Who is who in the United States

Main products imported by the U.S.

Costa rica, pioneer in the sale of environmental services

The trend is toward more plantations

The EU is the second-most important market in the world

Bolivia: marginal participation in the european market


 

The U.S. is the main market for wood and forestry products of Bolivia and most of the Latin American countries. In 2002, the U.S. consumed a total 116.8 million m3 of sawn wood, and 16.7 m3 million of plywood, with a total value of $30 billion.

Solid wood demand in the U.S. is based mainly on construction. Sawn wood and plywood used for construction is produced almost entirely from soft woods—almost 80% of the total. In these uses, tropical hard woods cannot compete with the quality and price of the soft woods available locally, so the market for tropical wood products (such as those produced in Bolivia) is in niches like exclusive high-quality furniture, where its aesthetic appeal and particular physical characteristics are valued. This is demonstrated by the high prices paid for them: North American sawn hard wood is sold at prices averaging $400/m3, while an average $700/m3 is paid for the tropical species (sawn soft wood is barely $180/m3).
 

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The three main products of wood from well-managed tropical forests in the North American market are: 1) quality sawn hard wood for finishings 2) plywood not suitable for construction and 3) specific value-added products.

The U.S. market for tropical sawn wood is small. In 2002, the U.S. consumed more than 25 million m3 of sawn hard wood (tropical and non-tropical): 24 million m3 was supplied internally and 1 million m3 came from Canada. Total consumption of sawn tropical hard wood was only 350 thousand m3.

With strong pressures from sawn hard wood of domestic production that has a lower price, good quality and is plentiful, tropical woods have limits to their competitiveness in the market. It should be pointed out that the suppliers and/or producers don’t have 1) a grading system compatible with that used in the U.S., 2) wood drying capacity is limited, and 3) the means of transport and ports are not based on the buyer's demands.

Almost half of all the plywood of hard woods consumed in the U.S. (1.4 million m3) comes from tropical countries, and is used for finished products, such as cabinetmaking and furniture. After Japan, the U.S. is the world's second-largest consumer of tropical plywood, with an average value of $.325/m3 per annum. Indonesia is the main supplier (41%), followed by Malaysia (23%). The remaining 36% comes from Brazil and other countries in South America (International Tropical Timber Organization data).

The products with value added for decking, flooring and furniture are three large segments in the U.S. with an important presence of tropical hard woods.

Tropical hard wood decking has 1% of the $3 billion U.S. residential market. The main disadvantages of tropical woods in the decking market are the high price and the lack of a constant and reliable supply. The Ipe or Tajibo (Tabebuia sp) is currently the tropical wood most commonly used in decking in the U.S.

The market for the U.S. hard wood floor products is $1.4 billion per annum. Most hard woods used for floors in the U.S. are of domestic origin. Tropical hard woods have a small portion (almost 11%) of that market. This is important, because imports of tropical hard woods for floors was approximately $150 million per annum in the last three years (U.S. Department of Agriculture). Tropical wood floors face heavy competition with the abundant high-quality North American hard wood. One reason is that the United States is sending national wood species to China for processing, and the finished floor is re-imported into the U.S. for sale in the retail market. Thus, China is becoming an important intermediary market for the products whose final destination is the United States.

The U.S. furniture market is valued at approximately $74 billion per annum. In this market, it is difficult for tropical hard woods to compete with the lower prices of these high-quality North American woods. The most successful tropical wood suppliers are those that concentrate on a single species, or on the more traditional species used in the furniture market.

U.S. furniture imports are $12.2 billion per annum, with China providing 35% ($4.27 billion). Other important suppliers are: Indonesia, Malaysia and Brazil. The transfer of furniture production to China creates opportunities for other producers of tropical hard woods in the Chinese market, because the production facilities are used to respond to Chinese and international demands, and this country is less resistant to the use of tropical species that are not very well-known .

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Forestry plantations in Costa Rica are the most important national cultivation, with 123 thousand hectares of forest planted since 1987.

This country is a world pioneer in establishing payment for environmental services, and also in financial strengthening the forestry sector, due to the great value given to the forests and their environmental services.

The value of environmental services and the need to charge for them are relatively new concepts in the world, and Costa Rica has devised and applied financial mechanisms to collect and pay for these services. The theory is that if we want to continue receiving water, energy, clean air and scenic beauty, which are translated into revenues from tourism and other activities, it is necessary to properly preserve, recover and manage the forests. The price of this is one that the users of these services should pay: countries, companies and people.

Costa Rica created a financial mechanism called a "Negotiable Emission Certificate" (CTO), under international agreements. These are sold in exchange for carbon dioxide capture. Likewise, the country puts a tax on the fuels and hydrocarbons used by the public service water, electricity and hydroelectric companies.

Of the collections from fuels, 3.5% is for the owners of forests and plantations (Min. of Environment and Energy, Costa Rica).

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In the next years, Bolivia’s plantations will be close to 0% of total forest plantations in the Latin American and Caribbean region.

This region has a total 964 million hectares of forests (FAO, 2002)—this is 47.8% of the region's 2.02 billion hectare total surface.

The forest distribution varies by area: 25% for the Caribbean, 30% for Central America and Mexico, and 50% for South America.

Considering individual countries, Brazil has 56.4% of the forests in the region. Bolivia’s forests are 5.5% of the total.

By 2020, the region's total forests are expected to diminish from the 964 million hectares of 2002 to 887 million hectares in 2020, or 47% of the region's total area.

It is also expected that the forestry plantations will increase from 12 million to more than 16 million hectares total area.

Bolivia’s 46 thousand hectares of plantations are currently 0.3% of the region's total.

It is also forecast that protected areas will increase. In the period from 1950 to 2003, the protected areas grew from 17.5 million hectares to 397 million hectares, reaching 19% of the region's total area, and 23% of the protected areas worldwide.

In the next few years, it is expected that new protected areas will be created in the region, including mega-parks and biological corridors. Bolivia has close to 18 million hectares of protected areas, or 17% of its total surface.
 

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The European Union (EU) was the world's second-largest importer of wood products ($12.3 billion) in 2002. The largest single importer was the United States ($15.7 billion), and Japan was third, with imports of $9.2 billion in that same period.

Most of the wood consumption of the EU manufacturing industry is based on soft wood, which is almost eight times more than hard wood consumption.

It has been noted that hard wood is more sensitive to negative market variations. In 2002, consumption of hard wood in logs went down 31% and sawn wood 5%. However, the consumption of soft wood in logs fell 1.8% and sawn wood went down 1.9%.

We can also see that the imports of wood in logs (almost 135 million cubic meters) surpasses sawn wood (82 million cubic meters) by more than 65%.

It is important to emphasize that almost 100% of the world's soft wood comes from forestry plantations.

In Bolivia, the majority of wood production comes from natural forests, and consists mainly of hard wood. However, market niches in the countries of Europe, and the United States and Japan, are important to Bolivia. Forestry plantations in the country have a not-yet exploited potential that is still to be realized.

Wood consumption in the EU fell slightly, due to strong competition against other materials in the paper and cardboard industry, recycling regulations for the use of wood packing, reducing consumption of: particle board wood products, (plywood and wood fiber board).

Another factor for decreased demand for wood and wood products was the weak growth in several European Union countries. This was reflected in the stabilization of the construction industry in 2001, after a period of growth that lasted until the end of 2000. It is expected that this industry will be reactivated by 2004.

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Bolivia exports $12 million of wood products to Europe per annum. This is a 0.06% participation in the European Union (EU) wood imports from countries outside the EU community.

Reviewing the period from 1999 to 2001, total EU imports grew by 2% annually. But in the last year, from 2000 to 2001, the EU's wood and wood product imports fell by 8%.

The imports from developing countries and the rest of the world were €15 billion in 2001. However, intra-regional imports, i.e. among member countries, were €22 billion.

Of the EU's €22 billion imports of wood and wood products, 19% came from developing countries, 50% from other non-associated countries, and the remaining 31% from member countries.

The United Nations’ Food and Agriculture Organization (FAO) reports that the strong drop in German imports (17%) have affected imports among the European Community countries—they fell by 8% from 2000 to 2001.

The main countries in terms of participation in the value of exports in 2001 were: the United Kingdom 16.5%, Germany 15%, Italy 14.3%, France 9.4%, the Low Countries 7,6%, and Spain 7.4%—these 6 countries making up 70% of the European Union's €22 billion total imports.

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