China has taken over from the United States (US) as the largest consumer of wood from British Columbia in Canada, according to Forestry Research Associates (FRA).
FRA, a research and analysis consultancy, has said that the new figures show how the region has diversified its markets for the key products generated from the local forestry industry. The market for forestry products in China is booming at the moment as the country struggles to keep up with its economic growth through construction. At the same time, the market in the US is reasonably stable, meaning that the Chinese are paying more for their timber.
During May, the US bought 835,000 cubic meters of British Columbia timber, which was the largest amount, in terms of volume. However, in terms of value, China bought $122 million worth of timber from the region, despite the volume only totalling 746,000 cubic meters.
“Asian markets are willing to pay more for their timber at the moment because demand is so incredibly high,“ explained FRA researcher, Peter Collins. He added, “Although China imported slightly less wood than the US, volumes were still up by an impressive 157 per cent on the same month a year age, while US imports dropped off by a significant 24 per cent.”
The figures illustrate how vital the Asian market is to Canadian, and indeed US, forestry industries. David Elstone, an industry analyst speaking to The Vancouver Sun, stated that May was something of a one-off as prices slid in general to enable China to exceed the US in terms of money spent on timber. However, the prices returned to their more normal levels in June 2011 and are not expected to slip back so much in the US until the Fall at the earliest.
Mr Elstone, of Equity Research Associates, added, “It could switch back and forth, depending on the volumes and the pricing [and] what’s happening in the U.S.”
FRA said that these latest results show that the appetite for timber products in China are still strong, which should be welcome news for forestry investors everywhere. “Those investing in sustainable forestry, through firms like Greenwood Management and Robinia Invest should be feeling positive about the market for forestry products at the moment, as economies in Asia continue to grow,” added Mr Collins of FRA.
About Forestry Research Associates
Forestry Research Associates is a research and advisory consultancy that focuses on forestry management, sustainability issues and forestry investment around the globe.
This article is a press release from FRA.