In the last Unasylva review of the world plywood market (Volume 10, Number 3, 1956) a general appraisal was made of postwar development in production and trade up to 1955. 1 Since then the statistical coverage obtained by FAO has noticeably improved and data from more countries have been collected. In the following report a short review is given of the most significant developments of the period 1946 to 1957, but main emphasis is laid on the more recent developments between 1955 and 1957.
1 The revised statistical data by regions and countries on production and trade of forest products are published in FAO's World Forest Products Statistics, 1946-1955.
World production of plywood increased during the period 1946-1957 from 3.11 million cubic meters to 11.94 million cubic meters, or by almost four times. The largest volume increase took place in the U.S.A. where output rose by over 4 million cubic meters from 1.8 million cubic meters in 1946 to 6.87 million cubic meters in 1967. The largest relative increase, however, occurred in Asia (chiefly Japan) where the production of plywood in 1957 amounted to more than 10 times the 1946 output. Tables 1 and 2 show the development of production by regions and by most important producing countries.
The postwar demand for materials for building, repair, and reconstruction brought about a rapid increase in the capacity and production of plywood almost everywhere in the world, but the rate of annual growth has, in general, significantly slowed down in recent years. Table 3 shows the three-year moving average of annual growth of world and regional plywood production during the period 1946 to 1957. Several interesting features emerge from this Table.
For instance, the regularity of growth has been greatest in North America, whereas in Europe considerable fluctuations are apparent in the development. The greater sensitivity of European countries to changes in international market conditions may be the principal explanation, but in many countries the plywood industry seems to have reached the limits of both suitable raw material supplies and current demand. The recent rapid expansion of the particle board industry, combined with the already well-established and growing fibreboard industry in Europe, together represent an increasing competition for the European plywood manufacturers.
TABLE 1. - REGIONAL DISTRIBUTION OF WORLD PLYWOOD PRODUCTION
* Estimated
In the U.S.S.R., plywood output had after the war fallen to very low levels indeed. The relatively rapid rate of growth of production up to 1962 can therefore be explained by the great efforts made to recover prewar levels. This having been achieved by 1962, the course of expansion became calmer and followed a more regular and modest trend of annual growth.
In Latin America, the development of production shows a more irregular trend than in most other regions. The decline during the first three-year period was a result of the difficulties encountered by Brazilian manufacturers on export markets and reflected a certain early excess capacity. Later, however, when the domestic demand had caught up with the current production capacity and was even continuing to rise rapidly, new capacity was added to the old. In particular, the period 1950-1961 seems to have been one of rapid expansion.
But also, in this region, the rate of growth gradually slowed down towards 1966 and 1957.
In Africa, this region is not particularly important in the sense of volume, the principal period of expansion was in the years from 1961 to 1963, when production in one single year, 1962, doubled to follow the pattern of growth which was apparent in most other regions.
Asia, on the other hand, is the region where plywood production has continued to rise rapidly throughout the review period. Steadily increasing domestic demand, together with new and expanded export outlets, have made this development possible. In the Pacific area, the development of plywood production shows an unusual irregularity and does not, in any way, follow the general trends noticeable elsewhere. As the area is a relatively small importer and exporter, the explanation appears to lie in fluctuations of demand within the region.
In general, world plywood production seems to have progressed in recent years much in line with general industrial and economic activity. The gradual decline of annual expansion towards 1966 and 1967 corresponds to that of general industrial activity; there is at present marked stagnation in the latter, so that it may very well be expected that, in North America and Europe, any growth of plywood output in 1968 will be relatively small.
With regard to postwar world trade in plywood, many interesting features emerge from the data now available (Tables 4 and 6). While the volume of world trade in 1946 to 1947 was some 11 percent of total world production, this relationship appears since 1961 to have become stabilized at around 9 percent. Certain significant changes have taken place in the relative importance of the principal exporting countries. In 1946, Finland and North America alone represented about 76 percent (respectively 41 and 36 percent) of total world exports of plywood. Since then, the share of North America has fallen rapidly to around 9 percent in 1966 and 1967. Finland's share, although still significant, has also fallen heavily and was only 26 percent and 23 percent respectively in 1956 and 1967.
TABLE 2. - WORLD PRODUCTION OF PLYWOOD (in 1,000 cubic meters)
|
Region |
1946 |
1955 |
1956 |
1957 * | |
|
Europe of which: |
520 |
2 155 |
2 130 |
2 250 | |
|
|
Finland |
160 |
363 |
271 |
300 |
|
|
France |
44 |
226 |
256 |
280 |
|
|
Germany, Western |
60 |
649 |
658 |
700 |
|
|
Italy |
26 |
160 |
140 |
.. |
|
|
Portugal |
2.1 |
6.2 |
8.7 |
.. |
|
|
Spain |
27 |
48 |
56 |
.. |
|
|
United Kingdom |
36 |
64 |
49 |
60 |
|
|
Yugoslavia |
7.4 |
39 |
39 |
46 |
|
U.S.S.R. |
252 |
1 049 |
1 122 |
1 200 | |
|
North America of which: |
1 990 |
6 245 |
6 575 |
6 650 | |
|
|
Canada |
192 |
684 |
777 |
780 |
|
|
United States |
1 800 |
5 560 |
6 800 |
6 870 |
|
Latin America of which: |
145 |
350 |
360 |
370 | |
|
|
Argentina |
20 |
39 |
46 |
.. |
|
|
Brazil |
110 |
246 |
246 |
260 |
|
|
Africa |
40 |
200 |
210 |
220 |
|
Asia of which: |
105 |
870 |
1 010 |
1 130 | |
|
|
India |
15 |
55 |
55 |
60 |
|
|
Israel |
- |
21 |
21 |
27 |
|
|
Japan |
67 |
683 |
862 |
950 |
|
|
Philippines |
.. |
40 |
55 |
55 |
|
Pacific Area of which: |
60 |
125 |
115 |
120 | |
|
|
Australia |
49 |
91 |
88 |
90 |
|
|
New Zealand |
10 |
20 |
17 |
20 |
|
WORLD TOTAL |
3 110 |
10 990 |
11 520 |
11 940 | |
* Estimated
The country which has increased its exports most rapidly, both As regards a share in the world market and actual volume, is Japan. From nothing in 1946, Japanese plywood exports in 1956 amounted to 30 percent, and in 1957 to 27 percent of total world exports, and thus made that country the world's number one plywood exporter.
TABLE 4. -EXPORTS AND IMPORTS OF PLYWOOD (most important countries, share of world total)
|
Region |
1946 |
1951 |
1955 |
1956 |
1957 |
|
Percent |
|||||
|
Exports |
|||||
|
Finland |
41 |
44 |
32 |
25 |
23 |
|
North America |
35 |
7 |
8 |
9 |
9 |
|
Japan |
- |
8 |
23 |
30 |
27 |
|
U.S.S.R. |
3 |
12 |
9 |
5 |
8 |
|
Imports |
|||||
|
United Kingdom |
65 |
48 |
43 |
31 |
36 |
|
United States |
4 |
7 |
37 |
46 |
40 |
|
WORLD EXPORTS AS PERCENT OF WORLD PRODUCTION |
11 |
9 |
9 |
8 |
9 |
The U.S.S.R. which, in 1946, represented only 3 percent of total world exports, had reached 12 percent by 1951. Since then the Soviet share in plywood exports has declined somewhat and seems now to be set at a level somewhere close to the North American share.
The United Kingdom was, in 1946, by far the largest plywood importer of the world with 65 percent of total imports, but singe has gradually been declining in importance; imports in 1956 in fact represented only 31 percent and in 1957 35 percent of the world's totals. The United States, on the other hand, a small importer in 1946 with only 4 percent total imports, has gradually risen to number one country with 46 percent in 1956 and 40 percent in 1957. The growing importance of Japan as an exporter, and that of the United States as an importer, are in fact interdependent, since the largest share of Japan's exports has so far been destined to the United States. Shipping distances from Japan to other important markets, particularly in Europe, do not compare favorably with transport facilities to North America.
TABLE 5. - WORLD TRADE IN PLYWOOD (in 1,000 cubic meters)
* Estimated.
a) Included In veneers.
b) Includes veneers.
Production in 1956 and 1957
In 1956, world plywood production had risen by about 530,000 cubic meters from the 1955 level. The rise, however, was not evenly spread between all the principal producing regions or countries. Output in Europe declined slightly, while in North America and Asia it showed a noticeable increase.
The fall in Europe was primarily due to lower production in Finland where, because of less favorable export conditions particularly to the United Kingdom, output fell from 363,000 cubic meters in 1955 to as low as 271,000 cubic meters in 1956. Most other European countries, on the other hand, continued a modest upward trend in their plywood production. In 1957, the international market prospects improved somewhat and Europe's plywood production showed a further increase, discernible this time in the output of every country, but nevertheless still remained below the 1951, 1954 and 1955 levels. The relatively small increase in Finnish plywood production in that year was due to the general economic difficulties which were equally an obstacle to all Finnish exports in 1957 and which ultimately led to the devaluation of the Finnish Mark in September last. Of other European countries, the steady progress in Western Germany was one of the principal features.
In the U.S.S.R., production of plywood reached a new record in 1957, with about 1.2 million cubic meters. Most of the increase above the previous year's level is believed to have been used for greater exports which in 1967 reached a postwar high level, remaining nevertheless still considerably below the prewar volume of exports.
Plywood production in 1956 in North America showed an increase of 330,000 cubic meters over the 1966 level, but output in 1957 showed a further rise of only 75,000 cubic meters. It is perhaps surprising that any rise at all was recorded, given the generally adverse market conditions, particularly for building materials in general and for wood products in particular in the United States towards the end of 1956. It was the production of softwood plywood (about 84 percent of total plywood production) which showed a rise, while hardwood plywood apparently declined somewhat. Plywood in the United States has apparently found more diversified and less traditional outlets during recent years than in most other countries. If this is true, then the possibility of a further rise in the country's production even during 1958 cannot be excluded, although the general economic indicators at the time of writing point in the opposite direction.
In Latin America, the increase in production has slowed down considerably singe 1955 and little new capacity, if any, has been added in the years 1956 and 1957. The years 1960, 1953 and 1965 were those of a particularly great production increase, probably as a result of extensions of plants and the completion of several new factories. Manufacturers in this region apparently prefer to see domestic consumer demand grow sufficiently before embarking on the construction of new factories or extensions in capacity.
Production of plywood in Africa suddenly doubled in 1952 and since then has shown a more moderate increase, at an annual rate of 6 percent in the years 1955 to 1957. The increase has been concentrated chiefly in the Union of South Africa; other countries have remained more or less stationary. Output in the Union of South Africa almost trebled from 1951 to 1952 (38,000 cubic meters and 100,000 cubic meters respectively) and has since increased at an annual rate of about 15,000 to 20,000 cubic meters. Domestic demand must have risen substantially to justify such an expansion, as exports seem so far to have remained relatively small. A relatively important increase has occurred in French Equatorial Africa, where output was practically nothing in 1960 but was 25,000 cubic meters in 1953 and has since then modestly but steadily increased further.
In Asia, as already mentioned, Japan has shown a spectacular growth of plywood production from 149,000 cubic meters in 1950 to 683,000 cubic meters in 1955 and 950,000 cubic meters in 1957. This means that, during this period, Japan has progressed from being the world's seventh plywood producing country to number three producer, second only to the United States and U.S.S.R. It is obvious that the export trade, notably to the United States, has been one of the principal stimulators to the Japanese plywood industry.
Another country in this region where plywood output seems to be steadily increasing is the Philippines. From about 5,000 cubic meters in 1950 it reached 40,000 by 1955 and 66,000 by 1957.
In India, which until the postwar years depended primarily on imported supplies for its plywood requirements, a rapid progress in the domestic plywood industry has been noticeable. A tariff protection by a duty of 35 percent ad valorem until December 1960 has in fact made it possible for the Indian plywood industry to increase output from 15,000 meters in 1946 to over 60,000 cubic meters in 1957. The present capacity is stated to be adequate to meet the whole domestic demand for tea chests, the main utilization of plywood in India, although raw material difficulties have apparently been experienced by some factories. In Israel, output has changed little since 1955 after having rapidly risen from 7,600 cubic meters in 1952 to over 20,000 cubic meters. Exports, notably to the United Kingdom, have recently shown an upward trend.
In the Pacific Area, the production of plywood has not changed markedly over the past three years. Most of the plywood produced is consumed on the home market. Exports from New Guinea go chiefly to Australia and New Zealand.
Trade
The year 1956 was marked by a certain decline in the volume of trade (Table 5), the second decline since 1952 in an otherwise steady postwar expansion. As in 1952, the decline in total world trade figures reflected a reduction in plywood imports by the United Kingdom. Minor increases in the imports of most other countries in 1956 were not sufficient to compensate for the considerable fall that took place in Britain, which, in 1955, had imported as much as 428,000 cubic meters (about 43 percent of total world imports). Demand in the year however did not rise as was apparently expected and the trade saw stocks rise excessively towards the end of the year. At the beginning of 1956, the main concern was to cut stocks to levels better corresponding to the generally reduced tempo of trading and to enter new import contracts only cautiously. The credit squeeze and hire-purchase restrictions also overshadowed the opening of the 1956 import campaign. All these factors generated apprehension about future price levels. In addition, the heavy stock holding, apart from a financial burden, was causing a shortage of storage space, and operators were being put to extra having to send goods to unusually distant storage points. On the other hand, the total commitment of the United Kingdom plywood trade at the beginning of 1956, in the form of forward contract balances, amounted to something in the region of seven months' consumption. This was not a very healthy position in view of the prevailing fear of a price fall. Although a reasonable amount of consumer buying continued to take place, it was largely on a hand-to-mouth basis. Many importers also, under increased pressure from the banks, proceeded to reduce stocks at relatively low prices. In such a situation, the subdued level of new purchasing during most of 1956 was to be expected. The clearance of the British Government's stockpile of plywood at the end of July also kept the rate of new purchasing rather low. Towards the end of the year, a slowly improving trend became apparent, and by the time the 1957 campaign was to be opened, the trade looked forward with more confidence than a year earlier.
The reduced purchases by the United Kingdom in 1956 affected chiefly Finnish and Soviet export shipments, which both showed a marked fall from the 1955 level. Japanese exports, on the other hand, rose fur the in 1956, chiefly because of extensive purchases by the United States. Even in Britain, Japanese lauan-plywood was reported to have been steadily sought for, despite a certain strengthening of prices as a result of the favorable market in the United States. The result was a severe competition between the plywood mills in Japan. In order to prevent the sometimes chaotic position and supervise prices on the export markets, the Japanese Veneer Board decided to establish an Adjustment Association, which also has to check the installation of additional manufacturing capacity. These measures proved successful and the Japanese export trade seems to have settled down in the course of 1956.
In 1957, the world plywood market again showed a rather favorable development. The volume of trade rose, reaching a new record level and consumer demand seems to have been sustained. The level of stocks with the trade in the principal importing countries showed little change in the course of the year. At the beginning of the 1958 campaign, consumption prospects appeared rather satisfactory. The gradual decline of prices since 1955, particularly in Europe, had however made buyers in the principal importing countries cautious, and forward buying for 1958 progressed slowly. Even the Finnish and Soviet statements of not lowering their prices for 1968 did not seem to have given the necessary assurance for more active purchasing. In other parts of the world, no disturbing signs were in view at the opening of the 1968 season. Japanese exports seemed to find the same favorable response as in the earlier years.
As mentioned earlier, the United Kingdom and the United States account for the great majority of world imports, although in the latter country imports represent only a fraction of the total consumption requirements. Japan, Finland, the U.S.S.R. and Canada, on the other hand, account for about three-quarters of total world exports. Therefore, developments in any one of these countries, the importing countries in particular, may have a stronger influence on world market developments than all the less significant exporting and importing countries together. This is also the reason why market developments in the latter have not been referred to in this report.
Prices
In a previous review, a comparison was made between the development in 1950-1955 of plywood prices, on the one hand, and sawnwood prices on the other. This comparison brought up to date (see the Graph) shows that while sawnwood export prices by and large maintained their 1955 position in 1956 and 1957, plywood prices tended to weaken further. By contrast, the cost of labor and transport has steadily increased and this in turn has made it difficult for the plywood industry to follow the price trends for sawlogs. The unavoidable consequence of a weakness in plywood export prices had therefore been a shrinking offer of peeler logs to the industry. The Finnish plywood industry, in particular, has been facing serious difficulties. It is obvious also, that the great variety of different board products which during recent years has entered both the domestic and export markets, has tended to depress plywood prices or at least to prevent them from rising. The sudden rise in Finnish plywood export prices in October 1957, apparent in the Graph, was only a result of the devaluation of the Finnish Mark in September and did not affect export prices quoted in foreign currencies. The increased export earnings came as a welcome aid to the Finnish plywood industry which, during 1956 and 1957, had experienced a weak demand abroad and rising costs at home leading to losses and to a temporary closing down of many factories.
Another interesting price comparison is in Table 6. It shows the average monthly and annual import (c. i. f) values of Finnish, Soviet and Japanese plywood imported into the United Kingdom. These values, representing the landed cost of plywood from the principal exporting countries, show fairly accurately the differences between the prices of plywood from different sources and also the development of these prices, particularly as the composition and qualities of imports should not have varied too much from year to year.
Comparison of plywood and sawnwood prices between Finland, Sweden and the United Kingdom. Index: January 1950 = 100. Finland: average f.o.b. value for plywood and birch; Sweden: value of Scots pine 2 ½ x 7 in. (65 X 180 mm.) battens; United Kingdom: average c.i.f. value for imports of plywood.
In general, Soviet plywood has during the past four years cost less to the British importers than Finnish plywood, while in 1952 it was slightly more expensive. This development, and particularly the rapid fall of Soviet prices since the end of 1956, appears to be rather unusual, as both the Soviet and Finnish plywood are made almost entirely of birch. Although Soviet plywood may, in general, be of somewhat lower quality and the sizes are perhaps less suitable to the British market, it seems unlikely that the composition and quality of Soviet shipments should have changed to such an extent in 1957 that the widened gap between the landed cost of the Soviet and Finnish goods could have been fully justified. The Japanese plywood prices or rather the c.i.f. value in the United Kingdom, on the other hand, have remained more stable. The fall in 1956, despite record freight rates in that year, was probably primarily due to the severe competition among Japanese plywood exporters referred to earlier.
As to the price developments of birch and other plywood, it seems that birch plywood is gradually losing ground to other species and that, therefore, the less favorable course of c.i.f. values could be largely a result of more severe competition from the ever increasing variety of other plywoods which enter the market every year.
The apprehension of British plywood importers with regard to a possible further decline in Finnish and Soviet plywood prices, despite assurances given by the shippers, is rather clear. Finnish plywood imported in 1956 cost on average 11 percent less per cubic meter than in 1955, and, in 1957, a further decline of 8 percent was noticed. In the case of Soviet plywood, the fall in 1956 was as much as 26.5 percent while, in 1957, the average cost further declined by 4 percent. It is clear that these successive price falls caused many difficulties to the importers whose stocks consequently tended to deteriorate in value, particularly as the consumers very rapidly took note of any new price concessions made by the Finnish or Soviet shippers. New losses resulting from further deterioration of stock values might therefore be difficult to support, particularly as in 1957 the profits of the importers did little to compensate the losses sustained during the two previous years.
Summary
The rapid expansion of the world plywood industry which was brought about by the general postwar growth of world demand for various raw materials and consumer goods, is gradually slowing down and, in fact, in many countries has already reached a stage of more or less stagnation. Only in those countries where the plywood industry traditionally relies on domestic consumption requirements is the upward trend still noticeable, although even in these countries the rate of growth is clearly falling. Competition between manufacturers, on both the domestic and export markets, is increasing considerably, not only because new species, categories and qualities of plywood have been introduced, but also because of the remarkable expansion of the fibreboard and particle board industries. Plywood manufacturers today have seriously to consider the new situation created by the great versatility of these competing materials for which considerable further progress is still in view. On the other hand, the expansion of the particle board industry, for in stance, creates new possibilities for the combined use of both plywood and particle board, and may thus, particularly in the integrated plywood/particle board industries, serve both commodities by increasing the diversity of the produce.
TABLE 6. - PLYWOOD IMPORT PRICES (United Kingdom average monthly and yearly c.i.f. values - £st. per cubic meter)
|
Period |
Finnish |
Soviet |
Japanese |
Birch |
Other |
|
|
1962 |
Year |
51.5 |
52.5 |
69.1 |
52.1 |
66.5 |
|
1963 |
Year |
48.1 |
43.1 |
45.9 |
46.9 |
55.7 |
|
1954 |
Year |
52.4 |
44.3 |
53.6 |
51.0 |
56.6 |
|
1965 |
January |
56.2 |
52.9 |
53.7 |
55.3 |
58.7 |
|
April |
56.3 |
54.7 |
54.9 |
56.2 |
58.3 |
|
|
July |
56.1 |
53.8 |
55.5 |
54.8 |
57.6 |
|
|
October |
56.2 |
54.9 |
63.0 |
55.8 |
58.0 |
|
|
Year |
56.0 |
53.6 |
53.5 |
56.4 |
57.8 |
|
|
1956 |
January |
55.4 |
64.8 |
48.8 |
55.4 |
53.6 |
|
April |
53.1 |
54.9 |
46.8 |
53.2 |
57.2 |
|
|
July |
48.8 |
43.6 |
47.1 |
48.9 |
56.4 |
|
|
October |
46.2 |
36.7 |
48.9 |
43.0 |
53.7 |
|
|
Year |
49.9 |
39.4 |
46.7 |
47.9 |
54.8 |
|
|
1967 |
January |
43.6 |
36.4 |
50.6 |
41.6 |
51.8 |
|
April |
43.6 |
38.1 |
57.4 |
41.6 |
55.2 |
|
|
July |
45.7 |
36.8 |
63.8 |
42.6 |
55.4 |
|
|
October |
47.6 |
39.3 |
67.0 |
46.2 |
66.3 |
|
|
November |
49.9 |
39.2 |
66.6 |
46.1 |
54.0 |
|
|
December |
48.7 |
38.0 |
63.8 |
46.9 |
66.9 |
|
|
Year |
46.8 |
37.9 |
55.2 |
43.7 |
56.2 |
|
The supremacy of plywood - once solidly established - as a versatile raw material is now being increasingly challenged by newer products. In its response to this challenge the plywood industry will no doubt multiply its efforts to improve production and glueing methods and to diversify utilization possibilities. The many efficient molding processes now in use in almost every plywood producing country and the various new surface applications, chemical treatments, etc., are only examples of the possibilities which still lie in store.
E. K.
FORTHCOMING MEETINGS
|
1958 | ||
|
4-15 November |
Latin-American Forestry Commission (6th Session) |
Guatemala |
|
25 September-10 October |
International Chestnut Commission (4th Session) |
Yugoslavia and Greece |
|
18 October-1 November |
Near East Forestry Commission (2nd Session) |
Iraq |
|
1959 | ||
|
February |
Asia-Pacific Forestry Commission (5th Session) |
India |
|
May |
International Poplar Commission (10th Session) |
Italy |
|
June |
European Forestry Commission (10th Session) |
Rome |
|
October |
Regional meeting of pulp and paper experts |
Far East |
|
November |
FAO Conference (10th Session) |
Rome |
