Exporting Lumber

The decision to enter the export market requires the producer to commit sufficient managerial, economic, and financial resources to the task. Tampa International Forest Products must weigh the advantages and disadvantages of exporting to determine if projected profits, possible losses, and inherent risks justify management’s commitment to exporting.

In 2006 the United States exported $6.9 billion of solid wood products. In 2006, global imports of solid wood products imports were valued at $62.7 billion. The United States was the leading market, importing $24.2 billion of wood products, while the European Union (EU) imported $14.5 billion, and Japan imported $9.9 billion. Combined, these top three markets accounted for two-thirds of global wood product imports.

Global trade in wood products increased from $49.9 billion in 2001 to $69.9 billion in 2006. Because of a strong housing and remodeling market in the United States during this period, U.S. imports of wood products such as soft wood lumber, paneling, and builders’ carpentry increased significantly. U.S. wood imports increased $14.8 billion in 2001 to $24.2 billion in 2006, accounting for 43% of total growth in global wood imports. Similarly, demand from the EU’s housing and construction markets increased its consumption of imported products, particularly for hardwood lumber, plywood, and builders’ carpentry. EU wood imports increased from $8.9 billion in 2001 to $13.9 billion in 2006, accounting for 20% of the total growth in global wood imports. Lackluster demand from Japan’s relatively flat housing market translated to decreased demand for wood, with imports falling from $12.3 billion in 2001 to $11.5 billion in 2006.

Other important wood markets whose imports increased between 2001 and 2006 include China and Canada. Following China’s entry into the World Trade Organization, it has experienced several years of rapid industrialization. Demand from China’s furniture, paper, and construction industries has fueled import growth for raw materials, especially logs. China’s wood imports increased from $4.3 billion in 2001 to $6.3 billion in 2006. Canada’s demand for wood has been driven by its manufacturing industry, which utilizes hardwood lumber, molding and fiberboard to produce doors, windows, and furniture, much of which has been exported to the United States. Canada’s wood imports increased from $1.9 billion in 2001 to $3.0 billion in 2006, accounting for 5% of total growth in global wood imports.

A genuine commitment to exporting begins with a long-term attitude towards overseas markets. To be successful, Tampa International Forest Products must create and follow a foreign market strategy that is integral to our overall business plan. Developing longstanding working relationships with foreign importers will require maintaining commitments to them even when their markets