Forest product exports from the U.S. evaluated
With the assistance of forest
products trade associations, university research centers, the
South Carolina Export Consortium (SCEC) and federal/international
forest products agencies, an overall market study of current forest
products trade between the U.S. and its major trading partners,
focusing on export data was conducted.
Trade data was compiled using
various private and public resources including the Foreign Agricultural
Service, the Global Trade Atlas, and the Center for International
Trade in Forest Products. Product classifications were made using
the Schedule B Harmonized System codes on record with the U.S.
Department of Census. These classifications were cross-referenced
with statistical data provided by the Foreign Agricultural Service’s
Forest and Fishery Products Division which actively tracks the
flow of forest products yearly. In it’s review and analysis
of U.S. export activity in the forest products industry, the SCEC
analyzed export activity for primary and secondary forest products,
including wood-based furniture, where applicable.
The general U.S. export overview
looked at macro trends in the export of forest products to the
world; identifying top markets for U.S. forest products, identifying
top commodities/categories of forest products exports, reporting
of general trends in the export activity over the five year period
The South Carolina overview followed
the same format with top markets identified, South Carolina’s
ranking among other exporting states, and top commodities exported
to the world via South Carolina. Upon identifying top markets
for both the U.S. and South Carolina, the SCEC analyzed, in detail,
current import and export trends within each top market.
The country market profiles detailed
general trends and changes in the demand and supply chain for
the top trading partners of the U.S. in the world. Countries profiled
under this analysis were: Canada, Japan, Mexico, China, Spain,
Italy, United Kingdom, Germany, Hong Kong, and South Korea. These
markets represented the top ten markets for forest products exports
from the U.S.
U.S. exports of forest products reached $6.14 billion
in 2003, making it one of the largest exporters of forest products
in the world. The results of the study showed that, although the
U.S. is currently the world’s fifth largest exporter, exports
of forestry products to the world have been on the decline through
the study period of 1999-2003. Diminished market share for the
U.S. has come at the hands of emerging global forest products
leaders such as Russia, Brazil, and China. Also, based on a country
analysis, specific markets such as the European Union (EU) are
now sourcing more products from within their regional market,
and with the newly ascended Central and Eastern European countries
entering the market, U.S. exports to the region will continue
to decline as cheap imports from the CEE countries flood the market.
However, the U.S, with its own
preferential trading agreement (NAFTA), is trading the majority
of its products with Mexico and Canada. The U.S. has continued
to see growth in each market over the period, but more importantly,
product expansion and diversification.
Based on a regional analysis,
top regions for U.S. exports were North America and the Asian-Pacific
region, with European markets playing a secondary (and declining)
role in exports. The U.S. saw significant export declines to most
of the top ten markets, save Canada, Mexico, Hong Kong, and China.
The most notable exception to this trend was China, where U.S.
exports grew over 320% from 1999 to 2003. China is thought by
many experts to be the next high volume export market for the
U.S. The trend suggests that China’s juggernaut pace of
importing will continue. Gains were made in almost all major primary
and secondary categories, with raw materials such as logs and
lumber accounting for the bulk of both Chinese imports and U.S.
South Carolina Results
Although data availability was limited at the state-level,
South Carolina appeared to show marked expansion in its exports
of forest products to the world, with increases over the period
of 33%. South Carolina exported an estimated $67 million worth
of primary and secondary products to the world in 2003. However,
South Carolina is a minor exporter of forest products when compared
to other states such as Washington, California, Oregon, or New
York; being ranked as only the 25th largest exporting state for
Top markets for South Carolina
exports were Japan, Canada, China, and the United Kingdom. These
four markets represented nearly half (45%) of all demand for South
Carolina-based products. Some emerging growth markets that saw
significant increases in SC-based forest products were Hong Kong,
Taiwan, Portugal, Mexico, Australia, and Malaysia. South Carolina
exports to major markets showed a very different trend as compared
to the U.S., with significant gains made in 8 of the top 15 markets.
South Carolina exports to China have grown over 3,000% since 1999,
and a strong trade relationship with other Asian markets was also
present in the market research. Mexico was another strong market
for South Carolina, although at much lower volumes.
Major commodities exported via
South Carolina included: lumber, builders’ carpentry, furniture,
packing material, and logs. By far, South Carolina exports are
defined by primary product exports, with primary exports accounting
for nearly 70% of all products exported. The most exported product
via South Carolina is hardwood lumber, constituting 49.6% of all
exports from the state. Lumber products were also the largest
category for nearly every market analyzed in this report.
While U.S. market share continues to erode on an international
basis there are several strategic moves the forestry industry
can make to position itself to be the dominant supplier where
the growth is occurring. While each market had slightly different
export profiles, an overwhelming conclusion can be drawn. China
and other Asian markets represent the largest potential growth
for forestry products exports from the U.S.
Exports to the region support
this theory with either significant gains made or lower comparative
losses in markets where competitor exports declined. Heavy reliance
on foreign supplies of forest products are attributed to underdeveloped
forestry industries, strict policies enforcing forest removal,
strong and sustained economic growth fueling construction and
housing development, and production geared to value-added wood
products that require immense sources of raw materials.
In Europe, continued economic
expansion of the EU, a harmonizing of standards, and entrance
of partner countries with lower production costs for wood will
continue to erode U.S. market share. U.S. companies seeking growth
in the European market must compete with value-added products
that fill niche consumer requirements. Continued and active marketing
influence from major U.S. trade associations will continue to
reshape the construction and housing sectors in these countries,
but must convey a value proposition for U.S. forestry products.
Several global issues that will come into play for U.S. prospects
will be changing regulations regarding illegal timber trade, packaging/labeling
of products, and sustainable wood initiatives. While global collaboration
is under way to address many of these problems, U.S. firms must
position themselves to take advantage of a changing demand landscape
for wood products.
The full text of this report
and other studies performed under contract with the South Carolina
Forestry Commission are at www.state.sc.us/forest/prod.htm.