China releases 2009 timber production plan
Asia Observatory

22 December 2008

China releases 2009 timber production plan

China’s annual timber production plan for 2009 was published by the State Forestry Administration on 4 November 2008.
Under the plan, 158.57 million m³ of timber will be logged and timber output will be 100.39 million m³.
The three provinces with the highest logging volume and timber output are: Guangxi Province (19.91 million m³ of logging volume, 13.13 million m³ of outputs); Fujian (17.43 million m³ of logging volume, 12.06 million m³ of outputs) and Hunan (15.16 million m³ of logging volume, 9.703 million m³ of outputs). The logging volume and timber outputs of these three provinces make up 33% and 35% of the national total, respectively.
China’s furniture enterprises generate 210 billion yuan It has been reported that China’s furniture enterprises generated RMB210 billion yuan during January to September in 2008, up 21% over the same period in 2007.
The total value of furniture exports rose 23% to USD19.8 billion. The volume of wooden furniture exports fell 9% but the value of the wooden furniture exports rose 6% over the same period.
The value of furniture imports grew 22% to USD945 million. In general, the growth rate of China’s furniture industry was faster and its structure was optimized gradually.
Local experts predict that the total output value of China’s furniture will exceed RMB600 billion yuan and the value of furniture exports will be USD26.6 billion.
Currently, China furniture production makes up 25% of the world’s total, its furniture exports account for 23% of the world’s total and it has been the major producer and exporter of furniture in the world. However, potential problems exist in China’s furniture industry such as rapid enterprise investment, unreasonable production structure, over capacity of production, severe similarity in design and style and deficiency in innovation capabilities.
Log imports fall through Jiangsu Port as prices rise According to statistics from Nanjing Customs, log imports through Jiangsu Port in the first three quarters of 2008 fell 8.3% to 5.65 million m³ and were valued at USD1.25 billion (up 1.2%) from the same period in 2007.
Log imports through Jiangsu Port were mainly from Papua New Guinea, African countries and Russia. Log imports through Jiangsu Port from Papua New Guinea, African countries and Russia fell 4% to 1.74 million m³, 25% to 1.26 million m³ and 16% to 1.12 million m³, respectively.
Log imports from these three regions accounted for 73%, down 5 percentage points from the same period in 2007. Average prices for imported logs rose about 8% to USD220.5 / m³ in the first three quarters of 2008.
According to local analysts, there are two main reasons for the decrease: first, major exporters of logs such as Papua New Guinea and others in Africa have developed log export ban policies; and second, Russia has increased its log export tariff to control log exports.

Jiangshan City recognized as capital of wooden door production

Jiangshan City has been awarded the title ‘Capital of China’s Wooden Doors’ by the China Timber Circulation Association. The wood products industry in Jiangshan City has developed rapidly in recent years. There are more than 1,170 enterprises in the city with a total of 30,000 employees and 100 wood products from six major categories:
wood-based panels; wooden doors; furniture; charcoal; wooden products; and chemical processing of forest products.
In the first three quarters of 2008, the output value of the city’s wood products industry was RMB3.9 billion yuan and annual output value was expected to be RMB5 billion yuan. There are more than 60 enterprises manufacturing wooden doors with an annual production of 4 million sets valued at RMB1.6 billion yuan.
Wooden doors have dominated the markets in areas south of the Yangtze River. Over 50% of wood products from the city are exported to other countries.

Updated trade figures for China’s wood products during January to September 2008

The following discussion provides updated statistics for China’s wood products trade during the first three quarters of 2008, as first reported in TTMR 13:21.

1. The value of China’s imports and exports grow while growth rates fall markedly
According to the latest statistics from China’s Customs, foreign trade of China’s major wood products continues to grow rapidly in the first three quarters of 2008.
However, the growth rate fell dramatically due to the global economic slowdown. The statistics show that the total value of imports and exports for China’s major wood products rose 13.5% to USD48.181 billion, dropping 18.4 percentage points over the same period in 2007.
Of the total, the value of imports for China’s major wood products grew 20% to USD21.383 billion and the value of export for China’s major wood products rose 8.7% to USD26.756 billion, dropping 7.5 percentage points and 26.5 percentage points respectively.
The trade surplus of wood products reached USD5.38 billion, dropping 21 percentage points from the same period in 2007.

2. Prices for major wood products show upward trend
Wooden furniture, paper products, plywood, paper and paper board and wooden products have been China’s traditional exported wood products for many years. During the first three quarters in 2008, the value of exports for these five major commodities made up 72% of the national total. However, during January to September 2008 the export volume for wooden furniture fell and export value rose for paper products, plywood, paper and paper board. Both export volume and value fell for wooden products.
The above-mentioned trend is unfavorable for the sustainable development of China’s forestry industry. A considerable number of small and medium scale enterprises could be forced to stop production or shut down, which would result in mass unemployment and affect social stability in China. The productive capacities of China’s furniture and wood-based panels have exceeded demand due to the rapid development of these two industries.
One third of furniture products are exported to foreign countries. The productive capacity of national middle density fiberboard industry is about 40 million m³ per year, but domestic demand is only around 25 million m³ per year. Under the circumstances, if export volume of these products fell sharply, not only in these industries but also upstream, this would exacerbate poverty and income of farmers, particularly in mountainous regions.

3. Log imports continue to fall but sawnwood imports jump
During January to September 2008 China’s log imports were 23.14 million m³ and valued at USD40.58 billion, down 19% by volume and 0.3% by value over the same period in 2007. In the meantime, sawnwood imports further increased, amounting to 5.23 million m³ by volume and USD1.5 billion by value, up 8% and 14% by value, respectively. The main reasons are: 1) the growth rate of imported log prices was higher than that for imported sawnwood prices, with imported log prices rising on average 24% and imported sawnwood prices growing only 5.6% from 2007 levels; and 2) domestic demand for logs was weak due to the global financial crisis.

4. China’s log imports from countries in Oceania rose markedly
During January to September of 2008, China’s imported logs from Russia were 14.76 million m³ and valued at USD1.99 billion, down 26% by volume and 2.8% by value from the same period in 2007. The main reason for the decrease in log imports was the dramatic unit price rise for imported logs after the Russian government hiked its export tariff on logs.
The unit price for logs rose 30% to USD134.8 / m³ from USD103.38 / m³ over the same period of 2007. It is predicted that China’s log imports from Russia will further drop if Russian log export tariff increases to 80% in 2009.
However, China’s log imports from countries in Oceania grew. During the first three quarters of 2008, China’s log imports from New Zealand rose 33% to 1.25 million m³. In the meantime, the proportion of China’s log imports from New Zealand grew to 5% from 3% in the same period of 2007. New Zealand jumped to being the third largest supply country after moving from fourth place during the same period of 2007. China’s log imports from the Solomon Islands rose 16% to 894,100 m³. The proportion of China’s log imports from the Solomon Islands grew to 3.9% up from 2.7% in the same period of 2007. Solomon Islands jumped to fourth position from sixth place in 2007.
Papua New Guinea continued as the second largest supply country, although China’s log imports from Papua New Guinea fell slightly (4%) from the same period of 2007. China’s log imports from Papua New Guinea grew 1.3 percentage points from 6.5% to 7.8% during the first three quarters in 2008.

5. China’s wood products are highly processed
China’s trade has had a large focus on wooden products and processing of finished products for a number of years. During January to September 2008, the value of imports for log, sawnwood, paper pulp, waste paper and paper products made up about 95% of the national import total. The value of exports for wooden furniture, wooden products, paper products and plywood accounted for 87% of the national export total for wood products.
In the first three quarters of 2008, the top five wood products were raw materials or semi-finished products:
paper pulp, waste paper, log, paper and paper board and sawnwood. The value of imports for these five products made up 85% of the national import total for wood products.
The value of exports for wooden furniture, paper products, plywood, paper and paper board and wooden products accounted for 72% of the national export total.

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