ITTO releases latest Biennial Review of the World Timber Situation

ITTO has released the Biennial Review and Assessment of the World Timber Situation 2015–2016, giving insights into developments and trends in the global timber sector and international timber markets. The Review reports on production, trade and prices for primary wood products (industrial roundwood, sawnwood, veneer and plywood); trade and prices for secondary processed wood products (SPWPs); major traded tropical wood species; and directions of trade for primary tropical wood products. Data from the Review are included in the ITTO’s online statistical database, updating it for the period 1990–2016 and making it a formidable tool for analyzing the evolution of, and long-term trends in, the trade of tropical timber and primary tropical timber products, as well as important shifts in timber production and further processing.
 
The latest edition of the Review features a comprehensive case study on the plywood industry in China[1], which has become one of the world’s biggest plywood producers. The case study describes the impacts of China in the supply of raw materials globally, as well as improvements in the efficiency of plywood production and domestic shifts in plywood end uses.
 
The Review’s key findings on primary wood products include the following:

• There was a slowdown in global trade in tropical wood products in 2015 and 2016 in response to supply constraints in major producer countries, particularly Myanmar and Malaysia, and slowing demand in China.
• Imports of tropical hardwood logs by all ITTO members totalled 16.9 million m³ in 2015, down by 13% from a peak in 2014, when demand accelerated in China. Log import volumes continued to decline (by 3%) in 2016, to 16.3 million m³, with most of the drop attributed to a sharp decline in imports by India and Viet Nam from Myanmar, which imposed severe log export restrictions in 2014.
• China continues to dominate tropical log imports, accounting for 59% of total ITTO imports in 2015 and 63% in 2016.
• The major log trade flows in 2015 were from Papua New Guinea and the Solomon Islands to China and from Malaysia to India.
• Many significant producer countries in Asia and the Pacific have some form of log export ban in place—notably Cambodia, Indonesia, Lao PDR, the Philippines and Thailand.
• ITTO producer countries exported 12.3 million m³ of tropical logs in 2015, which was three-quarters of global exports. Shipments from Papua New Guinea, the largest exporter, totalled 3.6 million m³ in 2015, mostly (87%) to China.
• The Asian region continues to dominate the tropical sawnwood trade, with China and, to a lesser extent, Thailand and Viet Nam the major importers. Cameroon, Malaysia and Thailand are the major exporters.
• ITTO producers exported 9.5 million m³ of tropical sawnwood in 2015, accounting for 88% of global exports of tropical sawnwood. China’s imports grew quickly, from 5.1 million m³ in 2015 to 6.6 million m³ in 2016, as more producer countries imposed restrictions on log exports and as manufacturing costs rose in China.
• Thailand remained the top-ranking exporter of tropical sawnwood (mostly plantation rubberwood) in 2015, 99% of which went to China.
• The global trade of tropical plywood has trended downwards in the last decade, with imports declining to 5.1 million m³ in 2015. Although Japan continues to dominate imports, accounting for 30% of total ITTO imports in 2015, import volumes have plunged in recent years in response to substitution by Japanese plywood manufactured from domestic species, upward price pressures on imported tropical plywood, exchange-rate fluctuations, and weaker domestic demand.
• Indonesia and Malaysia continue to dominate exports of tropical plywood, although Malaysia’s exports dropped by 19% in 2015, to 2.5 million m³, in response to the limited availability of raw materials and depressed demand and prices in Japan.

 
The Review’s key findings on secondary processed wood products include the following:

• Total ITTO member country imports of SPWPs—nearly two-thirds of which were wooden furniture and parts—were worth about US$91.3 billion in 2015, which was 89% of global imports of SPWPs.
• ITTO consumer countries accounted for about 94% of ITTO imports of SPWPs in 2015; most (82% of export value) of the trade was between consumer countries.
• Import demand is dominated by advanced economies—predominantly the United States of America, European Union countries, and Japan. Australia, Canada, Hong Kong SAR and the Republic of Korea are also important markets.
• Exports of SPWPs have undergone considerable change by supply source, with substantial growth in exports from China, the Philippines and Viet Nam in recent years more than compensating for relatively subdued export growth in developed economies.
• SPWP exports were valued at $33.4 billion in 2015. China has been the world’s largest exporter since 2003, accounting for 33% of all exports by ITTO consumers in 2015.
• ITTO producers accounted for 18% of SPWP exports by ITTO member countries in 2015, with the share increasing slightly.
• Asia-Pacific was the dominant ITTO producer region for SPWPs in 2015, accounting for more than 82% of exports by ITTO producers. Latin America accounted for 17%, and African exports made up less than 1% of the total.
• Viet Nam accounted for 35% of SPWP exports by ITTO producers in 2015, up by 10% over 2014, to US$6.2 billion.
• Indonesian and Malaysian SPWP exports both declined by 4% in 2015, to US$3.5 billion and US$2.5 billion, respectively.
• Other major exporters of SPWPs among ITTO producer countries in 2015 were Brazil, India, Mexico, the Philippines and Thailand.

 
Case study on the Chinese plywood industry
The Review’s case study on China’s plywood industry included a detailed survey of 282 plywood mills and 26 on-site visits, making it one of the most comprehensive and complete surveys to date on the plywood industry in China. China has become one the world’s biggest plywood producers in a relative time (25 years), due partly to the economic transition and reforms. Such a boom in quantity has constrained the supply of raw materials: today, 70% of supply is derived from fast-growing plantations of mainly poplar and eucalypt, and this demand has encouraged the expansion of China’s plantation estate.
 
The case study provides valuable detailed information on the plywood production process. It found, for example, that in China, an average of 1.43 m³ of raw material is used to produce 1 m³ of plywood, a rate of wood conversion comparable with rates in the world’s most advanced economies. There has been a shift in end use for plywood produced in China: 70% of plywood produced in China in the 1980s was used for furniture-making but, today, only 12% is used for this purpose; other major uses today are construction (25%) and interior decoration (21%). Future challenges for Chinese plywood production include ensuring the sustainability of low-cost labour (one of the key advantages of the Chinese industry) and the sustainability of the raw-material supply through domestic plantations and, potentially, international joint-venture plantations involving Chinese and foreign companies.
 
Download the Biennial Review 2015–2016
Download the Biennial Review’s graphs and figures
Download the Biennial Review’s tables
Download the case study on the Chinese plywood industry
See previous editions (1987–2014) of the Review