Global shipments of wood chips fell 14% in 2009, although China bucked the trend, tripling its imports to become the world’s second largest chip importer

April 22, 2010 - As with most commodities, global trade of wood chips fell in 2009 because of the international financial crises, according to Wood Resources International's (WRI) report, Wood Resource Quarterly.

Wood chip trade had increased on average five percent per year annually between 2002 and 2008, reaching an all-time high of 31 million oven-dry metric tons (odmt) in 2008. This upward trend was broken last year when trade fell 14% from the previous year, noted Hakan Ekstrom of WRI.

"International trade of wood chips has historically been driven by pulp manufacturers need for either unique wood fiber properties not available locally, for fiber competitively priced or for strategic reasons. Despite the recent decline, global trade of wood chips has more than doubled in 20 years," Ekstrom said.

The report said that the trade reduction in 2009 was equal for both softwood and hardwood chips, and most countries cut back fiber imports. The only major exceptions were Turkey, which increased its imports by 50% last year and China, which almost tripled its imports.

"China has evolved from having been a net exporter of chips five years ago, to being a major chip consumer," Ekstrom said. "The country now imports almost 20% of all chips traded in the Pacific Rim and is now the world’s second largest importer of woodchips after Japan."

Trade of wood chips is still the highest in the Pacific Rim, accounting for about 55% of the total global trade and over 95% of water-born trade. The major exporting countries in 2009 were Australia, Chile, the US, Vietnam and South Africa, which together exported just over 16 million odmt. A majority of the shipments were Eucalyptus wood chips destined for pulp mills in Japan and China, WRI's report said.

The most dramatic reductions in export volumes last year occurred in Australia (-22%), the US (-25%, a majority bound for Canada) and South Africa (-45%), according to the WRQ. In contrast, Vietnam and Russia both increased their shipments last year. Outside of the top five it is worth noting that shipments from Uruguay declined by almost 50% last year.

The report predicts trade of wood raw-material, including logs and wood chips, is likely to increase in 2010 as the global economy slowly recovers and as a consequence, the demand for most forest products will improve. In addition, many energy companies in Europe are searching for new sources of biomass, which will further expand the overseas trade of wood chips.

SOURCE: Wood Resources International LLC