Lumber Demand in China

China's forest areas cover 4.6% of the total in the world with 174.90 million hectares. The forest coverage only reaches 18.21%, far lower than the world average level of 61.52%. The forest reserves are 12.46 billion cubic meters and still not amount to 3% of the total reserves in the world. The forest area per capita is 0.132 hectares, not reaching 1 / 4 of the world average level. The forest reserves per capita are 9.421 cubic meters and do not reach 1 / 6 of the world average level. The forest reserves per hectare are only 84.73 cubic meters which is equal to 84.86% of the world average level. From the perspective of forest area per capita, China is short in the forestry resource and far behind other countries which have abundant forest resources.

Market overview

In the first quarter of 2008, China imported 8,514,700 cubic meters of logs, decreased 11.53 per cent year-on-year; unit price was 164.42 U.S. dollars per cubic meter, increased 22.25% than 134.5 U.S. dollars in 2007. The demand for timber is a large amount for the paper manufacturing industry also followed by furniture and wood fixture industry. In 2007 the total amount of machine-made paper and paperboard output in China was 77.87 million tons. The output of wood-based panel was 88.3858 million cubic meters, up 18.98 per cent year-on-year; wooden floor was 343.43 million square meters, up 46.77 per cent year-on-year, a significant increasing.

Opportunity for Canadian Lumber Exporters

Canada lumber logs exports to China are driven primarily by demand from China�s Pulp industry, furniture manufacturers and interior decorating sector. For the furniture sector alone, According to China�s Furniture Association, the country total production value of entire industry was an estimated USD $77 billion in 2007. The exports of furniture and home decorating products reached USD $17.4 billion; ranking first in the world, the industry expert is expected to reach USD $ 48 billon in 2010.

China is not only the biggest furniture exporter, but the largest importer of the furniture manufacturing equipment and raw materials. Now china also is the largest timber importing country in the world. In 2006 total lumber imports amounting to $USD 6.51 billion (38.153 million cubic meters, mainly round wood and sawed wood), an increase of 18% compared to 2005.

Canada is a major producer of timber and wood-based products. Great majority of Its exports of timber, pulp, paper and wooden furniture are imported by the US, since US economy slowdown and higher currency rate of loonie against greenback (depreciating 46% against euro, 43% against Canadian dollar). The most of exporting businesses experience huge suffers of volume and value loses. Whereas, some other Canadian companies were able take the advantage of china of market demand and make great success.