UN/ECE Timber Committee -Geneva, September 2002

David Venables Bsc AIWSc

European Director – American Hardwood Export Council

www.ahec-europe.org

Sawn hardwood markets -temperate hardwood developments

Sawn hardwood markets – 2001highlights

• Sawn hardwood production in UN/ECE declined, led by sharp drop in United States

• Sawmill production in central & eastern Europe increased significantly

• Western European production fell back after 1999 storms oversupply

Production

Sawn hardwood markets – 2001highlights

Imports/exports

• Export trade flows for UN/ECE region down by 5% compared to 2000 - (U.S. -9%, EU -13%)

• UN/ECE import trade flows for sawn hardwood down by 6%

Sawn hardwood markets – 2001highlights

Consumption

• Apparent consumption in the UN/ECE fell from its peak in 2000 – weakened U.S. market

• Central and eastern European consumption is increasing – Furniture manufacturing and re-export to the EU

Sawn hardwood markets – 2001highlights

Influencing factors

• The tragic events of 11th September accelerated reducing

demand in already fragile markets

• Rapid development of Asian furniture industries - far reaching

effect on US hardwood trade

• European sawmillers lost ground in established Asian markets

• Markets continued to be affected by rates of currency exchange.

• Environmental issues, focused on certification, received

increased media attention

Current market developments in the UN/ECE region

• The USA & most European economies continue to slow • Euro has strengthened to parity with US$• Geo-political stability – crisis in the Middle East• Beech demand reducing – over production may affect price stability• Oak demand stronger – increasing promotion • Production in western Europe falling further • Eastern European production also affected by slower EU demand• Production in North America stabilising • Consumption of temperate hardwood continuing to fall • Asian furniture imports continue to impact – especially in USA • Flooring demand still firm - concerns regarding overcapacity

Future trends for UN/ECE region

• Political & economic instability will continue to impact on market confidence

• Any economic recovery in the region likely to be modest• Sawn hardwood exporters will increasingly target Asian markets

- further growth in china• A stronger Euro will improve opportunities for US exports to

Europe• Pressure on illegally logged tropical hardwoods – create further

shift to temperate hardwoods• Further relocation of established wood processing units to Asia• Central & eastern Europe will continue to grow in importance both

in terms of sawn hardwood and manufacturing capacity