Timber market

Wood is the third most important commodity in the world after oil and gas!

Timber Market Boom

Timber market NCREIF Timberland - USD

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For decades, the demand for wood has been rising in line with the permanently growing world population. The timber market is booming like never before. On average, a person consumes 1.3 kilograms of wood products per day, and this value increases with growing prosperity. Whether at home, at work or in a restaurant – wood is omnipresent.

Although wood is a renewable resource, the demand can by no means be met by classic forestry. Alternative ways of producing wood outside natural forests must therefore be found. European policy has been late to recognize this. Since 2009, the cultivation of wood on agricultural land has been permitted throughout Europe. This is a long overdue step, considering how much damage could have been averted from our natural forests and from the rainforests of South America.

If we consider the renewability of wood as a resource, it quickly becomes clear that it is not possible to make short-term adjustments to supply in the face of rising demand, because there is naturally a very considerable time lag between planting and availability. What a glaring disproportion there is here is shown by the mere fact that the area of forest on earth has been declining for decades – by the area of Germany every 310 days. In total, about 130,000 km2 are deforested every year, which corresponds to an area the size of Greece.

The Food and Agriculture Organization of the United Nations (FAO) forecasts a 50% increase in China’s demand for wood by 2050. According to the Hamburg Institute of International Economics (HWWI), demand for unprocessed logs (roundwood) will double by 2030.

Putting all this information together and considering that growing prosperity in the emerging Asian economies, especially of course in China, will lead to an increase in per capita wood consumption, offers a positive outlook for the global wood market of the future.