THE INTERNATIONAL TROPICAL TIMBER ORGANIZATION Global Outlook for the Tropical Timber Trade and Furniture Export Markets Where are the Emerging Markets?
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THE INTERNATIONAL TROPICAL TIMBER ORGANIZATION Global Outlook for the Tropical Timber Trade and Furniture Export Markets Where are the Emerging Markets? Trends in Tropical Timber Exports 14.00 Value (Billions USD) 12.00 10.00 8.00 6.00 4.00 2.00 0.00 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Primary Secondary World Roundwood Production millions cubic metres 1900 1700 1500 1300 1100 900 700 500 Fuelwood and Charcoal Industrial Roundwood 1999 1998 1997 1996 Developing Country Roundwood Production millions cubic metres 1600 1400 1200 1000 800 600 400 200 0 1999 1997 1996 1995 Industrial Roundwood Fuelwood and Charcoal million cubic metres RWE 300 250 Tropical 24% 200 150 Non-Tropical 100 50 1993 1994 1995 1996 1997 1998 1999 Composition of Exports By Region 60 Asia Pacific Latin America Africa 50 40 30 20 10 0 Logs Sawnwood Veneer Plywood Imports of Tropical Timber 1996-2000 000's cubic m etres 25000 20000 15000 10000 5000 0 1996 1997 Japan 1998 EU 15 1999 China 2000 Japan's Tropical and Non-tropical Timber Imports 40,000 RWE Thousands 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1993 1994 1995 Tropical 1996 1997 1998 Non-tropical 1999 2000 China's Tropical and Non-tropical Timber Imports RWE Thousands 12,000 10,000 8,000 6,000 4,000 2,000 0 1993 1994 1995 Tropical 1996 1997 Non-tropical 1998 1999 2000 Exports of Tropical Added Value Wood Products by ITTO Producers 4.5 4 3.5 3 Billions 2.5 USD 2 Latin America and Caribbean 1.5 Asia-Pacific 1 0.5 0 1990 1992 1994 1996 1998 estimated 2000 Exports of Tropical Added Value Products 4.5 4 3.5 3 Billions 2.5 USD 2 Profiled Wood Joinery Furniture 1.5 1 0.5 0 1990 1992 1994 1996 1998 estimate 2000 Tropical Asian Exports by Furniture Type (ITTO Members) 2.50 2.00 1.50 Billion USD 1.00 0.50 0.00 1990 1992 1994 1996 1998 2000 estimate Furniture Parts Bamboo Furniture Wooden Frurniture nes Bedroom Furniture Kitchen Furniture Office Furniture Seats with wood frame World Furniture Production Other Developing Countries 13% Mexico Poland 3% 1% United States 25% Other Developed countries 18% Canada 3% UK 4% Germ any 11% France 4% Japan 9% Italy 9% Furniture Market Trends • US, Germany and Japan not expected to grow • Italy, France, UK, Brazil, Spain and Mexico to grow moderately • Only China expected to show high growth • Amongst other 40 markets • India, Chile Ireland and Malaysia in high growth group • General optimism of last year replaced by a more guarded posture • US the engine of growth for the international furniture trade - demand for imported furniture has grown • however the slowing US economy may put export trade under pressure, especially for medium-low priced furniture • producers must prepare for weaker demand in major markets • seek new niche markets, distribution systems and promotional tools • introduce market specific designs and regularly launch new ranges The Import “iceberg” • Explosion of furniture imports to the US account for 34% of all furniture sales • 29% of all furniture imports from China 1992 USD 69mil, over 2000 USD 1.8 bil. • In 10 years just a handful of US domestic manufacturers and in China • Asia Pacific main force reshaping furniture trade • China single most important country in region dynamics • Chinese market holds promise for expanding trade in added value products • house ownership encouraged • home getting bigger • imported brands favoured • reduced domestic timber supply • economy opening - WTO entry • China market not lived up to expectations • within a decade domestic production created stiff competition • Now an aggressive exporter with non tariff barriers • distribution channels, unclear customs and import licensing rules Winning Market Share • Added value exports will continue to grow at expense of primary product trade • will expand at annual rate of 8-10% • USD5 billion in 2001, USD 6.6 billion in 2003 • Win market share in OECD countries • Widening base of sustainably produced timbers • wage cost differentials and improving managerial skills • advanced technologies and targeted promotion • supportive institutions The problems with using tropical timbers No problem 5 32 Price 20 Technical problems 19 Other marketing problems Green problems 47 Availability 47 Variable weights Variable colour 13 31 Which tropical country has scored greatest success with tropical added value exports? Ghana Taiwan China Chile Brazil Indonesia Malaysia 2 1 3 2 8 18 43 and why are these countries successful? High level of technology in the country Good R&D back up 16 11 23 Good understanding of the m arket Good Investm ent clim ate 22 Skilled labour 28 25 Cheap labour Plenty of plantation resources Plenty of natural tropical tim ber resources Governm ent Policies 13 41 42 Where will be the fastest development of added value production? Taiwan EU Mexico Malaysia Vietnam Brazil US Japan China Forecast Trends in Exports of Primary and Secondary Tropical Products 14.00 Value (Billions USD) 12.00 10.00 8.00 Primary Secondary 6.00 4.00 2.00 0.00 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 estimated THE INTERNATIONAL TROPICAL TIMBER ORGANIZATION [email protected]