7 Reasons Why Timber Export is a Lucrative Business
Timber export is the process of selling wood products to other countries. It is a lucrative business because of the high demand for timber in various industries, such as construction, furniture, paper, and bioenergy. In this article, we will explore seven reasons why timber export is a profitable venture for anyone who wants to start or expand their own business.
1. Timber is a renewable resource.
Unlike fossil fuels or metals, timber can be replenished by planting new trees or managing existing forests. This means that timber exporters can have a steady supply of raw materials without depleting the natural resources of the planet.
2. Timber is versatile and adaptable.
Timber can be used for many different purposes and products, depending on the type, quality, and processing of the wood. For example, timber can be used to make plywood, particleboard, veneer, lumber, flooring, furniture, doors, windows, cabinets, musical instruments, toys, and more. Timber can also be modified to enhance its properties, such as durability, strength, resistance to insects and fungi, and fire retardancy.
3. Timber is environmentally friendly.
Timber is a natural and biodegradable material that does not emit harmful greenhouse gases or pollutants when harvested or used. On the contrary, timber can help mitigate climate change by absorbing carbon dioxide from the atmosphere and storing it in the wood. Timber can also reduce the energy consumption and emissions of other materials by replacing them or being used in combination with them.
4. Timber is affordable and accessible.
Timber is one of the most abundant and widely available natural resources in the world. According to the Food and Agriculture Organization (FAO), there are about 4 billion hectares of forest land in the world, covering 31% of the global land area. About 1.2 billion hectares of these forests are designated for production purposes, meaning that they can be harvested for timber or other products. Timber prices are also relatively low compared to other commodities, making it an attractive option for both producers and consumers.
5. Timber export is a source of income and employment.
Timber export can generate income and employment for many people involved in the wood industry chain, from forest owners and workers to processors and traders. According to the FAO, the forest sector employs about 50 million people worldwide, directly or indirectly. Timber export can also contribute to the economic development and social welfare of the countries that produce and consume wood products.
6. Timber export is a driver of innovation and technology.
Timber export can stimulate innovation and technology development in the wood industry by creating new markets and opportunities for wood products. For example, timber exporters can use advanced techniques and equipment to improve the quality and efficiency of their production processes, such as harvesting, transportation, processing, grading, packaging, and storage. They can also develop new products and services that meet the needs and preferences of their customers, such as engineered wood products, wood-based composites, wood pellets, wood chips, and wood waste management.
7. Timber export is a way of promoting international trade and cooperation.
Timber export can foster international trade and cooperation between countries that produce and consume wood products. By exchanging goods and services, timber exporters and importers can benefit from each other’s comparative advantages and complementarities. They can also share knowledge and experience on best practices and standards for sustainable forest management and wood product development.
These are some of the reasons why timber export is a lucrative business that anyone who wants to start or expand their own business should consider. However, timber export also comes with some challenges and risks that need to be addressed carefully. For example, timber exporters need to comply with the laws and regulations of their own countries and those of their destination markets regarding forest management, environmental protection, quality control, customs clearance, taxation, certification, labeling, etc. They also need to deal with market fluctuations, competition, transportation costs, currency exchange rates, etc.
Timber export trends and prospects
Timber is one of the most important renewable natural resources in the world, providing various products such as sawnwood, wood-based panels, pulp and paper. Timber export is a significant source of income and employment for many countries, especially those with abundant forest resources. However, timber export is also influenced by various factors such as demand, supply, prices, policies, environmental issues and trade agreements. In this article, we will examine some of the recent statistics and developments in the global timber export industry and discuss some of the challenges and opportunities for the future.
Global timber production and trade
According to the Food and Agriculture Organization (FAO), the global production of roundwood (the raw material for timber products) reached 3.9 billion cubic meters in 2020, a slight decrease of 1% compared to 2019. The main producers of roundwood were the United States (19%), Russia (16%), Brazil (10%), Canada (8%) and China (7%). The global production of sawnwood (the most common timber product) was 473 million cubic meters in 2020, a decrease of 3% compared to 2019. The main producers of sawnwood were the United States (23%), China (15%), Canada (14%), Russia (11%) and Germany (6%). The global production of wood-based panels (such as plywood, particle board and fibreboard) was 367 million cubic meters in 2020, a decrease of 1% compared to 2019. The main producers of wood-based panels were China (58%), the United States (8%), Russia (6%), Germany (4%) and Canada (3%). The global production of pulp (the raw material for paper) was 197 million tonnes in 2020, a decrease of 2% compared to 2019. The main producers of pulp were the United States (18%), Brazil (16%), China (15%), Canada (10%) and Indonesia (7%). The global production of paper and paperboard was 401 million tonnes in 2020, a decrease of 1% compared to 2019. The main producers of paper and paperboard were China (28%), the United States (17%), Japan (8%), Germany (7%) and India (5%).
The global export value of forest products was estimated at $244 billion in 2020, a decrease of 10% compared to 2019. The main exporters of forest products were Canada (13%), China (12%), the United States (11%), Germany (8%) and Sweden (6%). The main importers of forest products were China (18%), the United States (15%), Germany (7%), Japan (6%) and India (5%). According to Eurostat, the EU produced 507 million cubic meters of roundwood in 2021, an increase of 3.9% compared to 2020. The main producers of roundwood in the EU were Germany (16%), Sweden (15%), Finland (12%) and France (11%). The EU exported 134 million cubic meters of roundwood in 2021, an increase of 1% compared to 2020. The main destinations for EU roundwood exports were China (39%), Turkey (13%) and Norway (8%). The EU imported 43 million cubic meters of roundwood in 2021, a decrease of 4% compared to 2020. The main sources for EU roundwood imports were Ukraine (25%), Belarus (24%) and Russia (21%). Sweden was the fifth largest exporter of pulp, paper and sawn timber in the world in 2021, with an export value of SEK 164 billion ($18 billion), an increase of 13% compared to 2020. About 85% of Sweden’s forest products were exported, mainly to Europe (66%) and Asia (19%).
Factors affecting timber export
The demand for timber products is driven by various factors such as population growth, urbanization, income levels, consumption patterns, housing construction, industrial development and environmental awareness. The supply of timber products is determined by factors such as forest resources, forest management practices, technology, costs, policies and regulations. The prices of timber products are influenced by factors such as market conditions, exchange rates, tariffs and subsidies. The trade flows of timber products are affected by factors such as trade agreements, trade barriers, transport infrastructure and logistics.
Some of the recent trends and developments that have impacted the global timber export industry are:
- The COVID-19 pandemic has caused significant disruptions and uncertainties in the global economy and trade, affecting both the demand and supply sides of the timber market. While some sectors such as packaging, hygiene products and home improvement have seen increased demand for timber products, others such as printing, publishing and furniture have seen reduced demand. The pandemic has also affected the availability and cost of labor, raw materials, transport and logistics, as well as the implementation and enforcement of forest policies and regulations.
- The climate change crisis has increased the awareness and urgency of addressing the environmental impacts of the timber industry, such as deforestation, forest degradation, biodiversity loss, greenhouse gas emissions and carbon sequestration. The timber industry has also faced the challenges and opportunities of adapting to the changing climate conditions, such as droughts, fires, pests and diseases. The timber industry has also been involved in various initiatives and commitments to promote sustainable forest management, reduce emissions, enhance carbon sinks and support green recovery.
- The digital transformation has enabled the timber industry to adopt new technologies and innovations to improve efficiency, productivity, quality, traceability and transparency of the timber supply chain. The digital transformation has also created new opportunities and challenges for the timber industry to access and serve new markets, customers and stakeholders, as well as to communicate and collaborate with them.
Challenges and opportunities for the future
The global timber export industry faces various challenges and opportunities for the future, such as:
- The increasing competition from other materials such as plastics, metals and composites, as well as from other regions such as Asia and South America, which may affect the market share and profitability of the timber industry.
- The changing consumer preferences and expectations for timber products, such as higher quality, lower price, greater variety, better design, more functionality, more convenience, more customization and more sustainability.
- The evolving regulatory frameworks and standards for timber products, such as stricter environmental, social and governance (ESG) criteria, certification schemes, labeling requirements, due diligence obligations and trade rules.
- The emerging market opportunities for timber products, such as bioenergy, bioplastics, biocomposites, biochemicals and biopharmaceuticals, which may offer new sources of revenue and value addition for the timber industry.
To address these challenges and opportunities, the global timber export industry needs to adopt various strategies and measures, such as:
- Investing in research and development (R&D) to develop new products, processes and services that meet the current and future needs of the market.
- Enhancing innovation and digitalization to improve efficiency, productivity, quality, traceability
and transparency of the timber supply chain. - Strengthening collaboration and cooperation among different actors and stakeholders in the timber industry, such as producers, processors, traders, customers, governments, NGOs and research institutions.
- Promoting sustainability and responsibility in the timber industry, such as implementing sustainable forest management practices, reducing environmental impacts, enhancing social benefits and complying with ethical principles.
References:
https://doi.org/10.1016%2Fj.worlddev.2007.02.005
https://www.fao.org/forestry/statistics/80938/en/
https://ec.europa.eu/eurostat/statistics-explained/index.php/Wood_products_-_production_and_trade
https://www.forestindustries.se/forest-industry/facts-and-figures/
https://unece.org/forests/fpamr2021
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