Economic aspects of forestry utilization

Harvest

Total roundwood production in the Asia-Pacific region in 2000 amounted to 758 million m³, or 24.7 percent of global production^[14]. Production of wood for fuel in the region totalled 515 million m³, or 34 percent of global woodfuel production. Roundwood production for industrial purposes totalled 243 million m³, or 16 percent of the world's total. Coniferous industrial roundwood production in the Asia-Pacific region totalled 113 million m³, and non-coniferous production totalled 130 million m³. Industrial roundwood production from forest plantations in the region in 2000 was estimated^[15] to be 142 million m³, which suggests that current production from natural forests is somewhere in the vicinity of 100 million m³. The majority of industrial wood produced officially^[16] (i.e. that is entered into official statistics) in the region is now sourced from plantation forests. There are, however, large volumes of wood harvested, illegally or otherwise, which do not appear in official statistics.

China (287 million m³) and Indonesia (117 million m³) are easily the region's largest producers of wood, together accounting for 53 percent of the region's production. In terms of industrial roundwood production, China, Indonesia, Malaysia, Australia, New Zealand and Japan all produced more than 15 million m³ in 2001. No other country produced more than 5 million m³. It should be noted that there remains considerable scope for improvement in forest products statistics. Some critics claim, with justification, that actual harvesting in some countries may be twice, or even three-times, as high as official figures, due to reporting discrepancies, inefficient data collection, illegal logging and various forms of corruption that distort the data.

Important changes have occurred in industrial roundwood production levels in sub-regions during the past decade (Figure 4). Among the most evident are significant declines in harvest in South Asia and Insular Southeast Asia, largely as a result of declining harvests in India, Malaysia and Indonesia. Industrial roundwood harvests in these three countries are reported to have collectively declined by slightly more than 50 million m³ in 2001, compared with 1991 levels. It should be noted that, in Indonesia at least, the problem of illegal logging is sufficiently severe that this decrease can be attributed to harvesting shifting from the legitimate forestry sector to illegal sectors. Otherwise, a significant portion of declining harvests in these countries is primarily a result of tighter regulations on forest harvesting, including a ban on harvesting in most of India's natural forests. These have brought about changes in trade dynamics, including import access in India, and shifts toward the production of higher value products.

Figure 4: Changes in industrial roundwood production by sub-region

Source: FAOSTAT

The grouping of Advanced Industrialized Countries has been segmented to display Australasia (Australia and New Zealand) and Japan as separate components, highlighting the marked increase in Australasian harvests and a commensurate decline in Japan's harvest. The decline in Japanese roundwood production is primarily due to increasing costs, rendering harvesting uneconomic in many areas. The Australasian industrial roundwood harvest has increased 12 million m³ per annum during the past decade, and a similar magnitude of increase is expected during the next decade as additional plantations mature. Similarly, the timber harvest in China increased modestly in the period 1991-2001, but this does not reflect a significant substitution of plantation grown timber for timber sourced from natural forests. In the past several years, natural forest harvests in China have declined markedly in response to the natural forest logging bans implemented in 1998. This has had significant effects on forest products trade flows in the region with, for example, China's log imports increasing by around 44 percent in 2002, in tandem with a 33 percent increase in sawn timber imports. During the next decade, plantation timber supplies in China are expected to increase dramatically.

Wood energy contributes a significant portion of the region's total energy consumption, particularly in South and Southeast Asia. Woodfuel production and use are highest in China, India, Indonesia, Philippines, Bangladesh, Viet Nam, Pakistan and Thailand. Woodfuel consumption, as a percentage of total energy use, is highest in Lao PDR, Bhutan, Cambodia and Myanmar, where woodfuel use exceeds 75 percent of total energy consumption (Figure 5).

Figure 5: Share of wood energy in total energy consumption 1997

Source: RWEDP, 1997

Forest products and industry

Wood processing capacity in the Asia-Pacific region has increased enormously during the past 30 years, but has been more than matched by major increases in consumption of wood products in the region. A large part of industrial production capacity is concentrated in the most developed countries: Japan, Australia, New Zealand, Republic of Korea and Malaysia; as well as those with the largest populations and forest resources: Indonesia, China and India.

Japan (17.1 million m³) and India (16.3 million m³) were the largest producers of sawnwood in 2001, together accounting for 51 percent of the region's total production. Most countries in the region produce moderate volumes of sawnwood, with a median production (excluding very small island countries) of around 300 000 m³. Sawnwood production in the region constituted 13 percent of world production in 2001.

Sawnwood consumption in the region exceeds production (Figure 6), with the balance imported from other regions, dominated by Japanese imports from North America and Europe. The majority of sawnwood consumption is by Japan (27 million m³), India (16.3 million m³) and China (12.1 million m³), which collectively account for 71 percent of Asia-Pacific consumption.

Figure 6: Production and consumption of sawnwood and wood panels - 2001

Source: FAOSTAT

The largest producers of wood panels in the region are China (18.6 million m³), Indonesia (8.4 million m³), Malaysia (5.9 million m³) and Japan (5.7 million m³). These countries collectively account for 81 percent of wood panel production in the region. There is, however, significant diversity in the types of wood panels produced in each country, with production in Indonesia and Malaysia heavily dominated by plywood and veneer. The majority of wood panel production in China and Japan is also plywood, but these countries also produce large volumes of fibreboard and particleboard. The Republic of Korea and New Zealand are also major fibreboard producers in the region. Thailand and Australia both produce around 1 million m³ of particleboard, while the Republic of Korea produced around 0.75 million m³ of plywood in 2001. The Asia-Pacific was the largest regional producer of wood panels in 2001, accounting for 30 percent of global production.

The Asia-Pacific region, as a whole, is nearly self-sufficient in wood panels (Figure 6), although Japan, China and Republic of Korea are all significant importers, collectively totalling 15.7 million m³ (91 percent of the regional total). These are offset, to a large extent, by exports from a number of countries, most significantly Indonesia and Malaysia, which account for 70 percent of the region's wood panel exports.

Production of pulp, paper and paperboard is mainly confined to a small number of countries in the region. Japan, China, Indonesia, India and New Zealand all produce more than 1 million tonnes of pulp per year, and these countries account for 88 percent of wood pulp production in the region. China and Japan are easily the largest producers of paper and paperboard, although Republic of Korea, Indonesia, India, Thailand and Australia are also significant producers. These seven countries account for 96 percent of the region's production. The region as a whole accounts for 15 percent of global pulp and 30 percent of paper and paperboard production. The region is the second largest consumer of paper and paperboard behind North America, accounting for 32 percent of global consumption, though per capita consumption in Asia-Pacific is much lower than in North America and Europe.

Domestic and international markets

The contribution of the forestry sector to GDP has declined over the past two decades in most countries of the region. Bhutan, Solomon Islands, Lao PDR, Papua New Guinea, Indonesia and Malaysia are the only countries in which forestry contributes 10 percent or more to GDP. In spite of this, forests play important economic, social and environmental roles that are not necessarily reflected in the national accounts. Forestry is also a highly significant contributor to export earnings in several countries. Forestry's contribution to export receipts is greater than 10 percent in Cambodia, Solomon Islands, Myanmar, Lao PDR, Fiji, Indonesia, Bhutan and New Zealand. The forestry sector provides formal and informal employment for millions of people and continues to act as a food reserve in times of hardship.

In many countries, forestry activities are strongly oriented towards trade. Within the region, China and Japan provide the most important markets, with these two countries being the world's second and third largest importers of forest products, behind the United States. Japan and China collectively import US$28 billion worth of forest products. Republic of Korea, Australia, Indonesia and Thailand account for an additional US$8 billion in forestry imports, collectively, with the regional total in 2001 of almost US$41 billion. Growth in China's imports during the past decade has been a notable feature of forest products trade in the region. China's forest products imports have doubled in value since 1993, from US$7.2 billion to US$14.5 billion in 2001. Imports of logs into China increased from 7.3 million m³ to 18.5 million m³ between 1998 and 2001. In the first six months of 2002, China's log imports totalled 12 million m³.

Exports of forest products in the region totalled slightly more than US$20 billion in 2001. Net forestry trade in the region (value of exports minus value of imports) consequently ran a deficit of more than US$20 billion. This net deficit is, however, markedly smaller than the US$24.6 billion recorded in the APFSOS study, for 1995, largely owing to the declining value of wood products imports into Japan (down from US$19.5 billion in 1995 to US$11.2 billion in 2001). Indonesia is the region's largest forest product exporter, with the total value of its forestry exports in 2001 exceeding US$5.5 billion. Other major exporters (Table 7) include China (US$3.9 billion), Malaysia (US$2.7 billion), Japan (US$1.9 billion) Korea (US$1.6 billion) and New Zealand (US$1.5 billion). These six countries collectively account for 85 percent of the region's exports.

Table 7: Value of commodities exported by major Asia-Pacific exporting countries - 2001 (US$ million)

Source: FAOSTAT

Trade in industrial roundwood is an interesting indicator of the adequacy of national forests to meet demand for forest products and the level of development of forest products processing industries, as well as highlighting some important challenges in reconciling data (Table 8). Significant volumes of industrial roundwood are traded among Asia-Pacific countries, but the region as a whole is a strong net importer of industrial roundwood, with large volumes sourced particularly from North America and the Russian Federation. Conversely, only relatively small volumes of industrial roundwood are exported from the Asia-Pacific region to North America and Europe. An interesting feature of Table 8 is the extent to which it highlights data deficiencies in relation to the global forest products trade. For example, Papua New Guinea, Myanmar and Malaysia all report volumes of roundwood exports substantially less than the total volumes of imports reported as sourced from those countries by their trading partners.

Table 8: Direction of trade industrial roundwood - Asia-Pacific region 2000

Source: FAOSTAT

A number of countries in the region have become important producers and exporters of finished wood products, such as furniture. In Malaysia, for example, rubberwood furniture is estimated to account for around 70 percent of the $1.4 billion furniture industry. China's furniture industry currently has a total output value of around US$17 billion, with more than 50 000 manufacturing enterprises. This compares with an industry valuation of just US$160 million in 1978, implying an average annual growth rate of 15 percent over the intervening 25 years. Chinese furniture exports in the first 6 months of 2002 were valued at around US$2.6 billion.

People in the Asia-Pacific region are not generally among the world's heaviest users of wood and wood products (Figure 7). New Zealand, with a relatively small population and extensive tracts of plantation forests is clearly wood rich relative to other countries, producing around 5 m³ of wood per person per annum. Australia, Malaysia and Papua New Guinea are also relatively "wood rich" in per capita terms. Most countries of the region, however, are below the global average of 0.54 m³ of wood production per capita.

Per capita imports of forest products correlate closely with wealth. The more developed countries - Japan, Australia, New Zealand, Republic of Korea and Malaysia - have the highest rates of imports, with Japan purchasing US$106 of imported wood products per capita in 2001. By comparison, a number of poorer countries purchase less than one dollar of imported forest products per capita.

Figure 7: Per capita production of industrial roundwood and imports of wood products in selected countries

Source: FAOSTAT