solsona pettenella et al pine markets(1) -...

!"#$%#!$&'(

&(

Market developments for pine products: actors and patterns of

trade in a changing market conditions

Davide Pettenella, Mauro Masiero, Hafiz Umair Masood Awan, Enrico Vidale

MEDPINE 5 Solsona, 22-26 September, 2014

Outline

•  Ongoing structural changes affecting the pine market economy

•  Three commercial products: – Pine nuts – Pine resin – Wood logs and sawnwood from pine

•  Conclusion

4 trends:

A.  Reduced consumption of pulp and paper

B.  Development of the bio-energy segment

C.  Growing role of forest plantations in wood supply

D.  Increasing importance (and recognition) of NWFP

… under a general feature of the market: structural instability

Ongoing structural changes affecting the pine market economy

A.  Reduced consumption of pulp and paper (EU market)

!"#$%#!$&'(

!(

Reduced consumption of newsprint (US market)

Source: Peter J.Ince, 2008

Reduced employment in the pulp and paper sectors (US market)

B. Development of the bio-energy segment

!"#$%#!$&'(

)(

Opposite views

However we do have to consider: -  The reduced demand for industrial wood -  The role of trade (import from outside EU) -  The role of prices (higher demand ! higher prices ! higher supply)

Key message: we will face a problem of scarcity

http://www.forthenergy.co.uk/biomass.asp

1300 M! investment 300 MWe + 260 MWt 40 new jobs (32.5 M!/employee) Consumption: 5.3 M ton biomass/yr 90% imported (75% from Florida)

Market distortion by public interventions. An interesting example

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

MX=YZZ44;;A-3=;6.A41:Z44;;Z!$&'Z$)Z$IZ4;,;3>+C;Z&)%')$$"!"[&")\&$AM,:3(

Unfair competition between the bioenergy and the panel industry sectors

!"#$%#!$&'(

'(

The “cascade approach” (2013 EU Forest Strategy communication, p. 5-6)

Fonte: FAO State of the World’s Forests 2007

"  230 M ha in 2005 "  75% for production, 25% for protection "  mainly conifers: 32% gen. Pinus; Eucaliptus 8%

Planted forests in the world according to management objectives and continent (1990 – 2000 - 2005)

C. Growing role of plantations

Pine plantations around the globe: main functions

Source: own elaboration on http://www.fao.org/forestry/plantedforests/67507/en/

Age-classes of pine plantations around the globe: quite a lot of young stands


!"#$%#!$&'(

"(

Productive pine plantations by age class and geographical distribution: a great potential in NA


Total consumption

Wood from plantations

Forecast of industrial roundwood consumption from forest plantations (Source: FAO)

Global forest regions and expected IRRs* from forest investments * Internal Rate of Return

Historical sources of return from forest plantations

Source: Daos Oy, 2012

!"#$%#!$&'(

\(

Forests as an opportunity for investments: land prices


Forests as an opportunity for investments: wood prices


“…From Chile to Portugal, from Brazil to Indonesia, from Uruguay to Spain, from South Africa to New Zealand, from India to Thailand, people are organizing to oppose what they have called tree deserts, green cancer, green invading army, selfish trees or socioeconomic deserts…” (www.wrm.org.uy)

D. Increasing importance of NWFP Wood vs. NWFP: general trade overview (raw prod.)

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1

0

5

10

15

20

25

30

1988

19

89 19

90 19

91 19

92 19

93 19

94 19

95 19

96 19

97 19

98 19

99 20

00 20

01 20

02 20

03 20

04 20

05 20

06 20

07 20

08 20

09 20

10 20

11 20

12

Bill

ion

US$

Wild NWFP/Wood % Firewood + Timber Wild NWFP

Wood codes: 4401, 4403 NWFP: only wild raw products collected in EU

!"#$%#!$&'(

N(

The problem of NWFP definition

0

5

10

15

20

25

30

35

1988

19

89

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

20

11

2012

Bill

ion

US$

NWFP (all) Mixed source Wild NWFP

Different definitions, different outputs!

NWFP/industrial wood production values in different EU countries

$]( !$]( '$]( \$]( I$]( &$$]( &!$]( &'$]( &\$](

U>30;56;(

Q317;^6;(

Q_-2-+(

`6+3;+2(

a6,M>;+6;(

Q317-+6;(

b>.,56;(

JO-4M(c-=>9364(

L-5:;+C(

*+6,-2(d6+021:(

Q=;6+(

?15,>0;3(

<,;3C(

Source: Forest Europe 2011, modif. (year 2007)

NTFPs (1/2)

Total value: !822.44 M Average marginal value: !18.10/ha

0% 20% 40% 60% 80% 100%

Lebanon Italy

Spain Morocco*

Bosnia and Herzegovina Cyprus

Slovenia Tunisia

Egypt France Algeria Croatia Albania Turkey

SM EM

NEM NWM

Total Mediterranean

ROUNDWOOD NTFPs

% incidence of wood & NTFP production value in MED countries and sub-regions

Source: own elaboration from FAO, 2010

Relative incidence of NTFP types on the total economic value of NTFPs in the Med region

Acorns and nuts

26,7%

Animal products 24,8%

Mushrooms and truffles 15,1%

Cork 13,8%

Honey 12,2%

Seeds 3,0%

Herbs 2,3%

Fruits 0,6%

Fodder and hay

0,0%

Other 1,5%

FAO FRA 2010 figures date back to 2005, cover just 14 out 21 countries, and do not refer to all products (e.g. Argan oil in Morocco, pine seeds partially reported, cork unclearly classified…)

A general feature of the market: structural instability A good indicator: wood prices


-45%

!"#$%#!$&'(

I(

Instability not only in the demand (economic crisis) but also in the supply.

Schelhaas, 2008

Main large damage event (storms, fires, insect attacks, …) to (ageing) European forests

Mountain Pine Beetle (Dendroctonus ponderosae) in British Columbia (CAN)

Market more unstable

Schelhaas, 2008 Forests more

vulnerable

!"#$%#!$&'(

%(

A brief market analysis of the main pine products NWFP Wood products Pine nuts

Resin - Rosin and resin acids - Salts of rosin

Roundwood -  Scots pine

sawlogs -  Other Scots pine

industrial rough wood

-  Industrial rough wood of other pine species

Sawnwood -  Scots pine sawnwood -  Planed sawnwood of

other pine species -  Scots pine small

sawnwood -  Other sawnwood of

other pine species

Our main sources: - value of production: a new estimate of Med forest TEV - trada data: EUROSTAT (2014)

Value of the production of pine nuts and resin (Med area)

Pine nuts Pine resin

Production (tons)

Value (M !)

16,545 48.7

5,295 83.8

18,992 307.7

Data source

FAO FRA 2010

Alternative Min

Alternative Max

Production (tons)

Value (M !)

1,705 0.9

8,343 2.6

9,821 3.2

Production (tons)

Value (M !)

101,428 163.3

142,300 142.3

142,300 327.3 Perez et al., 2004; NFC, 2005 and 2012; Mutke et al., 2012

and 2013; Sfeir, 2011; Daly et al., 2012; GDF, 2009.

IGN, 2013; Spanos et al., 2010; NFC, 2007; Cesefor, 2009;

Magrama, 2011; GDF, 2009; Satil et al., 2011.

Cork

APCOR, 2010; Daly et al., 2012.

Still minor products, in relation to other MED NWFP

Pine nuts Pine nuts production and gathering in “Mediterranean” countries (sorry Portuguese friends!)

nr = not relevant; na =not available * estimated assuming production levels per hectare as defined by Daly et al. (2012) for Tunisia. Source: own elaboration from aPerez et al., 2004; bNFC, 2005; cINC, 2012; dMutke et al., 2012; eSfeir, 2011 [Note: production figures refer to 2005 and assume an average production of 300-320 kg/ha of edible nuts]; fWahid et al., 2010; gMutke et al., 2013; hDaly et al., 2012 [Note: production figures assume an average production of 400 kg/ha of cones, i.e. 60-100 kg/ha of edible nuts]; iGDF, 2009.

!"#$%#!$&'(

&$(

Pine nuts trade: a central role of the EU

Source: our elaboration on EUROSTAT data

Pine nuts: increasing EU dependence from other countries (China, Pakistan, US, …)


Pine nut prices: huge tensions Driving forces: -  many pathogens such as the western conifer

seed bug (Leptoglossus occidentalis); production in the Med region has fallen from 2,500 to 905 tons in 2011 (INC, 2012)

-  Pine Mouth Syndrome (PMS): nuts from some species such as Pinus armandii (Chinese white pine) and Pinus massoniana (Chinese red pine) include irritating terpenoids and other compounds

http://espresso.repubblica.it/food/dettaglio/pinoli-boom-di-furti/2203174

Max: 65 !/kg (consumer price)

Price boom, with a recent reduction of trade


!"#$%#!$&'(

&&(

Pine resins Areas and species used to pine resin extraction in Mediterranean countries

* tapping activities ceased Source: own elaboration from aFAO,1995; bIGN, 2013; cSpanos et al., 2010; dINFC, 2007; eCesefor, 2009; fMagrama, 2011; gGDF, 2009 [Note: calculated according to average figures for production forests and considering only non degraded pine forests]; hSatil et al., 2011.

Pine resin production value (1,000 Euro) in Med countries The 7 top exporter

in the world (2013)


The 7 top importer in the EU (2013)

!"#$%#!$&'(

&!(

Rosin and resin acids: strong trade unbalance, but recent reduction in import from outside EU (China, Brazil and Argentina, Indonesia and Vietnam)


Salt of rosin: again the impacts of the economic crisis on trade


Average price changes during 2010-2013 for rosin and resin acids


0

500

1000

1500

2000

2500

3000

750000000

760000000

770000000

780000000

790000000

800000000

810000000

820000000

2010 2011 2012 2013

Ave

rage

Uni

t Pri

ce

Ave

rage

Qua

ntity

Years

Average Quantity (Kg)

Average unit price (!/Kg)

Pine wood

!"#$%#!$&'(

&)(

Quantity and value of Med pine wood production: no data available (but pines are the predominant species!)

Roundwood production value in Mediterranean countries (1990, 2000, 2005, 2010)

•  Leading countries: France, Turkey, Spain, Italy, Croatia;

•  Only Turkey has a clear trend (positive), much influencing the overall performance of the region

•  Still a large role played by fuelwood

… still a large role played by fuelwood

Overall fuel wood increased five times in the last 10 years

According to FAO (2012), the Mediterranean region hosts the 1st (Italy) and the 4th (Turkey) firewood importers worldwide.

fuelwood

timber

Trade balance Scots pine (EU, value, 2002-13) Industrial roundwood (= timber)

Sawnwood

•  Large investment in sawmills in the recent past ! increased avrg. size

•  Need for large amount of logs to cover the investment costs

•  High prices paid for the raw material

•  Stagnant domestic demand, increased export of sawnwood, lower profits for the sawmill

The reduced role of small sawmills is decreasing the stability of markets.

Trade balance other pines (EU, value, 2002-13) Industrial roundwood (= timber)

Sawnwood Same trends! (even more pronounced)

!"#$%#!$&'(

&'(

Summary view: EU pine products imports

Red: industrial pine roundwood Green: semi-finished pine wood products Blue = NWFP

Summary view: EU pine products exports

Red: industrial pine roundwood Green: semi-finished pine wood products Blue = NWFP

Conclusion •  More globalized wood and NWFP

markets •  Increased demand for low grade

wood assortments •  A very dynamic NWFP market, with

new room for expanding EU supply •  Economic crisis: limited reduction in

NWFP trade, but not in prices

•  Other products (mushrooms, greeneries, …) and ES can be relevant sources of income for pine forests Thanks for your attention!

solsona pettenella et al pine markets(1) -...

Documents