The situation in Europe. — In 1976, an estimated 

 11.2 billion cubic feet of industrial wood — about a 

 quarter of world production — was consumed in 

 Europe, excluding the Soviet Union. Projections of 

 the Food and Agriculture Organization of the United 

 Nations and the Economic Commission for Europe^^ 

 indicate that this upward trend is likely to continue 

 with the expansion of European economies. Pro- 

 jected demands for industrial timber products roughly 

 double by 2000. Most growth is for pulp and paper 

 products and wood-based panels. Demands for 

 lumber are expected to increase about as rapidly as 

 population growth. 



Studies of the prospective European timber supply 

 situation indicate that timber supplies from European 

 forests could be expanded, and that significant im- 

 provements in utilization could result from increased 

 residue use and recycling of paper and paperboard. 

 However, even with the most favorable set of supply 

 and demand projections, Europe is expected to have 

 a deficit of about 10 billion cubic feet in the year 

 2000, and it might reach 14 billion cubic feet. This 

 compares with an annual deficit of 1.5 billion cubic 

 feet in the 1969-71 period. 



With respect to the United States, the European 

 outlook suggests continuing increases in European 

 demands for pulp and paper products. In the case of 

 lumber and logs, it seems likely that most of the 

 growth will be supplied by imports from the Soviet 

 Union, Canada, and the world's tropical hardwood 

 regions. 



The timber demand-supply situation in Japan. — 

 The phenomenal economic growth in Japan between 

 1950 and 1977 resulted in a sixfold increase in indus- 

 trial wood consumption to 3.5 billion cubic feet 

 roundwood equivalent. 



Although Japan is heavily forested, its timber re- 

 sources are limited in relation to population. In addi- 

 tion, Japanese forests were severely depleted by heavy 

 cutting during World War II. To meet rising 

 demands, imports of logs and other products into 

 Japan have increased rapidly, and in 1977 amounted 

 to 2.3 billion cubic feet — 66 percent of total Japanese 

 supplies. 



For many years, Japanese imports were mainly 

 tropical hardwood logs used in the manufacture of 

 plywood; since the early 1960's, imports of softwood 

 logs for the manufacture of lumber, and imports of 

 chips for pulp manufacture, have shown large in- 



2' Food and Agriculture Organization of the United Nations and 

 Economic Commission for Europe. European timber trends and 

 prospects: 1950 to 2000. Supplement 3 to Vol. XXIX of the Timber 

 Bulletin for Europe, Geneva. 308 p. 1976. 



creases. Most of the softwood log imports have origi- 

 nated in the United States and the Soviet Union. 

 Lumber imports, primarily softwoods from Canada 

 and the United States, are equal to about 10 percent 

 of the volume of imported logs. By far the largest part 

 of the pulp chip imports has come from the United 

 States. Canada and the United States also have sup- 

 plied most of the growing amounts of pulp and paper 

 imports. 



Estimates of the Japanese Forestry Agency indi- 

 cate that demand for timber products will rise to 5.2 

 billion cubic feet by 1991, some 1.7 billion cubic feet 

 above consumption in 1977. Beyond the 1980's, Jap- 

 anese forests are expected to be capable of supplying 

 an increasing share of the country's total demands, 

 but imports will remain critical in supplying the coun- 

 try's needs for timber products. In 1991, for example, 

 imports are projected to amount to 60 percent of total 

 consumption. Thus, even with successful implemen- 

 tation of domestic timber supply programs, Japan is 

 likely to continue to be a major importer of timber 

 products from North America, Siberia, and South- 

 east Asia during the next few decades. 



Future softwood log and lumber exports from the 

 United States to Japan will depend in part on the 

 level of Japanese housing starts. During the past 

 decade, housing starts in Japan have generally ranged 

 between 1.5 and 1.7 million per year — about four 

 times the average in the early 1960's. On a per capita 

 basis, current construction is about twice the rate of 

 construction in the United States. The high level of 

 construction reflects Japanese programs to upgrade 

 the housing inventory. A large part of the units built, 

 as much as two-thirds in recent years, has been to 

 replace existing units. This high replacement rate 

 cannot be continued for long and it seems likely that 

 there will be a substantial fall-off fairly early in the 

 projection period. A development of this kind would, 

 of course, reduce demands for imported softwood 

 logs and lumber. 



In the Pacific Northwest, most of the old-growth 

 timber inventory on forest industry lands and on 

 lands managed by the State of Washington, the 

 sources of nearly all softwood log exports, will have 

 been harvested by the 1990's. As these old-growth 

 stands are cut, the decline in availability of this high- 

 quality timber will tend to adversely affect the current 

 comparative advantage in the export of softwood 

 logs and lumber. At the present time, it is not clear 

 whether the Japanese would be willing to purchase 

 second-growth saw logs in the same quantities that 

 they now purchase primarily old-growth. Instead of 

 continuing to purchase saw logs from the United 

 States, Japanese importers might expand imports of 



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