Demand for hardwood from tree plantations is predicted to intensify as worldwide commercial and political pressures continue to restrict the traditional logging of natural forests. Sawn hardwood is an important product both for structural and appearance type applications. Globally the important uses are furniture (29 percent), mouldings (20 percent), structural housing (18 percent), flooring and panelling (8 percent)[3], and decorative (8 percent). Production and export of tropical wood products, such as plywood and veneer, have grown two to threefold in the last 30 years[4].
Japan is the third hardwood consumer after China and Indonesia, especially with respect to their wooden house market, which uses both structural and decorative timber. Substitution with softwood lumber in many construction uses has led to decline in the actual consumption of sawn hardwoods in Japan[5].
North and Central America represent the second largest hardwood market in the world. The market is however extremely competitive and has a good ongoing supply of high quality locally grown hardwoods and is currently a net exporter. The mainland USA will probably continue to be confined to an importer of specialist or niche hardwood[6].
Traditionally, Europe has been a large importer of hardwood lumber but it is expected that this region will become increasingly self sufficient as a result of maturing post-war plantings, coupled with regeneration following large wartime fellings[7]. A study of the markets for tropical hardwoods in Europe indicates that their demand for furniture and construction are relatively price inelastic. Future levels of consumption are likely to be affected by non-price factors, such as fashion, anti-tropical timber campaigns, and general economic conditions, rather than by the price of tropical timbers (FAO 1991).
Other effects on hardwood consumption include the use of reconstituted panels such as medium density fibreboard (MDF) in furniture manufacture, supply changes including log export bans, and the potential effect of certification[8].
There is some evidence of a shift away from veneer-based panels towards composite panels. This trend coupled with relative price changes, technology and consumer concerns over tropical deforestation may combine to reduce demand in the future. A chemical process developed in the Netherlands has proved successful in upgrading softwood into a product with all the attributes of tropical hardwood species[9]. It is not apparent as to the extent such technology can imitate the characteristics of hardwoods. Alf Leslie (1999) has argued the mass markets for specialty and decorative timber products can be met through technological developments that eliminate the technical differences between softwoods and hardwoods and reproduce the decorative figures through overlays. But beyond the mass market, only the genuine article will do.
The main alternative to solid wood for value added end uses such as mouldings, doors, flooring, furniture components and laminated products (e.g. plywood), is reconstituted panels with veneer coating. Of these MDF is the greatest competitor due to its working properties, dimensional stability, ability to accept coatings and reasonable cost. Solid wood is losing ground to MDF throughout the Asia-Pacific region. However, despite its expected lower overall market share, the reducing availability of high quality solid hardwoods is expected to provide growth opportunities for producers[10].
The structure of the forest products sector is expected to change given the expected changes in raw material supply. Hence, the proportion of products requiring large diameter logs as raw materials (e.g. sawnwood and plywood) will start to decline, while the proportion of products able to utilise small diameter timber and fibre, such as paper, board and non-veneer wood based panels (e.g. particleboard and MDF) will rise.
A survey of the subscribers of the ITTO Tropical Timber Market Information Service with respect to the likely trends in the tropical timber market over the next 5 to 10 years indicates that technical properties and appearance were the main factors that give tropical hardwoods a competitive advantage. The study also shows that temperate hardwoods followed by non-wood products, provide the toughest competition to tropical hardwoods in the furniture sector while the toughest competition in the joinery sector comes from softwoods followed by temperate hardwoods (Adams 2000).
Despite a forecast in the increase in the total hardwood production in the world over the next 20 years, demand is expected to increase at a faster rate, and the amount of hardwood suitable for sawing and veneer production is expected to fall. This is especially so in the Asia-Pacific region[11].
