Consideration of the modelled scenarios and the other findings of this report lead to the following forecasts.
Natural forest log scarcity will be offset
Although harvest forecasts from current sources may be optimistic, sufficient incremental log supply will become available to avoid scarcity through improved utilization of current log sources, low-impact harvesting of sensitive sites, and the importing of conifer logs.
Hardwood log trade will decline
Hardwood log trade will decline across the region, and several more ITTO producer countries will become net importers by 2010.
Malaysia becomes an importer of logs
The volume of trade in hardwood logs will decline as Sarawak and Sabah progressively curtail log exports. However, Malaysia, principally Peninsular Malaysia, is already an importer of hardwood logs. This trade will grow over the study period, with most of the processing meeting demand for domestic consumption or further processing as value-added products.
Indonesia becomes a net log importer
Indonesia currently bans log exports and is considering log imports from Vietnam, Myanmar, and the Solomon Islands to offset declining log supplies. Log imports are likely to increase during the study period.
Papua New Guinea will probably continue to export logs.
Papua New Guinea's current policy is to reduce log exports by 10% each year for the period 1995-2000, and ban log exports thereafter. However, the domestic processing industry is generally non-competitive relative to other exporters of the region, and may be unable to absorb a significant increase in log supply. Consequently, log exports will likely persist well past 2000 and may even expand. Log exports from Papua New Guinea will compete with highly competitive log and product substitutes; significant price changes are unlikely.
Myanmar and Vietnam have an export opportunity
Myanmar and Vietnam have an opportunity to expand their log exports in the short term as the major exporters curtail their trade.
Conifer logs imports will expand
The region will import substantial volumes of conifer logs to provide substitutes to tropical logs in the manufacture of sawnwood and plywood, and the raw material for manufacture of substitute products such as reconstituted boards and panels.
Manufacturing will relocate to producer countries
Relocation of manufacturing capacity away from the consumer countries to the producers has been underway for some time, and will continue throughout the study period. This shift is due partly to normal market forces: the higher cost of manufacturing in consumer countries makes the producer countries more competitive and the manufacturing capacity in the producer countries is becoming more efficient. Relocation will also be accelerated by policies, such as constraints or bans on the export of tropical logs, or slowed by import tariffs and non-tariff barriers.
Sawnwood manufacturing will increase
Sawnwood manufacturing will increase in the producer countries, largely in response to growth in domestic demand and the development of secondary manufacturing for export. The same economic fundamentals will result in the manufacture of conifer sawnwood in the producer countries, making hardwood sawlogs available for manufacturing products for export.
If sawnwood manufacturing is to increase in consumer countries, it will be based on imported conifer logs, at least for lower-end products.
Plywood manufacturing will decline
Plywood manufacture will decline across the region as the supply of peeler-quality logs declines and consumers adopt reconstituted panels.
Manufacture of substitute products will expand
While substitute products will be imported from outside the region, new capacity will also develop within the region to manufacture substitutes, especially reconstituted boards and panels. The increasing supply of conifer logs and small logs resulting from intensive utilization of current log sources are attractive sources of raw material. New capacity to manufacture substitute products from underutilized fibre from current sources will most likely be established near their source of supply in the producer countries. However, new capacity based on conifer logs may be established in producer or consumer countries.
Sawnwood and plywood trade declines
Although processing capacity will shift to the producer countries, the overall trade in sawnwood and plywood will decline.
Substitute products trade increases
With new manufacturing capacity for substitute products being established in the producer countries, the trade of substitute products will expand in the region.
Prices will remain stable
Although demand will continue to be strong in the region and the harvest from the natural forest is at, or above, its long-term sustainable level, this analysis demonstrates that product and technological substitution could cause real prices to remain stable, or even decline, over the study period. This result is sensitive to the rate of substitution accepted by consumers and the rate of growth in demand for tropical timber solid-wood products.
