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Basic Information |
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PRICES OF WOOD PRODUCTS EXPLODE
– DEMAND FOR MORE WOOD LOGGING
by Dirk-Uwe Klaas,
CEO of the head association of the German woodworking industries
About 3.4 billion cubic meters of wood store in Germany's forests as available stock which is more than in any other European country. One third of Germany's surface is covered with forest containing approximately 35 billion trees at present. Each year, the trees growing up count 30 percent more than the trees being harvested. So much for the official facts stated in the latest federal inventory published by the German forest authorities.
So everything seems to be all right at first sight. But there is a hard struggle for the heavily demanded raw material that reflects noticeably in the current prices. On average and over all types of application the prices of wood went off by approximately 30 percent in the last 12 months, showing a stronger progression than oil and gas. Additionally, the demand for wood as solid fuel rises. Approximately 21 million cubic meters of wood have been burned in fireplaces in 2005 - with clearly rising tendency. Approximately 70.000 pellet ovens need additional feed. On top of this, there is a rising domestic demand for industrial timber and an increasing export.
These factors all together are pulling the prices upward. A part of the wood supply is not available because of its utilization as fuel, automatically increasing the utilization as material for industrial use. The consequences of this can be seen in all segments of the woodworking industry: The prices of chipboard for the furniture industry rose by 20 -30 percent within 12 months. Construction lumber went up in price by 25 percent as well, and oak for the manufacturing of parquet is difficult to get and has become 35 percent more expensive than one year ago. In the packing segment, the first bottlenecks do appear since the raw material for wooden stillages went up in price by approximately 30 percent and the wood for boxes increased by 25 percent in 2006.
An additional wood supply is urgently – in fact, immediately - required by the market. So the German woodworking industries demand the following measures: The fragmented private forest owners must join together to economically meaningful sizes and must quickly develop cultivation patterns in direct cooperation with the consumers of their wood. In the state-forest, measures have to be taken too, even if logging has already been increased here. The regional forest organisations must concentrate on marketable products and must act more flexible. For example, a period of 140 years until harvesting of a common spruce is not marketable because there is only a weak demand for trees of this size. Moreover, subsidy for wooden pellets as biofuel should not be granted any more since it is already usual.
These measures should contribute to cooling down the currently overheated situation in the wood market. They are not intended to replace the forest policy based on the principle of sustainability. But maybe they can help to adjust it moderately towards the needs of the buyers’ side. In fact, there is plenty of wood in Germany’s forests. Using it more meaningful would slow down the price increase and stabilize the situation of the woodworking industries - including its nearly 200.000 jobs - in the international competition. For the consumers, furniture and other wooden products will become more expensive in any case. The increase of the prices can be restricted only when additional wood supply will soon find its way into the market.
more basic information
The German Furniture Industry in a Global Context
Development of the German Furniture Industry
Interior Design Trends
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