This section of the report presents a brief description of the main global supply and demand developments which are expected to occur over the period to 2010.7 The first four subsections discuss the outlook for industrial wood products and the fifth discusses the wood fuel outlook. Expected wood production and biological productivity are then compared in part six of this section, which is followed by a final synopsis of the main expected market developments.
The current and future expected level of global supply and demand for wood and wood products is shown in Figure 2. Developed countries8 currently account for about 1 bn m3 EQ9 of annual wood and wood product consumption or two-thirds of the global total of 1.5 bn m3 EQ/year. Their share of global industrial roundwood production is slightly lower, such that about 6% (or around 0.07 billion m3 EQ/year) of their wood and wood product requirements have to be imported from less developed countries each year. About half of this net trade from developing to developed countries is in the form of wood products and the remainder is accounted for by trade in industrial roundwood.
Figure 2: Industrial roundwood supply and forest product demand - 1996 and 2010
Global demand for industrial wood and wood products is expected to increase by 25% to 1.9 bn m3 EQ/year by 2010. By far the greatest increase in demand is expected to occur in less developed countries, where demand is expected to rise by about 40% to 0.7 bn m3 EQ. In contrast, demand in developed countries is expected to increase by only about 20%. This will increase the developing countries share of global industrial wood and wood product consumption from about one-third to just under 40%.
Net trade from developing to developed countries is expected to increase very slightly to around 0.1 bn m3 EQ. However, with greater market opportunities at home, some developing countries with currently high exports may reduce their levels of exports in the future.
Greater regional detail about wood production and wood products consumption in 1996 and a forecast for 2010 are shown in Figure 3. Reflecting their shares of world GDP, consumption of wood products is dominated by OECD countries. Non-OECD countries in Asia and Oceania also account for a major share of world production and consumption. In contrast, Africa and Non-OECD countries in Europe and South and Central America together account for less than 10% of global wood product consumption.10
Figure 3: Global industrial roundwood production and forest product consumption in 1996 and the forecast for 2010
Notwithstanding the present economic difficulties in Asia, continued increases in wealth in this most populous region are expected to result in the Asia and Oceania region (including developed and developing countries) maintaining its position as the region with the greatest share of global consumption and future demand growth.
North America and Asia each account for about one-third of current global forest products consumption. The two OECD members in Asia (Japan and Republic of Korea) account for one-third of Asia's share of consumption, China accounts for just under one-third and the other non-OECD countries in the region account for the remainder
Europe follows closely, accounting for about one-quarter of global consumption. Of this, three-quarters is consumed in European OECD countries. South America, Africa and Oceania are currently relatively insignificant consumer regions, although South America does consume slightly more wood products than non-OECD countries in Europe.
In terms of industrial roundwood production in each of the regions, the pattern is slightly different. North America supplies about 40% of the global market and Europe again accounts for about 25%. Asia provides about half of the remaining production, or about 18% of the global total and the other regions account for the remainder.
In terms of net trade, the picture is more complicated. At the regional level, the developed countries of Europe and the Asia region consume more than they produce. However, the two developed economies in Oceania (Australia and New Zealand) are both large net exporters. North America is also a large net exporter of wood and wood products. Of the developing regions, Asia is the only region which consumes more than it produces. Africa and developing countries in Oceania export more than half of their production (as both processed products and roundwood) and around one-third of production in non-OECD European and South and Central American countries is currently exported.
Given that the net imports into European OECD countries is almost exactly balanced by net exports from the non-OECD countries in Europe, Asia is the only region which is a major net importer of wood and wood products. The countries of Asia consume a volume of products equal to about 100 million m3 of industrial roundwood more than they produce each year (or they import roughly 20% of their wood and wood product requirements). Asia imports a wide range of forest products each year, from raw logs and pulp through to sawnwood, panels and paper. To a large extent Japan is the major driving force behind this phenomenon, but other large economies in the region (such as China, Republic of Korea and Thailand) are also becoming significant net importers.
During the period 1996 to 2010, annual global industrial forest product production and consumption is projected to increase at a rate of about 1.7% per year, giving a total increase of 26% over the whole period. However, the expected level of consumption in 2010 (1.9 billion m3 EQ/year) will only be about 10% higher than the peak in consumption (of 1.7 billion m3 EQ/year) experienced around 1990.11
The low overall rate of growth in production and consumption expected in OECD countries is largely due to expected low growth in North America (see Table 6). Growth in European OECD countries is expected to match the global rate of growth and growth in the OECD Asia and Oceania region is expected to exceed it.
The highest rates of growth in production and consumption in non-OECD countries is expected in Europe, followed by Asia and Oceania. Growth in production and consumption in Africa will be slightly less than the global average, and growth in South and Central America will be lowest of all.
Table 6: Expected growth in production and consumption over the period 1995 to 2010
Region |
Expected total growth in production 1995 - 2010 |
Expected total growth in consumption 1995 - 2010 |
Countries within OECD |
||
Europe |
27% |
23% |
Asia and Oceania |
34% |
22% |
The Americas |
10% |
8% |
Subtotal |
17% |
15% |
Non-OECD countries |
||
Europe |
55% |
100% |
Asia and Oceania |
52% |
57% |
The Americas |
17% |
9% |
Africa |
23% |
18% |
Subtotal |
41% |
47% |
World total |
26% |
26% |
The relative shares of global consumption and production held by each of the world regions is not expected to change much by 2010. The only slight change is that Asia and Europe are expected to increase their shares of global consumption and production by 2-3%, largely at the expense of North America. Asia is projected to have the highest rate of growth of industrial roundwood production at 3.0% per annum. Consumption in Asia is projected to grow at only 2.1%, but the region overall is expected to remain the world's main net importing region, and will still have to import a volume of forest products equal to roughly 20% of its consumption requirements each year by 2010.
From the point of view of examining forest resources as a base for industrial development, it is also useful to compare the production of industrial roundwood with the production of processed products and this is shown in Table 7. This table compares industrial roundwood and processed forest product production12 between the various developed and developing regions in 1996 and the projection for 2010.
Table 7: Industrial roundwood and forest product production by region in 1996 and 2010
Region |
Industrial roundwood and product production in 1996 (million m3 EQ) |
Industrial roundwood and product production in 2010 (million m3 EQ) | ||||
IRW |
Products |
Export/import level |
IRW |
Products |
Export/import level | |
Countries within OECD |
||||||
Europe |
256 |
276 |
-7% |
327 |
361 |
-9% |
Asia and Oceania |
72 |
116 |
-38% |
97 |
156 |
-38% |
The Americas |
596 |
580 |
+3% |
653 |
634 |
+3% |
Subtotal |
924 |
972 |
-5% |
1,077 |
1,151 |
-6% |
Non-OECD countries |
||||||
Europe |
113 |
91 |
+24% |
175 |
148 |
+18% |
Asia and Oceania |
249 |
241 |
+3% |
378 |
362 |
+4% |
The Americas |
135 |
124 |
+9% |
157 |
136 |
+15% |
Africa |
68 |
61 |
+11% |
84 |
74 |
+14% |
Subtotal |
565 |
517 |
+9% |
795 |
721 |
+10% |
World total |
1,490 |
1,490 |
1,872 |
1,872 |
||
Notes: For the purposes of this comparison, product production has been defined as the production of sawnwood, wood-based panels and wood pulp. Negative percentages indicate the proportion of wood products manufactured from imported industrial roundwood and positive percentages indicate the proportion of industrial roundwood production which is exported.
The table shows that wood product production is currently higher than industrial roundwood production in all of the OECD countries together (i.e. the OECD countries are net importers of industrial roundwood). Within the three OECD regions, the exception is the North America region which is a net exporter of industrial roundwood (Australia and New Zealand are also major net exporters). In contrast, all of the non-OECD regions are net exporters of industrial roundwood. For example, non-OECD Europe exports one-quarter of its industrial roundwood production in the form of unprocessed wood.
The discrepancy between industrial roundwood and processed product production is currently highest in Asia and Oceania (developed and developing countries), where 321 million m3 of industrial roundwood is currently produced, but the region produces processed products equal to a volume of about 357 million m3. Thus, through industrial roundwood trade (net imports of 36 million m3 per year), Asia produces a proportionately greater share of its processed forest product consumption requirements than the industrial roundwood production figures given above would suggest. If processing of imported pulp and wastepaper were taken into account, Asia and Oceania would be shown to have an even greater share of global processing capacity. Asia and Oceania is the world's major net industrial roundwood importing region and this situation (net industrial roundwood imports into Asia and Oceania supporting the wood processing sector there) is also expected to continue in the future at roughly the same level.
With the exception of OECD countries in Europe, the other regions all produce more industrial roundwood than processed products and, hence, supply Asia and Oceania with its industrial roundwood imports. The only main change expected in the future is that the sources of industrial roundwood imports for Asia and Oceania may diversify away from North America to include greater shares from other countries (e.g. the Russian Federation and countries in South America).
Current and projected estimates of global forest product production and consumption by product category are shown in Table 8. As in the past, consumption of paper and paperboard is expected to have the most rapid growth of all the product sectors, at an annual rate of 2.4%. In contrast, consumption of pulp for paper is projected to grow by only 1.1% per year, reflecting the increased use of recovered paper in the total fibre furnish which, it is expected, will take place in the future.
Moderate growth in solid wood product consumption is expected, at rates of 1.1% per annum in the case of sawnwood and 1.3% per annum in the case of wood-based panels. Most growth in wood-based panels production and consumption is expected in the reconstituted wood panels sector rather than the plywood sector.
Table 8: Production and consumption by product category in 1995 and 2010
Product category |
Production/consumption |
Total growth |
Annual growth | |
in 1996 |
in 2010 |
1996 - 2010 |
1996 - 2010 | |
Industrial roundwood |
1,490 |
1,872 |
26% |
1.7% |
Sawnwood |
430 |
501 |
17% |
1.1% |
Wood-based panels |
149 |
180 |
20% |
1.3% |
Pulp |
179 |
208 |
16% |
1.1% |
Paper and paperboard |
284 |
394 |
39% |
2.4% |
Note: all volume figures for roundwood, sawnwood and wood-based panels are in million m3, figures for pulp and paper are in million MT.
A major significance of the difference in growth rates between the different product categories shown above is that these changes in consumption patterns will affect the types of raw material inputs which can be processed in the future. The highest rates of growth will be for products which can be produced from smaller sizes of wood and alternative fibre sources (i.e. paper and reconstituted panels). In contrast, consumption of products which require large logs as raw material inputs (i.e. sawnwood and plywood) will grow only slowly. Thus, changing future demand patterns will increase the scope for input substitution away from large logs, which have traditionally come from the natural forest or long rotation plantations, to other fibre inputs, which can come from a wide variety of sources. This is a major structural change which is expected to continue to take place in the future and, as will be shown later, could have profound implications for the relative importance of different sources of wood and fibre supply in the future.
Given that the geographical distribution of industrial roundwood production and processing capacity is quite different to the distribution of forest product demand, international trade accounts for a relatively large share of forest product production. Table 9 shows the share of forest product production that was internationally traded in 1995 by region and product category.
In line with most countries desires to add-value to domestic resources, the proportion of industrial roundwood and pulp production that is traded is generally lower than the proportion of the other forest products that are traded.13 However, this is less so in Africa, Asia and South America. Thus, for example, pulp exports account for a major share of pulp production in Africa and Latin America & the Caribbean and industrial roundwood exports are relatively important in Africa and Asia. In contrast, North America exports a major share of its sawnwood production and Europe is a major trader of all products.
Table 9: Forest products trade as a proportion of production in 1995
Region |
Industrial roundwood |
sawnwood |
wood-based panels |
pulp |
paper | ||||||||||
million m3 |
% |
million m3 |
% |
million m3 |
% |
million mt |
% |
million mt |
% | ||||||
Prod |
Exp |
Prod |
Exp |
Prod |
Exp |
Prod |
Exp |
Prod |
Exp |
||||||
Africa |
67 |
7 |
10 |
9 |
1 |
15 |
2 |
0 |
21 |
2 |
1 |
27 |
3 |
1 |
20 |
Asia and Oceania |
309 |
34 |
11 |
103 |
8 |
8 |
46 |
16 |
35 |
44 |
1 |
3 |
81 |
7 |
8 |
Latin America & the Caribbean |
141 |
13 |
9 |
33 |
4 |
12 |
7 |
2 |
33 |
10 |
4 |
38 |
12 |
2 |
14 |
North America |
592 |
24 |
4 |
166 |
55 |
33 |
47 |
9 |
19 |
85 |
17 |
20 |
104 |
22 |
21 |
Europe |
401 |
55 |
14 |
116 |
42 |
36 |
45 |
15 |
33 |
42 |
9 |
21 |
82 |
44 |
53 |
World |
1,510 |
131 |
9 |
427 |
111 |
26 |
146 |
42 |
29 |
183 |
32 |
17 |
282 |
75 |
27 |
Source: FAO (1999b)
Earlier sections have already alluded to the major wood product trade flow into Asia from the other world regions. A fuller picture of global forest products trade flows is given in Table 10. As the table shows, Europe accounts for nearly one-half of total world forest products trade (by value). North America accounts for about one-third of world exports and Asia accounts for about one-third of world imports.
However, much of the trade in forest products at this scale is within regions. For example, 80% of Europe's trade is between European countries, 85% of exports from countries in Asia are to countries in the same region and 80% of North American imports come from within the region. The only major (over US$ 5 billion) inter-regional trade flows are from North America to Europe and from North America and Europe to Asia and Oceania.
Table 10: Direction of global trade in forest products in 1995 (value in US$ billions)
From | |||||||
To |
Africa |
Asia and Oceania |
Latin America & Caribbean |
North America |
Europe |
World total | |
Africa |
0.3 |
0.2 |
0.1 |
0.5 |
2.0 |
3.1 |
2% |
Asia and Oceania |
1.2 |
17.9 |
1.7 |
15.3 |
6.4 |
42.6 |
30% |
Latin America & the Caribbean |
0.1 |
0.0 |
1.2 |
4.1 |
0.7 |
6.1 |
4% |
North America |
0.1 |
1.0 |
1.7 |
20.4 |
1.6 |
24.9 |
18% |
Europe |
2.1 |
1.4 |
2.3 |
8.5 |
49.4 |
63.8 |
45% |
World total |
3.9 |
20.7 |
6.9 |
48.8 |
62.1 |
142.4 |
|
3% |
16% |
5% |
34% |
43% |
|||
Source: estimated from UN COMTRADE database by FAO
Since the 1950's, trade in forest products has steadily increased as a proportion of total production. In the future however, growth in trade in forest products may lag behind growth in production and consumption. This may occur for two reasons. Firstly, because countries will continue to develop value-added industries in their own countries (e.g. to process rather than export roundwood and pulp), which will reduce exports of semi-processed products.14 Secondly, because it is expected that several currently large exporters in less developed countries, particularly in Asia, will develop significant domestic markets of their own due to strong economic growth export (see Box 2 for a slightly different view of the future in Asia).
Box 2: The impact of the recent economic downturn in Asia on the supply and demand projections to 2010
The model used to produce the supply and demand forecasts contained here was also used to estimate the potential impact of the recent economic downturn in Asia on global markets. It was not the purpose of this exercise to estimate the immediate effects of the crisis, but the long-term impact on the outlook to 2010. Based on projections of reduced economic growth in Asia available in April 1998, the results of this analysis are briefly summarised below.
With significantly reduced economic growth in: Republic of Korea; Indonesia; Thailand and Malaysia, plus knock-on effects in some other countries in the region, overall consumption of wood products is expected to follow a slower growth trajectory. This will result in estimates of consumption which are roughly 4-5% lower than the baseline projection for the year 2010 across all wood product categories. Because of the effects of competitive devaluation and the fact that the region is such a large importer, it is projected that most of this reduction in consumption growth will be reflected in lower imports to the region. However, some countries in the region that have been less badly affected by the crisis (e.g. Australia and Japan) may increase forest product imports if prices in the region generally fall. Production in major exporter countries is expected to remain on a similar trajectory to the baseline projection due to the effect of these devaluations.
In summary therefore, the impact of the crisis is likely to result in only slightly less consumption in the long-term. The crisis is not projected to have a major impact on suppliers in the region, but is expected to result in lower imports to the region from countries outside.
Source: FAO (1998)
If the above developments do occur, they will put pressure on importing countries, particularly those (predominantly in Asia), which have built large forest product processing industries that rely on imports of raw materials (i.e. industrial roundwood) and partly processed forest products (such as pulp and rough sawn timber). This will have implications for the future location of processing facilities in these countries and may require that they restructure some of their domestic processing industries.
Projecting wood fuel supply and demand is a difficult task because statistics about this forest product are currently only partial and quite unreliable. However, as part of this study, FAO has conducted a literature search to collect and enhance its existing databases on wood fuel use. This has included collecting new information about wood fuel consumption and revising FAO's models of wood fuel demand.15 More importantly however, it has also involved collecting better information about the utilisation of various sources of supply.
Figure 4: Wood fuel consumption in 1996 and projection for 2010
Current and projected wood fuel consumption is shown in Figure 4. World wood fuel consumption currently stands at around 1.8 billion m3, or roughly 20% higher than industrial roundwood consumption. This is projected to increase by 1.5% per annum (or just under 25% in total) over the period to 2010, at which point consumption will amount to around 2.2 billion m3. (More detailed projections are given in Annex 1).
In line with the size of its population, Asia accounts for around half of world wood fuel consumption and consumption in Asia is projected to increase by over 2% per annum (or over one third in total) over the period. In contrast, consumption in Europe is expected to almost halve over the same period. The differences between the projections of consumption growth in Asia and Europe show how sensitive consumption growth is to income. As countries in Asia become richer, they may, at first, be expected to consume more fuel generally, as incomes rise. As part of this, wood fuel consumption would be expected to increase and the supply of wood fuel may also become more formalised (i.e. from collection for own use towards commercial collection for resale) as consumers can afford to buy wood fuel rather than have to collect it themselves. However, as income continue to rise, consumers will tend to switch to other types of fuel (usually charcoal first, then kerosene, followed by LPG and electricity), which are cleaner, easier to use and quicker to heat or cook.
A range of other supply-side factors will also affect fuel-switching (from wood to other types of fuel) and it is uncertain at what level of income fuel-switching will start to occur. Thus, for example, increased incomes in Asia, combined with future investment in rural energy supply infrastructure may result in less consumption growth than is shown here.
A key question which is often asked is: what sources of wood are used for wood fuel supply and what role does wood fuel collection play in deforestation? Research by FAO indicates that a wide range of forest and other land types are used for wood fuel supply. It also shows that deforestation due to wood fuel collection is often very localised and generally only occurs in areas that are already under stress due to other ecological factors such as drought..
Extensive research in Asia (FAO, 1998), suggests that only about one-third of wood fuel comes from forest land. The majority of wood fuel is collected from individual trees and shrubs, or from shelterbelts and woodlots on agricultural land. The same research indicated that wood fuel collected for own-use is rarely transported more than 20 km, but may be transported for up to 100 km if it is being collected for resale. Further research has also shown that charcoal may be transported for even greater distances due to its higher value. Thus, as people move up the "fuel-ladder" from wood fuel to charcoal, wood fuel collection (and on-site conversion into charcoal) may move into forest areas that were previously economically inaccessible.
Another point to note is that the collection of wood fuel often does not compete with production of industrial roundwood and may not greatly harm standing trees. For a start, all over the world, research indicates that deadwood is preferred to greenwood as a wood fuel source because it is lighter, does not require drying and burns more easily. Furthermore, if deadwood is not available, branches are often preferred to whole trees because they are easier to cut and require less cutting to the sizes suitable for stoves and domestic fireplaces. Again, however, in commercial wood fuel collection operations it may be more efficient to utilise whole trees.
In conclusion, wood fuel supply comes from a variety of sources and utilises a range of types of wood apart from whole trees. There are examples of local wood fuel scarcity and deforestation due to wood fuel collection around some of the world's largest and poorest towns and cities. However, it is likely that the increased demand for wood fuel projected earlier will not, on its own, lead to greater deforestation except in a few localised areas. A more important mechanism by which wood fuel demand may lead to greater deforestation is the likely commercialisation of wood fuel collection and greater conversion of wood fuel into charcoal, as wood fuel consumers incomes rise.
The challenge for policymakers will be to plan for the increased energy needs expected in developing countries and respond with appropriate strategies to supply these needs in the most efficient way and with minimal disturbance to the most highly valued forest areas. This is likely to require increased capacity of government institutions to identify and analyse these needs and develop an appropriate framework whereby wood fuel markets can develop alongside the maintenance of natural forest areas.
In order to assess current and future potential fibre supply, it is necessary to examine trends in forest area, forest volume and forest removals and consider other developments such as the expansion of forest plantations and the development of new potential fibre sources. To compound the challenges in assessment, it is also necessary to consider the impacts of constantly shifting market forces and forest policies on these factors and the way they interact with one another.
Based on the information collected as part of the GFSM, APFSOS, and GFPM modelling exercises, FAO has started to examine these issue in more detail. (A brief description of the supply models used in these models is given in Box 3). A comparison of roundwood production with production potential in the Asia-Pacific region is given in Box 4 and a more general comparison of industrial roundwood production and fibre supply potential for the whole of the world is given in Table 11.
Box 3: A brief description of the supply and demand models used by FAO in recent outlook studies
FAO have two main forecasting models which can be used to produce wood supply and demand projections: the Global Fibre Supply Model (GFSM) and the Global Forest Products Model (GFPM). As will be shown later, the GFSM only examines supply, but forms is an important input to the GFPM, which forecasts both supply and demand. An extension to the GFSM was also constructed for the APFSOS and this is explained below.
The Global Fibre Supply Model (GFSM)
The GFSM is a model of future potential wood and fibre supply, based on detailed information about the area and characteristics of forests, harvesting regimes (i.e. the amount of wood which is harvested per hectare in each cutting) and growth rates, harvesting efficiency, recovery of wastepaper and non-wood fibre pulping capacity. The model contains information about these variables, which can be used to project future supply, for nearly every country of the world.
In terms of forest characteristics, the model mostly contains information which is important for the calculation of future supply including: forest area by type and stocking; area logged and unlogged; and information about the areas which are potentially available for wood supply or unavailable due to legal, economic, or biological factors or reasons of accessibility. For forest plantations the model includes: area and species and potential growth rates.
The model projects future supply as a function of area multiplied by harvesting intensity or yield, depending on the type of forest, for each of the forest types available for wood supply in each country. In the absence of detailed age-structure data, the model also applies various yield reduction factors to the potential yields from forest plantations to take into account the immaturity of some plantation areas. The yield forecasts from all types of forest are also reduced to take into account harvesting efficiencies or the proportion of utilisable yield which is usually taken from the forest. (To a certain extent, the weakest component of this projection framework is the lack of reliable yield estimates from around the world). In addition to these forest-based supply components are added estimates of future potential wastepaper recovery and non-wood fibre utilisation.
The model can be used to project potential supply under a range of alternative assumptions about rates of deforestation, rates of harvesting in the unlogged forest and the expansion of the harvesting frontier into previously inaccessible forest. Changes in future plantation establishment, wastepaper recovery and non-wood pulping capacity are also important variables which affect future potential supply and future scenarios for these variables can be examined in the model. The scenario used in the baseline analysis presented here is one of continuation of past trends in these variables.
The Global Forest Products Model (GFPM)
The GFPM is a market simulation model of future wood and wood product production, consumption and trade for every country of the world. The model takes supply and demand curves for each country, fixes these such that the model roughly replicates global production, consumption and trade in the last year for which actual data is available and then shifts these curves out for every country and each year of the forecast. As part of this process the model identifies the trade flows and price changes necessary to clear all markets within each year of the forecast, using a linear programming algorithm. In contrast to the GFSM, the GFPM produces projections of actual wood production rather than potential production.
The demand curves used in the GFPM were estimated from an econometric analysis of past consumption using data taken from the Forest Products Yearbook (FPY). The analysis gave estimates of price and income elasticity for countries and projections of future income growth were used to shift the demand curves for each year of the forecast. On the supply side, estimates of the price elasticity of industrial roundwood supply were taken from the forest economics research literature. The supply curves for each country were then shifted in each year of the forecast on the basis of the projected changes in future potential supply given by the GFSM.
Box 3 (continued): A brief description of the supply and demand models used by FAO in recent outlook studies
Wood product production and the links between future product demand and roundwood and product supply in the model are specified in the model as functions of a series of technical coefficients such as roundwood to product conversion factors, capacity utilisation and wastepaper recovery rates. The baseline analysis presented here assumes no change in future technology, but does assume that the recovery and utilisation of wastepaper will increase in the future at the same rate as it has in the past.
Supply and demand model used in the Asia-Pacific Forestry Sector Outlook Study (APFSOS)
A considerable amount of in-depth information about wood supply and demand and timber markets generally was collected as part of the APFSOS. Given this wealth of data and the amount of time available, it was possible to examine future supply and demand in this region in greater detail than was possible in the broader global studies. In particular, the study gave a greater insight into future wood supply and supply potential, by examining in greater detail factors such as plantation developments, technology and supply from trees outside of forests. Some of these insights are presented in the following box and the main differences between the APFSOS and GFSM supply analysis are briefly described below.
In terms of forest products markets, the supply and demand projections presented in the APFSOS were constructed in roughly the same way as above. The GFSM was used to project changes in potential industrial roundwood supply and the GFPM was used to translate these into projections of future actual supply and demand. However, in the APFSOS, the industrial roundwood supply projections were also adjusted somewhat to reflect policy statements about future supply and demand from various forestry administrations in the region. These modifications have been included in the analysis presented here for the Asia and Oceania region, but not for any of the other regions.
On the supply side, further modifications were made to the GFSM projections in the APFSOS to reflect the greater amount of data available about the region. The basic area statistics and projections contained in the GFSM were used in the APFSOS, but the potential supply projections were modified somewhat to take into account information available about the age structure of plantations and concessions in some countries in the region. Additional potential sources of supply were also considered in the analysis including: harvesting residues; wood processing residues; and trees outside of forests (including agricultural tree crops, for which there was considerable data).
The concluding section of the analysis examined how different sources of wood supply and improvements in harvesting and processing technology could be used to meet future wood demands at the same time as meeting other forestry policy objectives. It also identified the policy changes and investments which might be needed to follow different courses of action. This is the approach which will be attempted on a wider scale in part two of this report.
Source: FAO (1998 and 1999a) and Tomberlin et al (1999)
Box 4: The range of potential wood and fibre supplies in the Asia-Pacific region
An analysis of the supply outlook for all potential sources of wood and fibre supply was carried-out as part of the Asia-Pacific Forestry Sector Outlook Study (FAO, 1998). This analysis incorporated data from the GFSM (plantations, natural forest, recycled and non-wood fibre), an earlier study by Blanchez (1997) which included information about supply potential from trees outside the forest and a separate analysis of the potential volume of harvesting and wood processing residues produced each year. The main findings of the analysis are shown in the graph below.
The bars in the graph show the potential production of sawlogs and other fibre (small roundwood, residues, recovered paper and non-wood fibre) in 2010. Each pair of bars represents one of the following sources: natural forest (NF); plantations (PL); other wooded land (OWL); trees outside forests (TOF); harvesting residues (HRE); recovered and non-wood fibre (RNW); and wood processing residues (WPR). The forecasts were made on the basis of existing technology (except for a trend towards more recovery of wastepaper in the future) and policies (e.g. with respect to the area of forest in legally protected areas). However, historical trends in forest conversion to other land-uses were also incorporated in the forecast. The horizontal lines also show projected production of recycled and non-wood fibre, pulpwood, sawlogs and wood fuel in the region in 2010 from GFPOS 98.
As the graph shows, the region has a large potential to produce sawlogs and other fibre from outside the areas that would be typically considered in forestry supply and demand analysis (i.e. natural forest and plantations). In terms of other fibre production potential, non-forest sources far exceed the potential of the forest to meet production needs. For example trees outside the forest have twice the potential to produce small roundwood as forest plantations, due to the large area of agricultural land (particularly agricultural tree crops) in the area. (However, few reliable statistics on trees outside forests are available, so the exact magnitude of this resource is somewhat uncertain). Recovered paper and wood processing residues could also meet the regions entire needs for pulpwood. In terms of sawlog production, the forest industry typically has to look to forests to get the required high quality of logs. About half of the potential sawlog production in the region is from the natural forest and a further quarter from forest plantations. However, even in this category, trees outside forests account for the remaining one-quarter of production potential and could go a long way towards meeting sawlog production requirements.
Several countries with limited forest resources (e.g. many countries in South Asia) already use a wide variety of sources for sawlog and fibre supply. Countries that currently rely on natural forests to supply much of their needs also generally have the option to do this should they wish to.
Source: FAO (1998)
Box 4 shows that, comparing the forecast roundwood production levels estimated for 2010 for the Asia-Pacific region with production (or estimated biological) potential, future wood production requirements can be easily met within the region. However, a more detailed examination of the results also showed that, in certain countries and for certain types of wood, particularly sawlogs, supplies are going to become increasingly scarce in the future.
FAO does not yet have sufficient data to make an accurate assessment of the total wood and fibre production potential for the whole world. The GFSM, for example, covers a large part of the world, but excludes some regions and the important contribution of trees outside of forests. Another major weakness of the GFSM is the reliability and availability of yield estimates for forests from around the world. However, the GFSM and other official supply projections such as Fifth European Timber Trends Study or ETTS V (UN, 1996a) and North American Timber Trends Study or NATTS (UN, 1996b) can be used to make some sort of comparison between projected levels of actual production with projected future supply potential from the forest and recovered and non-wood fibre sources across some regions. Such a comparison is shown in Table 11.
Table 11: Forecast production of wood and fibre from forests, recovered and non-wood fibre sources compared with estimated potential production in 2010
Region |
Forecast of actual production in 2010 |
Forecast of roundwood | ||
industrial roundwood |
recovered and non-wood fibre |
total |
and other fibre production potential in 2010 | |
Africa |
84 |
2 |
86 |
81 |
Asia |
421 |
222 |
643 |
729 |
Oceania |
54 |
0 |
54 |
80 |
Europe |
502 |
133 |
632 |
893 |
North and Central America |
658 |
147 |
805 |
835 |
South America |
153 |
2 |
155 |
225 |
World total |
1,872 |
506 |
2,375 |
2,843 |
Note all volume figures are in million m3 EQ (i.e. the figures for recovered and non-wood fibres have been converted to their industrial roundwood equivalents). The figures for potential production in Europe in this table are from ETTS V and include industrial roundwood, residue and recycled paper production, except for Russian Federation, where the official AAC for 2010 has been used. The potential production figures for North America are official estimates of future industrial roundwood production only and exclude the potential contribution of recovered fibre supplies. Consequently, total production potential in North America is far greater than shown here.
As Table 11 shows, forecast production levels appear to be well within the forecast limit of forest, recovered paper and non-wood fibre production potential in all regions except Africa. However, three points are worth noting:
1. It must be stressed that the projections of future supply potential from the GFSM are incomplete, are not strictly comparable with the results from other studies such as ETTS V and NATTS and are based on what little data is currently available (which might be quite unreliable in many cases).
2. The projections from the GFSM in the above table present results which should probably be considered as an absolute maximum amount of potential supply. The cost of accessing increasingly marginal areas, which are included in the GFSM analysis, may prevent the total potential supply presented above from being utilised in the near future.
3. It should be remembered that, while supplies at a broad regional or country level may be plentiful, there may continue to be local scarcity which puts forestry policymakers under pressure to release areas of natural forest for timber harvesting in some areas.
In regions such as Africa and Asia, where supplies (particularly supplies of large logs) from forests are coming under pressure, consumers of wood and fibre may increasingly have to look to other sources of supply to meet demands (as they already are in some parts of Asia). This is particularly likely if increased scarcity is combined with more effective monitoring and control (i.e. to stop overharvesting). Alternatively, a perhaps more likely future, is that markets for forest products will continue to move in the direction of substitution of sawnwood and plywood by other wood-based panels and engineered wood products, which can be manufactured from small sized wood or non-wood substitutes.
The above analysis suggests that supplies of wood and other types of fibre required to meet demand for the foreseeable future will be broadly within the productive capacity of the world's forests and other fibre sources. However, the situation will vary between countries and regions. For example, South Asia will continue to have to use a wide range of non-forest supply sources to meet their needs. Sawlog production will also approach the capacity of forests and plantations to provide the required higher qualities of logs in some regions, such as: Africa; Southeast Asia; and the Pacific Islands.
Given the above, it is also expected that product prices will not generally rise significantly over the projection period. Upward pressure on the prices of certain types of wood (typically the higher grades) may arise, but the price and availability of cheaper wood and non-wood substitutes will limit the potential for price increases. Such conditions will also encourage shifts in processing towards reconstituted panels at the expense of sawnwood and plywood.
Trading patterns are not expected to change significantly, except that the trend towards more in-country processing of wood raw materials is expected to continue in the future. This may lead to slower growth in trade in semi-processed and commodity grade wood products in the future compared with trade in higher value products.
7 A brief description of the supply and demand models used to make all the projections presented here is given in Box 3 later on.
8 Defined, for the purposes of this analysis, as members of the OECD.
9 Wood raw material equivalent or m3 EQ is calculated as the amount of industrial roundwood required to produce a given quantity of final forest products (i.e. sawnwood, panels and paper). This conversion is used to make countries forest product consumption projections comparable with their industrial roundwood production projections.
10 To avoid the complexities of including the use of recovered paper in these calculations, wherever wood product production and consumption is compared with industrial roundwood production and consumption, wood products has been defined as including only: sawnwood; wood based panels and wood pulp. This is, of course, slightly misleading in situations where recovered paper and non-wood fibres are an important component of the total fibre supply used to make paper.
11 The global decline in production and consumption since 1990 is largely attributable to falls in production and consumption in the countries of the former USSR. This may be, in part, a statistical anomaly.
12 For the purposes of this comparison, processed product production has been defined as the production of sawnwood, wood-based panels and wood pulp.
13 There are also certain production economies from using pulp in integrated mills (i.e. mills that produce pulp and then use it straight away to produce paper and paperboard).
14 Countries may also, in the future, export more wood products as finished products such as furniture, doors and window frames, which will not show-up in forest product statistics.
15 The projections given here are based on FAO's WAICENT statistics. Revised projections will be produced later as part of the FAO's Global Forest Products Outlook Study working paper series.
