UNECE Timber Committee forecasts rebound in wood and paper products markets in 2010 and 2011

During annual Market Discussions at the UNECE Timber Committee on 11-12 October in Geneva, experts forecast an upturn in wood and paper products markets (consumption, production and trade) in 2010 and 2011 for the UNECE region. Forest products markets are rebounding from a consumption drop of 12% in 2009. The Market Discussions were conducted for the first time together with the Society of Wood Science and Technology and the resulting, officially adopted, Market Statement summarizes the most current market information on forest products market developments as discussed and as described in more detail in the UNECE/FAO Forest Products Annual Market Review, 2009-2010.
 
The forecast improvement is strongest in Europe and Russia. In North America the housing crash in the United States from a peak of 2.2 million housing starts, which was the main cause for the downturn, may have bottomed out in 2009 at less than 500,000. In North America, without this main driver for wood products, all forest products markets, except wood energy, fell in 2009, and were forecast to rise only slightly in 2010. Full recovery of UNECE region forest products markets will need US housing starts to recover to a more sustainable level of near 1 million. Capacity reductions in the wood processing sector meant that when demand increased in 2010, prices generally rose for roundwood, sawnwood, panels and paper. Unemployment in the forest sector rose during the downturn and currency exchange rate fluctuations have only added to the turmoil.
The dramatic downturn in forest products markets, and the subsequent restructuring of forest-based industries, is a cause of the structural change which has occurred in the forest sector. Another reason is the escalation of wood energy: in 2009 the one major exception to the downturn in markets was wood energy which was buoyed by governments’ policies for renewable energy sources. A third factor for the change is the globalization of forest products production and trade. Finally, the increased control of international wood sources in order to ensure legality and sustainability affects timber producers, traders, users and consumers alike.

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