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Global Demand For Plantation Roundwood

Global Demand For Plantation Roundwood Set To Climb

Increases in global demand for timber will continue to outstrip increases in supplies of wood available from the world's plantation forests, according to a report just published by the Food and Agriculture Organization of the United Nations (FAO).

The report, a part of the FAO's Global Forest Products Outlook Study, was co-written by New Zealander Christopher Brown, who is currently working on forestry forecasting issues for the Ministry of Agriculture and Forestry.

Mr Brown says it's clear that the world's natural forests will be increasingly constrained in meeting demands for wood products and that countries like New Zealand, with large plantation forests, are poised to take advantage of that growing demand into the foreseeable future.

The FAO report says that overall demand for wood is expected to increase by 25 percent from 1996 levels to just under 1.9-billion cubic metres in 2010.

It is expected that the proportion of wood supplied from forest plantations to meet this demand will increase from slightly less than one-quarter of total supply at present, to around one-third of total supply in 2010.

Wood production from New Zealand's planted forests is forecast to be around 30-million cubic metres in 2010.

On a world-scale, New Zealand will continue to be a small supplier of roundwood although it will remain an important player within Asia-Pacific wood markets. New Zealand's plantation production currently contributes just over one percent of global industrial roundwood production, and just under five percent of estimated global production from forest plantations.

Looking further ahead to 2050, the report proposes three possible scenarios for global consumption and supply of industrial roundwood.

These range between 2.3 billion cubic metres and 3.1 billion cubic metres, depending on assumptions about population growth and increasing global wealth.

Plantation forests, including those in New Zealand, could supply as much as 65 percent of the world's demand for wood by 2050, if current global planting rates are maintained. However, Mr Brown suggests it is more likely that global demand will increase faster than the minimum FAO projections, and plantations will eventually supply 35-40 percent of total wood production.

A comparison between the three extrapolations of future global industrial roundwood consumption and the projected levels of potential industrial roundwood production from industrial forest plantations under each of the three scenarios about future forest plantation development.

Further implications for New Zealand

Most of New Zealand's markets are in the Asia-Pacific region and, by 2010, it is forecast that 475-million cubic metres of roundwood will be consumed in the region. It is estimated that 80-million cubic metres of industrial roundwood (log and woodchip) will be imported annually by countries in Asia-Pacific and around 30-million cubic metres of these log and woodchip imports will be supplied by countries inside the region.

Asia-Pacific, a region that includes nine out of ten of New Zealand's largest forestry export markets, is set to become a net importer of wood-based panels, rather than the current position of net exporter. It is also expected that by 2010, Asia-Pacific consumption of sawnwood will be second only to that in North America. This will offer significant export opportunities for producer countries such as New Zealand.

The Ministry of Agriculture and Forestry's recently released National and Regional Wood Supply Forecasts suggest New Zealand's sustainable wood harvest should be around 30 million cubic metres by 2010; around 35 million cubic metres by 2020; and a maximum of 60-million cubic metres by 2040, under the most optimistic (60,000 hectares/year) new planting scenario. Probably a more likely scenario would be for New Zealand to produce 40-50 million cubic metres of plantation grown wood by 2040.

Under the highest new planting assumptions New Zealand has the potential to produce 6.5 percent of the world's plantation production by 2020 and 11 percent by 2050. However, the reality is almost certain to be more modest.

Trade Implications

Within the Asia-Pacific region there are likely to be some big differences between countries, depending on economic growth, resources and population. This will have a significant effect on trade. For example, supply will increase dramatically from some countries, such as New Zealand with its forest plantations, while in others, domestic markets will grow, and as forest resources decline, or are withdrawn from production status, supply potential will shrink.

"There are likely to be opportunities for countries with significant forest plantation resources to expand market share and Australian markets and those in North Asia will remain extremely important for New Zealand," says Mr Brown.

For more information contact Christopher Brown, MAF senior policy analyst, tel.(04) 498 9827.

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