlights Challenge For Australia's Forest Industries

Another increase in the trade deficit for wood and paper products highlights the need for Australia to step up its efforts to market our unique timbers, the Minister for Forestry and Conservation, Wilson Tuckey, today.

Mr Tuckey said preliminary trade statistics released by the Australian Bureau of Statistics indicated that the trade deficit for wood and paper products widened from $1.745 billion in 1997-98 to $1.963 billion in 1998-99.

"Australia's imports of forest products rose by a further 6 per cent to $3.26 billion in 1998-99, the second year in a row of imports have risen," Mr Tuckey said.

"This worrying trend can only be overcome when value-added timber products, including high-quality paper can be produced in Australia. This will only happen when investors, who in many cases need to have hundreds of millions of dollars through to the billions of dollars to get started, have the confidence that the RFA process will deliver a guaranteed wood supply and security to back the investment.

My Forestry Action Agenda process will build on the RFA agreements and legislation to provide the security for companies to invest in value adding timber processes," said Mr Tuckey.

A major factor in the rise was a jump in pulp imports, following reduced pulp production in Tasmania and increased use of imported pulp for paper production in Victoria. Pulp imports rose by $67 million to $193 million, and the volume of imports rose by 72 per cent to 310,000 tonnes.

Imports of paper and paperboard rose by 3.5 per cent ($59 million) to a record $1.76 billion, mostly as a result of an increase in the unit value of paper and paperboard imports. In contrast, the total volume of imports of paper and paperboard fell 3 per cent to 1.3 million tonnes.

After three years of strong growth, the value of exports of forest products from Australia fell by 2 per cent to $1.30 billion in 1998-99.

"The good news, is that these falls were partly offset by increased exports to several Asian countries of other forest products such as sawn wood, round wood, wood based panels and wastepaper.

"These increased strongly to levels above export volumes prior to the downturn in these markets in the first half of 1998. However, while export volumes were up, prices were well down across these products," Mr Tuckey said.

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