Filed Under (News&Views) by Mason Pan on October-25-2011

Trends In International Wood Trade Market

International wood markets are changing . The market changes are driven by exporters, importers, consumption idea and government policies . Understanding the wood market trends is very important for global traders, munufacturers . The wood market trends means new business opportunities. Conforming to the industry trends will maximize your ROI (Return of Investment) in your future business.

1. Government Of Exporting Countries restrict the export of low value-added wooden products

In order to protect environment or promote the development of wood industry, some exporting countries restricted export of unprocessed logs. For example, the former leading hardwood log supplier Indonesia instituted an indefinite log export ban in October 2001; Gabon started to ban unprocessed log exports in 2010; Russia, who is largest exporter of logs in the world , restricted the export of round logs by increasing export tax.

2. Exporting Countries stimulate exports of value-added wooden products

Some exporting countries want to boost the export of high value added wooden products rather than low value-added wooden products like sawn logs . E.g.: Both of Russia and Gabon had enacted policies to promote local timber processing industries and increase Wood Processing Rates before export.

3. Restrict or ban harvesting primary forest / natural forest and rely more on plantation forest

In response to deforestation and degradation of natural forests, more and more countries start to impose restrictions or total logging bans in harvesting natural forests . This’s a good measure to protect forest ecosystem and ensure sustainable development. Plantation forests is the best alternative source of industrial lumber. E.g., Almost of all lumbers are harvested from plantation forest in New Zealand; large volume of wood are harvested from forest plantations in China.

4. Increase export taxes on logs and rough sawn lumber

Increasing export taxes on logs and unprocessed lumber is regarded as a measure to restrict export low value-added products, stimulate development of demestic forest industry, reduce unemployment and protect natural forests . E.g.: This method has been adopted by Russia, Gabon.

5. Increased demand of legal and sustainable lumber products, furniture, floor and other wooden products

Many countries are aware of the importance of Sustainable Forest Management (SFM) and are combating illegal logging . Some countries like EU have implemented policy measures (E.g. FLEGT Action Plan) to drive demand for verified lumber . ‘FLEGT is a voluntary scheme to ensure that only legally harvested timber is imported into the EU from countries agreeing to take part in this scheme’ ( http://ec.europa.eu/environment/forests/flegt.htm ). It’s obvious that the demand for legal lumber is increasing now, though there is a shortage of legal and sustainable timber and the prices of certified lumbers are still much higher .

Some international or national organizations have been established for promoting sustainably managed forests: like
FSC (Forest Stewardship Council)
http://www.fsc.org/
The PEFC Council (Programme for the Endorsement of Forest Certification schemes)
http://www.pefc.org/
Verification of Legal Origin (VLO)
http://www.rainforest-alliance.org/
The Sustainable Forestry Initiative® (SFI)
http://www.aboutsfi.org/
Malaysian Timber Certification Council (MTCC)
http://www.mtcc.com.my/
Lembaga Ekolabel Indonesia  (LEI) — Indonesian Ecolabelling Institue
http://www.lei.or.id/

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