In 2008, China’s wood industry was strongly impacted by the international financial crisis. Based on statistics from China Customs, imports of logs dropped for the first time, while sawnwood imports continued to rise. A total of 29.57 million m³ of logs valued at USD5.182 billion were imported in 2008, down 20% by volume and 3% by value from 2007. These results, which have never been seen in the last ten years, largely resulted from low demand for international furniture and plywood. Another reason causing the reduction of imports was Russia’s increased export tariff, which led to a sharp drop in China’s imports of Russian logs. 

On the other hand, China’s imports of sawnwood continued to increase. A total of 7 million m³ of sawnwood valued at USD2 billion was imported in 2008, up 9.6% by volume and 15% by volume, respectively, from 2007. This was mainly caused by rising prices over the period. With prices of logs increasing, some manufacturers used sawnwood as materials instead of logs

Confirming price forecasts at end-February, there have been higher export prices for logs of a limited number of selected West African species. Reports indicate a shortage in supply has enabled producers to ask for higher prices as buyers look for sufficient volumes to make shipments viable. Almost all demand is from India and China, although Vietnam is still an active buyer for its steadily expanding furniture manufacturing companies. In these market conditions, price movements tend to be much larger than in more stable times and this applies to losses as well as (what may be temporary) gains.  

Lumber prices have not yet shown any changes following increases in log prices, but business for sawn and processed lumber has been very low, with many mills still closed or working only at low capacity, and with little improvement forecast for Europe in the second and third quarter. As a consequence, sawmills are unlikely to successfully push for price rises in the short-term. Sapele lumber is an exception and prices in the region have been very weak with low or no demand from European buyers. UK reports are of importers and merchants selling existing stocks of sapele and other tropical hardwoods at below replacement prices when losses from the falling value of the British pound are taken into account. Both the pound and the euro have fallen heavily against the US dollar, making stock replacement values seem high in comparison to prices paid last autumn.