B r o a d S p e c t r u m U t i l i s a t i o n o f W o o d

June 14th – 15th 2005, Vienna - Austria

Wladyslaw Strykowski, Prof. Dr.

Wood Technology Institute, Poznan, Poland

WOOD PRICES IN POST-SOCIALISTIC

ECONOMY

WOOD PRICES IN POST-SOCIALISTIC

ECONOMY

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

In market conditions, wood and forest products prices

represent the main economic category of the forest-wood sector resources

management!

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

Key drivers of the forest-wood sector: appropriate roundwood prices

stable macro-economic policy

free trade

development of sector analyses

need for environmental protection

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

Ownership structure of roundwood removals in Poland

Private forests Private forests

4%4%

Public forests Public forests

96%96%

• 99,5% owned by the State Treasury

of which: 98,9% State Forests 0,7% national parks

• 0,5% local community owned

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

€

the maximum wood prices are set by prices of roundwood alternatives (cement, steel, plastic, non-ferrous metals, etc.)

the minimum wood price is represented by the cost of removals

(of which: costs of planting, nurturing)

=

=

DEMAND

SUPPLY

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

The regional differences in prices of the same wood sortments and types can be attributed to:

• general level of development of individual regions

• natural location

• regional market supply and demand which depend, among others, on the number of woodworking plants and volumes of roundwood generated in individual regions

• roundwood sales methods (tenders, free market sales, etc.)

• cost of roundwood transportation to woodworking plants

• potential for competitive imports of roundwood from abroad (this factor is of special importance in the border areas)

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

The main factors that can drive the global demand for roundwood to a different extent and, as a result, drive price fluctuations:

population growth general economic growth (economic development) technical progress

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

World populations

2,43,1

3,74,4

5,3

6,16,5 6,8

7,5

8,9 bn

1950 1960 1970 1980 1990 2000 2005* 2010* 2020* 2050** estimations

Source: FAOSTAT

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

Technological and product innovations play an important role in the entire forest-forest industry chain. These innovations are aimed at: improving biological characteristics of trees, including efficiency of a unit space

reducing cost of processing and increasing material efficiency

designing new and attractive forest products to win new sales markets

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

As regards roundwood, demand generated by buyers is the key pricing driver. However, pricing can be impacted also by such factors as:

costs of roundwood removals costs of transport, in particular in the case of roundwood imports costs of forests exploitation (excluding rental fees or land prices) costs of forest non-production functions; delivery of these functions by forests (without the State subsidies) significantly increases the ongoing costs of forest management which translates directly into wood prices

WOOD PRICES IN POST-SOCIALISTIC ECONOMYWOOD PRICES IN POST-SOCIALISTIC ECONOMY

Wladyslaw Strykowski, Prof. Dr.Wood Technology Institute, Poznan, Poland

€€

Price of lumber

Economic cycles

Sales forms

Imports of roundwoodQuality-size parameters

of individual sortments

Price flexibility

Production of alternatives

assortment

Other price drivers