Sawn Softwood
In 1959 world production of sawn softwood totaled 54.04 million standards, exceeding by 2.89 million standards the previous postwar peak recorded in 1955. Between the latter year and 1958 the line of upward progression, constant since the war, dipped to a point just below 50 million standards. The check appeared first in 1956 in the United States and reflected almost exactly the recession observed throughout that country's economy in the same period. In Europe the downward movement came some months later and though of short duration, proved sufficiently severe to unsettle the price structure in 1958. Some curtailment of Europe's production occurred between 1957 and 1959 but the statistical changes were not marked. Of necessity, producers in northern Europe must plan operations far in advance, and the level of production rarely corresponds to the market situation at a given moment. In the period under review some overproduction was evident in the 1957 to 1958 season but as industry and building revived strongly toward the end of 1958, surplus stock became a valuable "cushion," because at that juncture production was being reduced.
World export trade in sawn softwood exhibited only slight fluctuations between 1957 and 1959. In 1957 the total of 6.5 million standards showed a slight improvement over the 1956 export; in 1958 there was a negligible decline, and in the following year exports again turned upward to reach the level of 6.9 million standards. Incomplete data for 1960 indicate that the upward trend in export trade has continued and has at its foundation a considerable enlargement of sawn softwood production.
Undoubtedly the most impressive development of the past three years has been the rapid expansion of sawmill production in the U.S.S.R. Since 1957 the U.S.S.R. has occupied the leading position among the world's producers and although in 1959 production in the United States increased by more than a million standards, the U.S.S.R. remained the largest producer by a clear margin of over three million standards.
The past three years have also been notable for the re-emergence of Canada as an effective competitor in markets outside the North American continent. At the beginning of the period, the post-recession building boom in the United States, coinciding as it did with flagging demand and low prices in Europe, brought heavy reductions in Canadian overseas shipments in 1958 and 1959. In 1960, however, development took an almost exactly opposite course; falling demand in the United States led directly to stock accumulation and lower Canadian prices at a moment when European softwood prices showed renewed buoyancy in response to vigorous buying by the principal importing countries. In 1960 Canada succeeded in doubling her exports to Europe. Among the other regions few changes indicative of new trends are apparent and it would seem that economic development in timber-deficient areas of Asia and the Near East is proceeding at a tempo bearing little relationship to the rate at which resources of coniferous timber are being exploited or import trade in softwood extended. It seems certain, therefore, that industrial development is being sustained by recourse to mineral deposits and man-made materials.
In the following review the more important features of production and trade are discussed region by region.
North America
In 1957 and 1958 cyclical recession affected important sectors of the United States economy, bringing with it a sharp contraction in the production of sawn softwood. At its low point, in 1958, output fell to 13.7 million standards (Table 1), compared with 15.2 million and 16 million attained respectively in 1956 and 1955. Although the general industrial index failed to register an appreciable gain until later in the year, 1958 saw the beginning of a new boom in residential building, induced by low interest rates and reinforced by generous finance made available by the Federal Housing Authority under the terms of the Housing Act of 1958, In April 1958 the Federal Reserve Bank of New York discount rate stood at 1.75 percent and remained at that level until November.
TABLE 1. - UNITED STATES: SAWN SOFTWOOD MARKET (in millions of standards)
|
|
1957 |
1958 |
1959 |
Jan. |
June |
Percentage change from 1959 |
|
Production |
13.85 |
13.70 |
14.80 |
14.42 |
- |
2.5 |
|
Gross stocks (end of period) |
2.96 |
2.83 |
2.91 |
- |
3.221 |
+23 |
|
Imports |
1.38 |
1.60 |
1 90 |
- |
- |
- |
|
Exports |
0.31 |
0.27 |
0.31 |
- |
- |
- |
While industry at large made tardy use of "cheap money," the housing market responded eagerly and by the spring of 1959 housing starts were approaching the high point recorded in 1950. Softwood consumption, in which demand from the building industry bulks so large, showed significant improvement over the greater part of 1958 and in turn contributed to intensified effort in the sawmilling industry. From 1958 to 1959 sawn softwood production rose by over a million standards, and imports, mainly from Canada, increased from 1.6 million to 1.9 million standards. As expansionist trends appeared in other sectors of the country's economy during the closing months of 1958 and the early part of 1959, interest rates rose sufficiently to act as a brake on further development in the housing field. However, demand for sawn softwood remained active up to the fourth quarter of 1959, when signs of stock accumulation at the mills became very noticeable. Consumption in the first half of 1960 underwent drastic curtailment, for although production had not risen to any great extent compared with achievement in 1959, midyear stocks were no less than 23 percent higher than at the same date in the previous year. Toward the end of 1960 the United States administration displayed fresh initiative in the sphere of housing finance which is calculated to revitalize construction during 1961.
For some years the flow of Canadian timber into the United States market has fluctuated in sensitive correlation with the requirements of the U.S. building and constructing industries. As considerably more than one half of Canada's sawn softwood export to the United States is drawn from the mills of British Columbia, the Province which also provides the preponderant share of Canada's overseas exports, the state of demand in the United States exercises an important influence on Canadian policy and export prices. Canadian softwood production exhibited marked stability between 1957 and 1959 and in the same period, exports to the United States increased steadily from 1.4 million to 1.8 million standards (Table 2). In the same period, which coincided with a fall in the general level of European softwood prices, Canadian exports to Europe declined by 30 percent. In the final quarter of 1959 and in the early months of 1960 the Canadian exporters who had made plans for continued expansion of production were compelled to recognize a cutback in orders for the United States, amounting by the end of 1960 to a 0.6 percent reduction of the volume delivered to that market in 1959. Fortunately this loss was heavily outweighed by greatly increased shipments to Europe, and especially to the United Kingdom. The changed pattern of trade is clearly revealed by Table 2. Notwithstanding an over-all increase of 10 percent in Canadian exports in 1960, the build-up of unsold stocks was appreciable and energetic measures were taken to regulate production and reduce inventories. Owing to the abrupt check in United States building activity during the second half of 1959 and a subsequent falling away of demand in Canada, sawn softwood stocks in North America as a whole reached a height not witnessed in recent years.
TABLE 2. - CANADA: SAWN SOFTWOOD MARKET (in millions of standards)
|
|
1957 |
1958 |
1950 |
1960 |
Percentage change from 1959 | |
|
Production |
3.52 |
3.46 |
3.46 |
3.69 |
+ 6.6 | |
|
Total exports of which to: |
1.88 |
2.03 |
2.13 |
2.34 |
+ 9.9 | |
|
|
United States |
1.40 |
|
1.62 |
1.80 |
1.79 - 0.6 |
|
|
Europe |
0.26 |
|
0.23 |
0.18 |
0.36 + 100 |
|
Stocks (end of period) |
0.56 |
0.52 |
0.54 |
0.64 |
+19 | |
Europe
In the period under review, import-export trade, in volume and pattern broadly indicative of industrial trends within the European economy, has displayed somewhat greater fluctuations than the rate of production in the principal countries possessing exportable surpluses. From the high levels of 11.3 million standards in 1955 and 10.9 million in 1956, European production of sawn softwood (outside the U.S.S.R.) dropped back to an average of just over 10.6 million standards for the years 1957, 1958 and did not rise again until 1960 when, it is provisionally estimated, output regained 1955 volume. Over the period from 1954 to 1958, European imports from all sources rose and fell by amounts varying between 250,000 standards and 500,000 standards, while exports from European countries followed the same course, although the quantitative fluctuations were smaller. From 1958 onward, however, both imports and exports showed a consistent upward tendency and in 1960 trade reached proportions comparable with those recorded before the war.
Consumption of sawn softwood has maintained close correspondence with industrial development and the requirements of the housing program in Europe. After a brisk revival in 1957, trade during the following year was hampered by the onset of partial economic recession in western Europe, which in turn imposed restrictions on both industrial and residential building. Economic stagnation, however, was of short duration and in 1959 western European countries joined their eastern neighbors in a new and spectacular advance all along the industrial front. Economic recovery gained momentum throughout the year and although inflationary tendencies, combined with acute labor shortages in some countries of western Europe, necessitated governmental intervention and some damping down of initiative in the interests of stability and orderly progress, expansion of gross national product continued at a slightly higher rate in 1960.
The increasing scale of housebuilding in western and eastern Europe, supplemented by new factory construction and the growth of export trade, gave powerful impetus to sales of sawn softwood in the spring and Summer of 1959 and stimulated an almost unprecedented volume of forward buying in the autumn. In 1959, housebuilding in the U.S.S.R. was 13 percent higher than in 1958 and 39 percent above the 1957 level; in Western Germany house completions were 28 percent higher in 1959 than in the previous year.
Although the log cut in Sweden and Finland was reduced in the 1958/59 felling season and the resultant production of sawn timber in 1959 showed a drop of almost 5 percent by comparison with the 1958 total, the year's much heavier consumption needs were met by depleting the substantial stocks which had accumulated when requirements, owing to the 1958 recession, failed to absorb the relatively high volume of timber production in the 1957/58 season. This point is Witstrated in Table 3, from which it will be seen that Sweden succeeded in raising her sawn softwood exports from 875,000 standards in 1958 to 1.02 million standards in 1959, despite a decline in production amounting to over 200,000 standards, while Finland, with only a modest increase in mill output, was able to push up exports from 758,000 standards in 1958 to 950,000 standards the following year. Toward the end of 1959, increased exports from the U.S.S.R. made a valuable contribution to supplies. On a smaller scale, increased availabilities from the mills in Austria and Western Germany, which were able to adjust production flexibly to changes in demand, played a useful subsidiary role in satisfying the requirements of the building industry.
While current needs were covered in every instance, most of the importing countries in Europe held lower stocks at the end of 1959 than in any year since 1954. In the United Kingdom, for instance, where consumption over the whole year was 11 percent higher than in 1958, stocks at the end of 1959 amounted to no more than 472,000 standards.
On the well-founded assumption that demand in 1960 would at least retain its 1959 strength and would impose a heavy drain on stocks during the early months of the year, importers started their forward buying campaign much earlier than usual. By Christmas 1959, contracts with the U.S.S.R. and both Sweden and Finland had reached the highest level in recent years, the scale of forward purchases standing in sharp contrast with the paucity of short-term supplies. Fortunately, deliveries from southern Sweden, Poland, Czechoslovakia and Austria during the winter and early spring went some way toward alleviating the consumers' difficulties.
In planning production for the 1959/60 felling season, producers in northern Europe had proceeded with much greater boldness than would have seemed prudent a year earlier. Low stocks, firm prices and buoyant demand counseled increased production and it is estimated that Swedish fellings increased as much as 25 percent over the previous year's achievement, reaching a total of between 45 and 47 million cubic meters, while Finnish fellings are reported to have exceeded the peak postwar 1955 total of 43.3 million cubic meters ®. In Europe as a whole (excluding the U.S.S.R.) production almost reached the level of 5.5 million standards, and when the full year's figures are available, they will no doubt show that 1960 production matched or even surpassed the high 1955 total.
TABLE 3. - SAW SOTFWOD MARKET IN EUROPE a (in thousands of standards)
|
|
1957 |
1958 |
1959 |
1960 |
Percentage change from 1059 | |
|
Total production of which: |
10 765 |
10 740 |
10 5.30 |
*11 000 |
| |
|
|
Austria |
940 |
971 |
978 |
1019 |
+ 4 |
|
|
Finland |
877 |
1 000 |
1 070 |
- |
|
|
|
France |
1 085 |
1 085 |
1 049 |
- |
|
|
|
Germany, W. |
1 197 |
1 177 |
1 205 |
- |
|
|
|
Germany, E. |
563 |
564 |
548 |
- |
|
|
|
Poland |
1 366 |
1 313 |
1 283 |
1 233 |
4 |
|
|
Sweden |
1 650 |
1 680 |
1 475 |
- |
|
|
Total imports of which: |
3 815 |
3 570 |
3 980 |
- |
| |
|
|
Germany, W. |
600 |
629 |
678 |
794 |
+ 16 |
|
|
Italy |
390 |
389 |
431 |
- |
|
|
|
Netherlands |
422 |
337 |
422 |
481 |
+ 14 |
|
|
United Kingdom |
1 457 |
1 296 |
1 465 |
1 820 + 24 |
|
|
Total exports of which: |
3 160 |
2 920 |
3 230 |
- |
| |
|
|
Austria |
697 |
661 |
688 |
718 |
+ 4 |
|
|
Finland |
704 |
758 |
950 |
- |
|
|
|
Sweden |
1 099 |
875 |
1 024 |
1 097 |
+ 7 |
* Excluding U.S.S.R.
* Estimated.
Statistics disclosing the complete picture of European consumption are still awaited but data already to hand indicate that the strength of demand was appreciably greater in 1960 than in either of the two preceding years. In this connection it is noteworthy than in the United Kingdom, the leading importing country in Europe, apparent consumption in 1960 rose to 1.64 million standards (6 percent more than the 1959 figure), the highest point reached in any year since the war. Increased utilization, stimulated by a marked rise in industrial and building requirements, was also in evidence in Western Germany as well as in the timber exporting countries. In several countries, however, the pressure of demand was mitigated by technical developments designed to save timber. Without exception, all the leading softwood exporting countries handled a greater volume of business during the year now past, and at the Eighteenth Session of the Timber Committee of the Economic Commission for Europe, held in Geneva last October, the previous year's forecast of 1960 exports was raised by 20 percent in the light of actual demand manifest during the year.
A study of Table 4, which records the movement of sawn softwood between the countries of eastern and western Europe, suggests that eastern Europe is becoming less and less dependent on imports from the west and is now, therefore, receiving bigger supplies from the U.S.S.R. The trend is of considerable interest because, up to 1957, imports from western Europe had been mounting year by year. Between 1957 and 1959, exports from eastern European countries to the west, on the other hand, showed little change.
TABLE 4. - SAWN SOFTWOOD TRADE BETWEEN COUNTRIES OF EASTERN a & AND WESTERN EUROPE b (in thousands of standards)
|
|
1956 |
1957 |
1958 |
1959 |
|
Exports by eastern European countries to the West |
170 |
235 |
252 |
250 |
|
Imports by eastern European countries from the West |
77 |
67 |
40 |
41 |
aCzechoslovakia, Bulgaria, Eastern Germany, Hungary, Poland, an; Romania.
bFigures taken from countries of western Europe.
Production in the U.S.S.R., as presented in Table 5, has undergone remarkable expansion, registering an increase of 4.25 million standards between 1955 and 1959. At 18 million standards, the country's output was the largest in the world. Although total Soviet exports, including 606,000 standards to western Europe represented (at 937,300 standards) only 5 percent of production in 1959, the U.S.S.R. has greatly strengthened her influence on the European timber market. Shipments to western Europe in 1959 were more than double the 1954 total and it is now clear that still larger deliveries were made in 1960. It may well be that Soviet exports to all countries are approaching the level of trade in the years immediately before the second world war, but it should be remembered that the U.S.S.R.'s share of export markets was considerably higher in the early thirties and in the period 1933-36 averaged 1.4 million standards per annum.
TABLE 5. - SOVIET UNION: PRODUCTION AND TRADE OF SAWN SOFTWOOD (in thousands of standards)
|
|
1955 |
1956 |
1957 |
1958 |
1959 |
|
Production* |
13 750 |
13 930 |
14 915 |
17 100 |
18 010 |
|
Exports to western Europe only |
a393 |
a370 |
a461 |
485 |
606 |
|
Imports from western Europe only |
a53 |
a51 |
a53 |
a41 |
a26 |
* Estimated.
a Figures taken from countries of western Europe.
Latin America
Although Latin America is pre-eminently a region of deciduous forests, coniferous species have accounted for between 50 and 60 percent of total sawn timber production for some years past. This phenomenon is explained by two factors: firstly, the relative improvement in the Stocking of marketable species in the coniferous forests, which facilitates commercial exploitation, and secondly, the strongly developed demand for softwood in both regional and overseas markets. Indeed, over 90 percent of the region's timber trade is in sawn softwood.
Production is largely concentrated in Brazil, Chile and in the Central American and Caribbean countries. Brazil alone contributes about 70 percent of the region's total production (Table 6), while Mexico and the Central American countries provide 28 percent. In many parts of the region, however, the coniferous forests have been severely overcut during the past decade. Resources in Brazil, in particular, have been affected by both excessive fellings and the progress of coffee cultivation, while in Honduras uncontrolled exploitation has depleted the forests of the Atlantic coast. On the credit side of the picture, Chile's vast plantations of pine will in the near future yield considerable quantities of log size timber. In Mexico, production of sawn softwood has declined over the past ten years but sound forest management, coupled with improved sawmilling practice, holds promise, so that in due course timber production will be stabilized and perhaps increased.
TABLE 6. - LATIN AMERICA: SAWN SOFTWOOD PRODUCTION AND TRADE (in thousands of standards)
|
|
1955 |
1956 |
1957 |
1958 |
1959 |
|
Total production of which: |
1130 |
1140 |
1020 |
1200 |
1 250 |
|
Brazil |
794 |
756 |
696 |
750 |
- |
|
Mexico |
163 |
185 |
- |
218 |
- |
|
Honduras |
50 |
28 |
44 |
63 |
111 |
|
Chile |
27 |
44 |
34 |
- |
63 |
|
Total exports* of which: |
340 |
220 |
370 |
320 |
255 |
|
Brazil |
238 |
134 |
290 |
239 |
171 |
|
Honduras |
40 |
33 |
44 |
35 |
43 |
|
Chile |
20 |
20 |
6 |
11 |
11 |
|
Total import* of which: |
55 |
280 |
370 |
315 |
240 |
|
Argentina |
179 |
123 |
203 |
192 |
107 |
|
Uruguay |
29 |
20 |
22 |
- |
14 |
|
Venezuela |
25 |
30 |
46 |
24 |
34 |
|
Mexico |
21 |
5 |
5 |
4 |
- |
|
Peru |
14 |
15 |
17 |
9 |
9 |
* Estimated.
Considered as a whole, Latin America's exports and imports roughly balance, averaging about 310,000 standards on either side of the account. The principal exporting country is Brazil, which traditionally sends the bulk of its exports into Argentina, and the remainder chiefly to Europe and Uruguay. On a modest scale Chile has developed a market for its pine exports in Argentina and is now opening up sales in Peru and Uruguay. During the Korean boom, Chilean exporters placed substantial quantities of sawn softwood in the Argentinian market but, at the time, shipments lacked uniformity and the trade suffered a temporary setback. Today, however, producers in Chile are trying hard to modernize their mills and improve the quality of output with the aim of making Chile one of the major sources of supplies for the Argentinian market. Mexican exports go mainly to the United States, and as trade has grown up on the basis of careful attention to buyers' requirements, it is subject to little fluctuation. The Central American countries, notably Honduras and Nicaragua, market most of their sawn goods output in Cuba, Venezuela and Colombia, while minor quantities of special dimensions and qualities (Honduras pitch pine) are shipped to Europe and the United States.
Where imports are concerned, Argentina is the principal consuming center for sawn softwoods. At one time large quantities were received from North America, Europe and the U.S.S.R., but trade in recent years has declined in proportion to the growing importance of Paraha pine imports from Brazil. Over the past five years, economic and currency problems have produced fluctuations in the level of imports. Uruguay, on the other hand, has been able to maintain its customary flow of imports with negligible changes. Other softwood importing countries in Latin America, notably Venezuela and Peru, continue to absorb small quantities of timber from North America.
Africa
By dint of intensive afforestation with fast-growing coniferous species, Africa is steadily building up vital resources of indigenous softwood. According to FAO's World forest inventory 1958, Africa now possesses about 50 million cubic meters of coniferous growing stock. South Africa, which established exotic conifer plantations as early as 1918, claims 31 million cubic meters of the total, while Kenya has 11 million cubic meters and Southern Rhodesia 2.1 million cubic meters. Trade sources indicate that the current production of sawlogs in South Africa may be as high as 3.7 million cubic meters per annum, and FAO statistics suggest that home-grown material is now supplying about half of South Africa's total softwood requirements. Kenya, on the other hand, is largely dependent on its own sawmill capacity.
European countries provide about one fifth of South Africa's sawn softwood imports and the remainder is drawn from North America (principally Canada) and the U.S.S.R. Among the countries almost wholly dependent on imported softwood, the United Arab Republic, Algeria and Morocco are the principal markets. Over the past decade, imports of the United Arab Republic have fallen progressively and have not reached the level of 50,000 standards in any year since 1952. Supplies are obtained in the main from southeastern Europe, Sweden and the U.S.S.R. In meeting the needs of Algeria and Morocco, metropolitan France plays a leading role and as recently as 1960 succeeded in doubling her export to the latter country. Although France takes first place among Algeria's suppliers, Austria at present provides about 20 percent of the country's requirements. The bulk of Tunisia's much smaller import comes from France and Austria.
Consumption in recent years affords an imperfect guide to future needs in the African countries. Political and economic development is taking place at an accelerating pace and it seems probable that the next decade will witness a significant rise in imports and, where silvicultural conditions are favorable, a rapid enlargement of indigenous resources.
Asia
The first half of the past decade saw a remarkable upsurge in the region's sawn softwood production. China's output approximately doubled between 1950 and 1954, while Japan, the largest producer in the Far East, raised production from 2.5 million standards in 1951 to close on 4.4 million in 1957. For the region as a whole the peak year was 1957, when production attained the level of 5.4 million standards (Table 7). More recently production has been stabilized on a slightly lower plateau but still above five million standards. It is considered that the less dramatic progress noted over the past three years should be attributed in part to the growth of other branches of the forest products industry which absorb supplies of coniferous wood.
Consumption of sawn softwood in Asia is hampered by present limitations of production facilities and also by shortage of foreign exchange. These factors are especially relevant in the case of China. It has been estimated that this vast, swiftly growing economy has at its disposal about 66 percent of the growing coniferous stock in Asia; yet production, according to the figures available, is still below a million standards a year. Output potential is considerable but in the huge industrialization program now being implemented, sawmilling must take its turn. In the short term, badly needed softwood imports must be weighed in the balance with still more essential commodities, including primary foodstuffs. There is also a pressing need for manufacturing plant which will play a key part in developing China's home industries and export trade. In time, no doubt, a higher proportion of foreign credit will be available for increased timber purchases and for the logging and sawmilling equipment required to exploit untapped forest resources.
Among the countries of the eastern Mediterraneam, Israel remains the principal market for imported softwood. A 1959 import of 57,000 standards represented the highest annual purchase to date but over a period of years the country's requirements have averaged close to 50,000 standards, so that the single year's gain holds little significance. Turkey's imports have risen and fallen year by year in the most erratic fashion and it now seems clear that increased home production is taking the place of a fairly large proportion of requirements formerly met by imported timber. Among the northern European countries, Finland has made an outstanding contribution to supplies in the Near East and since 1957 an increased volume of timber has gone into the area from the U.S.S.R. Austria, Yugoslavia, Portugal and Romania - traditional suppliers of Near East countries - have also sent in useful supplies.
TABLE 7. - ASIA: SAWN SOFTWOOD PRODUCTION AND TRADE (in thousands of standards)
|
|
1956 |
1957 |
1958 |
1959 |
|
Total production of which: |
4 850 |
5 405 |
5 125 |
5 375 |
|
Japan |
3 933 |
4 403 |
4 169 |
4 411 |
|
China (Mainland) |
750 |
550 |
600 |
- |
|
Turkey |
97 |
114 |
106 |
91 |
|
Total imports of which: |
165 |
200 |
160 |
225 |
|
Israel |
45 |
53 |
45 |
57 |
|
Turkey |
10 |
14 |
3 |
5 |
|
Japan |
18 |
29 |
18 |
32 |
|
Iraq |
14 |
16 |
11 |
12 |
|
Lebanon |
16 |
11 |
14 |
- |
|
U.A.R. (Syria) |
10 |
7 |
201 |
30 |
* Estimated.
Oceania
By 1959, production in this region, rising steadily year by year since the war, had almost reached the level of half a million standards (Table 8). New Zealand, with extensive stands of fast-growing conifers to supplement raw material supplies, has made particularly good progress. Apart from a minor setback in 1956, the upward trend in output has been continuous for some years.
After a sharp drop from the relatively high figures recorded in 1955, imports have varied little from year to year but it is anticipated that statistics for 1960 and 1961 will show a high flow of goods from Europe and Canada, as government restrictions on imports have recently undergone revision in Australia. Recent reports from the region emphasize that building activities are now assuming boom proportions. The softwood demand so created should serve as a stimulus both to domestic production and to heavier purchasing overseas.
TABLE 8. - OCEANIA: SAWN SOFTWOOD PRODUCTION AND TRADE (in thousands of standards)
|
|
1956 |
1957 |
1958 |
1959 |
|
Production |
|
|
|
|
|
Australia |
167 |
167 |
140 |
157 |
|
New Zealand |
281 |
283 |
303 |
330 |
|
Imports |
|
|
|
|
|
Australia |
126 |
105 |
124 |
105 |
|
New Zealand |
7 |
10 |
8 |
7 |
|
Exports |
|
|
|
|
|
Now Zealand |
18 |
15 |
20 |
26 |
Prices
After a period of relatively high and stable prices covering 1956 and the greater part of 1957, the European softwood market weakened, and throughout 1958 c.i.f values steadily declined. The price trend was not world-wide, however, for after touching bottom in 1957, North American prices again turned upward and gathered new vitality in the spring of 1958 as orders from the United States builders poured into the mills on the Pacific seaboard. From that point onward Canadian and European prices moved farther and farther apart and for a time it became virtually impossible for merchantable Canadian timber to compete with constructional softwood produced in northern Europe and the U.S.S.R. European prices responded very slowly to the general economic recovery apparent in most parts of Europe toward the end of 1958, and the downward trend continued in some instances well into the spring of 1959. The 1958 price fall was felt keenly by the European exporters, since high log prices had been paid in the autumn of 1957 on the assumption that market conditions would be stable in the following year. In the next felling season (1958/59) producers scaled down their operations and secured their reduced log requirements at somewhat lower prices than had been paid a year earlier. Sawn softwood prices eventually became stable in April 1959 and, as consumption expanded in step with industrial recovery throughout the summer and autumn, prices gradually strengthened. By the end of the buying season, stocks in shippers' hands had dwindled to insignificant proportions and forward buying for 1960 opened exceptionally early at prices closely in line with those current at the height of the previous season's market. Some slight downward adjustment followed publication of the U.S.S.R.'s opening offer for 1960 but the upward movement was resumed when, later, the U.S.S.R. advanced its prices in an increasingly buoyant market situation.
TABLE 9. - SAWN SOFTWOOD PRICES
During the whole of this period the interplay of Canadian and European offers (a major element in the shaping of international softwood prices) was lacking. In March and April, however, Canadian export prices fell sharply, owing to serious curtailment of orders from the United States and to parallel weakness in the Canadian market. Almost at once British Columbian prices reached parity with European quotations and, as northern European prices advanced still further until they approached prerecession levels, the Canadian exporters found many eager buyers in Britain and Europe. The price trends discussed above are clearly visible in Table 9.
Present indications are that sawn softwood prices will preserve a high degree of stability in 1961 but a further appreciation of values seems unlikely in view of estimates of increased availabilities and somewhat lower import requirements.
Conclusion
In the period covered by this review, most areas of the world (other than the U.S.S.R., eastern Europe and China) have experienced temporary economic difficulties followed by rapid growth and market expansion.
At the time of writing, further development is in prospect and it seems probable that effective demand for sawn softwood will be commensurate with increased supplies at the disposal of the highly industrialized countries.
Strenuous efforts to step up production in areas formerly dependent on imported supplies are noted with satisfaction, but it is no less clear that increased consumption in countries poorly endowed with coniferous forest and remote from the in main centers of production will necessitate more rapid production and more effective distribution in the years immediately ahead.
C. G. T.
