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Wood Exports to China Increasing

By 250 News

Wednesday, October 29, 2008 03:58 AM


Prince George, B.C.- Some encouraging news from Minister of Forests and Range, Pat Bell who says there has been an increase in the  amount of lumber  B.C. is exporting to  China.

The latest trade statistics indicate softwood exports to China will set a new record in 2008.   The information from January to August 2008 show the province has already exported 689,576 cubic metres of softwood products to China,
just shy of the record 727,750 cubic metres exported in all of 2007.  Still, the numbers are a fraction of the amount  we used to export to the U.S.  ( about 8 billion board feet) 

"Our long-term objective and main focus is encouraging China to adopt North American wood frame construction in ways that fit the unique mix of housing styles in China," said Bell. "China is the second-largest wood import market in the world and represents the fastest-growing market for B.C. wood products."

China had been importing wood from Russia, but with Russia's new tax on all log exports and limited alternate sources of logs, Chinese demand for imported softwood lumber has increased and  has a potential for growth.

"The collapse of the U.S. housing market has emphasized the critical importance of diversifying our markets," said Council of Forest Industries president John Allan. "We appreciate the effort the government has made in developing the Chinese market, and look forward to working collectively to grow our business there."

Bell and more than a dozen industry representatives  will be  heading  to China Nov. 12-18  on a trade mission.

 


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Comments

I interpret hamburger Patties blather as the chinese can buy our 'wood products' cheaper, so they do. If the russkies lower the selling price, taxes, whatever, then they will get the sales. I wonder if Russia is foolish enough to sell whole logs to other countries like we do.
Earth to Pattie; selling whole logs to foreign countries (yes yankees included) is taking tax dollars out of your beloved coffers. I know that we sell more lumber than whole logs, but my point is that we should not sell any whole logs. If they need our wood, they can pay for the finished product.
metalman.
If we stop selling whole logs that would mean the loggers could stay at home and watch TV.

Or if the loggers want to still do some logging they could learn to carve the logs into those cute chain saw bears posts before selling the logs. Loggers turned artists - who would have thought. Lets see Russia beat that!
Comparing us to Russia in regards to log exports isn't exactly fair, they have a huge problem with illegal logging, which I believe their new export taxes are aiming to cut down on (i.e. not for appurtenancy). Our raw log exports will never match wood product exports, so I don't think we have anything to worry about in that regard. It's a small part of the economy, and it's not going away.
The cubic metres exported last year to China is just over 0.3 billion board feet which makes the fraction of the US market at one time as 4%.

Chinese, and hopefully other markets, are slowly going up while US is quickly going down. A return to recent gluts being sent there will likely not be seen again for a decade or more, if ever.

Things change. Keep pushing the products in other parts of the world. Keep adjusting the products to suit the market to maximize sales. Keep your heads out of the sand to keep this region, and others accross Canada, producing and selling.

Russia is trying to stop its high grading of logs by foreign operations (Asian) on their soil. Not sure how well that is working.
This is the same song and dance we were fed 30 or more years ago, when sales to the USA were down. We were sending people to Japan to convince the Japanese to change their building codes so that we could sell them lumber and therefore not be so reliant on the good old USA. Not sure how well this all worked out, or how much lumber we actually sell to Japan,however it now appears China is our new darling and saving grace. Dont hold your breath.

The US Market has been the mainstay of Canadian lumber producers for the past 60 to 70 years, and will continue to be so. Once the price for lumber rises in the US we will sell all our production to them to make the big bucks. If China does not want to pay the US rate then they wont get the lumber.

We used to sell lumber into the UK and some other Commonwealth/European Countries, however these sales fell off with the establishment of the European Common Market. There are approaches being made to start to resell into these areas, which would be a good thing.

There is no doubt we need alternative areas to sell into, but once the Americans start to pay the big bucks, they get the lumber, pulp and paper, beef, etc;.
When raw logs are exported they are milled in another country. If they were not exported, then there could not be any milling of them done. If there were fewer logs milled then there would be a shortage of lumber. If therer were a shortage of lumber, then more lumber would be cut in BC. To make more dimensional lumber, more logs would be need by the mills. Loggers would cut those trees down.

In other words, the fallers would still be employed falling logs, but the employment would go to BC mill workers.

The "loggers would be unemployed if there were no log exports" argument is a bunch of nonsense.
Thanks for pointing out the whole circle of how our decisions affect everything. Raw log exports ultimately hurt everyone !
I like the way you think, ammonra.
metalman.
"In other words, the fallers would still be employed falling logs, but the employment would go to BC mill workers"

The mills would only process them if they had a market, meaning that they could produce the desired goods at a low enough price to sell to the end customer (in this case China).

One then has to question whether the cost structure in BC mills (wages, overhead, taxes, etc.) is at the point it needs to be in order to successfully price products for sale into the Chinese market. I haven't a clue if BC mills are in that position, but I'd guess that they aren't given the fact that we've been unable to break into that market with our finished goods. I'd also be willing to bet my entire life savings that the cost to produce the goods in China is SIGNIFICANTLY lower than in BC, which raises the question, why would they buy from here if they could produce it cheaper there?

Then of course there is always the fact that if the price isn't where it needs to be, perhaps they decide to not utilize lumber at all (which means ANY benefit from selling to China vanishes . . including log exports).

I agree fully that shipping the raw logs offshore is not ideal, but the analysis is not as simple as it would initially appear to be, especially when you consider that they've been able to survive and build magnificent structures for thousands of years without BC lumber :)
The Chinese do not have the same reverence for wooden structures that exists in Japan. The Chinese like brick and concrete construction, which they consider to be more permanent. Wooden houses are not highly regarded in their culture, nor are the people there who (have to) live in them. They are considerd very low class, unable to afford anything any better than a wooden box to live in.

The Chinese use of wood in house construction is primarily for heavy beams, and second floor joists, and rafters (to hold up clay tile roofing), and not the kind of material we're going to cut out of northern Interior bug killed lodgepole pine. That wood would likely end up in crating, pallets, low-end furniture.

There have been some inroads made over the last thirty-five years or so in introducing Canadian platform frame, stud-wall construction methods into Japan. But most Japanese still prefer their traditional post and beam construction methods, where the wood is often exposed and the joinery is mortise and tenon held together with wooden keys instead of nails.

Status, or 'face', is very important in Japan, and the more obviously high grade and expensive the exposed wood members of one's house frame is, the higher up the social scale that family is seen to be. Things like that that we here would consider silly hold great importance in Japanese culture. (Like General Douglas MacArthur noted after the war, when appointed the Allied overlord of Japan during the occupation years, it was like dealing with a nation of 14 year olds.)

One thing to consider before banning ALL log exports is that in times past both here and in the US log exports have often led to increased future lumber sales.

Just as it is logistically impossible for any mill here to cut the myriad of different lumber sizes used in a traditional Japanese post and beam home (there can be up to 1,200 of them, I've heard), and get that lumber from here to where it's needed on any kind of a timely basis, so too is if far more costly to ship logs trans-Pacific than it is to ship sawn lumber.
If the costs of producing lumber in China are "signifigantly" lower than here, it's quite likely largely because the Chinese have 'externalised' a lot of costs our plants are subject to here.

They do not have to meet the same environmental or safety standards our plants are ever increasingly subjected to, for instance.

On a straight productivity-per-man-hour basis, I would bet that the vast majority of our sawmills here are far more efficient than their mills there are.

Probably equally, if not more important, both China and Japan have historically been notorious for using 'national credit' to subsidise their own industries in 'targeting' certain export markets they wish to capture.

This allows those industries to sell abroad below their actual costs of production, with the government making up the difference necessary to maintain a suitable profit through a PRODUCER's "subsidy".

Both countries have long had a perceived 'national' necessity to accumulate foreign exchange (primarily US dollars, now, (still), but formerly gold bullion.)

They both operate under systems (still) that view the "State" as more important than the "individuals" that comprise it.

Economically, what this really does is to enslave their populations to endless 'work', while impoverishing the countries receiving their exports (through loss of employment in local industries which can't compete with them.)

This policy is the exact reverse of the original ideas of 'Social Credit', which would have used 'national credit' to provide a CONSUMER's "subsidy" to lower the retail price of domestically produced
goods below their costs of production so that they could be consumed nationally "up to the limits of actual capacity to produce, or satiation of real demand for them, whichever comes first." Something which, now, they can NEVER be.

Before World War Two, the Japanese 'captured' many international markets, (such as the one for rayon, for instance), in the Depression-weary Western countries.

So much so that most of their intended victims increased tariffs on Japanese goods entering their markets. It was largely ineffective, the Japanese just subsidised further and negated the tariff, necessitating an outright ban on many Japanese goods coming in. One of the triggers which caused the war. Lets hope history doesn't repeat itself with China as a future adversary.
Keep the logs rolling- great to here more exports. Raw logs taste good.