The demand for China’s tropical timber had introduced in the article Analysis of The Demand And Consumption Of China’s Tropical Timber By 2010 in the previous issue. The main factors affecting the consumption of China’s tropical timber are as below in details.

①Supply capacity of international market

Chinese timber market still has huge potential in future needs of tropical timber because the manufacturing industry of global wood products congregate toward China continuously and the export trade of China’s wood products has been developing rapidly in recent years. However global tropical forest resources are still continuously reducing, especially in some Asian countries with abundant tropical forest resources such as Indonesia, Malaysia and Myanmar, the annual reduction rates of their forest area are all over 1 percent. African tropical forest resources are also reducing at an annual rate of 0.8 percent. Brazil with the largest area of tropical forest is reducing at a rate of 2.31 million hectares. Viewed from timber supply capacity, the exports of global tropical commercial timber (logs) during 2000 to 2004 had reduced to 14.43 million m3 from 17.69 million m3, down by 18.4 percent. Of the total, the exports of tropical timber from Indonesia and Malaysia fell 42.4 percent and 23.1 percent respectively. The exports of tropical timber from African and South American countries had also reduced 32.1 percent and 29.4 percent respectively. In view of the above analysis, the trend which the supply capacity of global tropical timber is gradually reducing year by year will not be reversed in the near future. Therefore, the main factor that effecting China’s tropical timber consumption is not demand, but lies on the supply capacity of international market.

②Market price

According to FAO statistics, the average CIF of global tropical commercial logs during 2000 to 2004 has ascended to $212.5 per m3 from $172.4 per m3, up 23.3 percent. China’s imported tropical commercial logs also rose to $186.3 per m3 from $162.4 per m3, up 14.7 percent. But, at the same time, the import price for global hardwood commercial logs rose to only $127.8 per m3 from $114.5 per m3, up only 11.6 percent. In the corresponding period, the average prices of exported temperate hardwood commercial timber in Russia, the United States, Germany and European regions increased by 38.5 percent, 18.8 percent, 26.1 percent and 6.5 percent respectively. The growth rate of export prices for Russian hardwood timber was fast but its unit price is considerably low (only $46.8 per m3 in 2004) due to species difference (mostly birch), making up of 25 percent of the price for American timber and 40 percent of the price for German timber respectively. Obviously, tropical timber will undoubtedly be partially replaced by temperate timber in end-use (such as plywood, solid furniture and solid flooring) if the growth rate of the prices for tropical commercial timber continue to greatly surpass that of the prices for temperate hardwood timber.

③Domestic tropical timber production

The output of China’s tropical timber shows an increasing trend year by year due to rapid development of China’s fast growing and high yielding plantation bases in the last few years, up 29.4 percent during 2002 to 2005. it is estimated that the output of China’s tropical timber (including rubber wood) will continue to grow in tandem with the rapid development of fast growing and high yielding plantation bases in Hainan, Guangdong, Guangxi and Yunnan,. However, almost all China’s tropical timber come from plantation with small diameter and limited species (feature Eucalyptus) which are mainly suitable for paper making and non-veneer wood-based-panel (fiberboard and particleboard) making and cannot be satisfied the need of manufacturing high grade solid furniture, solid flooring and plywood. According to our survey, the manufacturers now could use small diameter eucalyptus timber to produce plywood used for concrete-form due to the improvement of processing technology and equipment but the quality remains to be improved, and the volume is still limited. According to the above-mentioned analysis, the demand for tropical timber on China’s market still lies on the supply of international market in a very long period.

④Adjustment of national policies

A series of concrete measures related to national macro-policies will undoubtedly affect China’s future consumption of tropical timber in order to realize sustainable economic development. For example, China has strictly controlled investment scale in real estate and infrastructure construction and increased lending rates in order to restrain economic overheat. China has adjusted past policy of rewarding export and restraining import, has increased export taxes or reduced export tax rebate rates of high energy consumption, high pollution and resource products in order to restrain excessive growth of favorable balance. China has collected consumption taxes in order to limit over-consumption of resources products (such as solid flooring, wooden chopsticks). China encourages forest enterprises with real strength to invest overseas in order to realize double win and mutually favorable trade. All above polices will affect greatly China’s future import and consumption of tropical timber.