U. S. Forest Service Research Paper SO-17

U.S. Hardwood Imports Grow

as World Supplies Expand.’

William C. Siegeland

Clark Row

SOUTHERN FOREST EXPERIMENT STATIONW. M. Zillgitt, Director

FOREST SERVICEU. S. DEPARTMENT OF AGRICULTURE

1965

U.S. Hardwood Imports Grow

as World Supplies Expand

William C. Siegeland

Clark Row

1965

CONTENTS

World hardwood trade

Trends In the U. 8. are diverse . .

World consumption increases _

Supplv from tropics grows . .

P r i c e s , f r e i g h t , a n d t a r i f f s I m p o r t a n t

U 8 h a r d w o o d i m p o r t s

L o g s

L u m b e r

Plywood

V e n e e r

F l o o r i n g

Effects on U. S Industries

Prospects for hardwood Imports

Asia’s potentral is enormous

Imports from Africa may increase

Latin American exports unlikely to rise soon

Canadran s h i p m e n t s t o d e c l i n e

European exports to stay small . _

Summary . .

Literature cited . 2 0

A p p e n d i x 2 2

Table 1. U. 8. Imports of hardwood logs, 1946-l 963 2 2

Table 2. U. S. imports of hardwood lumber, 1946-1963 2 3

Table 3. U. S. imports of hardwood plywood, 1946-l 963 2 4

Table 4. U. S. imports of hardwood veneer, 1946-l 963 2 5

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Rapidly increasing imports have captured asignificant share of America’s hardwood mar-kets. Total imports of hardwood raw materialsand building products are now four times aslarge as exports. Before World War II theU. S. was a net exporter of hardwoods, andimports were limited to high-quality mahog-any and specialty logs and lumber.

Availability of large volumes of competi-tively priced imports has led to a doubling ofU. S. consumption of hardwood plywood inthe last 10 years. Lumber, principally fromtropical areas, comprises an increasing share ofthe fine hardwood used in furniture and othermanufactures. Though not covered specificallyby this report, imports of wooden consumerproducts such as housewares, furniture, andsporting goods have also risen rapidly.

Though imports comprise only 7 percent ofthe present supply, they have contributed tothe many difficulties of the American hard-wood industry. Most imports are clear logsor products with defect-free surfaces. Theyhave absorbed a large share of the market pre-viously held by the best grades of Americanhardwood timber. Thus availability of low-cost imports has tended to reduce prices andprofit margins on many high-quality domesticproducts. U. S. firms, particularly lumber pro-ducers. have traditionally depended on high-value grades for the largest part of their prof-its. Together with the scarcity of good timber.

the increased competition has caused financialdifficulties in some firms and discouraged out-put increases in others.

Hardwood imports are almost certain tocontinue rising. The U. S. still purchases onlya small fraction of the hardwood in worldtrade. Supplies of timber cut in southeast Asiaand West Africa, now mostly shipped to Europeand Japan, have expanded much more rapidlythan U. S. imports. The potential output fromtropical countries with developing forest indus-tries is large relative to America’s demand forfine wood. Many factors, however, will influ-ence the rate of increase in imports. Amongthem are the potential demand in the U. S.and in other developed countries. and thogrowth of logging in the tropics. If speciesother than true mahogany ( from Latin Ameri-ca 1, lauan ( Philippine mahogany i, and khaya(African mahogany) continue to gain popu-larity in the U. S., growth of imports may berapid.

This report will discuss first the changes inthe world hardwood trade; then, trends inU. S. imports of hardwood; and finally, poten-tialities of various foreign areas for increasedshipments to the U. S. The analysis is basedprimarily on records of U. S. imports (261,’world timber production and trade (10.121,and world forest resources (13). Regional an-alyses of timber trends and prospects have alsobeen consulted (7.9,15.16).

WORLD HARDWOOD TRADE

The increase in U. S. hardwood imports is a year in 1947-48 to 8.0 billion feet in 1961-62part of a drastic shift in consumption and pro- -is due to losses in markets for low-gradeduction patterns throughout the world. hardwoods for crating and shipping boxes. rail-

Trends in the U. S. are Diverseroad ties, and flooring. These losses have beenpartially offset by increased use for pallets and.

In 1947-48, the U. S. produced and consumed more importantly, in manufacturing and panel-more than 40 percent of worldwide hardwood ing. The market for low-grade material hasoutput.’ The volume has since declined stcad- slackened considerably while the demand forily (fig. 1 I. clear wood has increased.

Most of the 19-percent reduction in con- U. S. production has declined even more thansumption-roughly from 9.8 billion board feet consumption. The lumber and plywood indus-

1 Italic numbers in parentheses refer to Literature Cited. p 20

-‘Volumes for major products have been converted to approximate roundmood volumes by applying the following e q u i v a l e n t ?

per 1,000 board feet of loss:Roundwood. 4.30 cubic meters Plywood. 1.87 cubic meter.; 13.170 square feet. ‘4-~ncl~i

Lumber. 2 36 cubic meters Veneer, 2 26 cubic meters i9.600 square feet. 1 10.inch)Cubic meters are measured as so l id wood at nominal product dmensions.

PRODUCTION CONSUMPTION

Figure I.-Hu~clu~ood pujdztction and consumption has expanded in world areasother t11an the u. s.

tries face a growing scarcity of timber of suf-ficient concentration, size, and quality. Theresources of the Ohio Valley and Lake Stateshave been repeatedly high-graded, and a ma-jority of upland hardwood stands in the East-ern United States contain only small, low-grade, or cull trees 124). In the areas of great-est industry concentration-the MississippiDelta, other southern river bottoms, and thesouthern Appalachians-the supply of primetimber continues to dwindle. As a result, tim-ber prices have steadily risen, and those forveneer logs of the best grades are now ex-tremely high. Overall, less than one-fifth ofU. S. hardwood sawtimber is 15 inches d.b.h.or larger and of grades 1 and 2 (27)

In the last decade timber shortages havecaused substantial numbers of lumber andveneer operations to close. To stay in businessmany American firms have concentrated onexpanding remanufacturing - for dimensionstock, parts, flooring, and prefinished products-and on improving operating efficiency.

The U. S. has a plentiful supply of low- andmedium-grade hardwood timber relative tothe shrinking demand for products from suchtimber. It is the gap between the growingdemand for high-grade hardwood products andour diminishing ability to supply them, at cur-rent world prices, that has encouraged imports.

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The trend in imports has been toward manu-factured products, rather than logs. A fewAmerican firms have opened up foreign opera-tions to obtain logs for U. S. processing, butthis course is less economic than it is for firmsof other nations. Ocean transportation is morecostly and less frequent from tropical portsto U. S. wood-processing areas than to Europeor *Japan 11). Higher American wages, as com-pared to those in primary or secondary pro-ducing countries, apparently are not fully off-set by increased productivity. Except in thePhilippines the U. S. has no long-establishedconnections with former possessions havingmajor hardwood resources. The business cli-mate in Latin America has not encouraged cap-ital investment in logging or wood productsmanufacture.

World Consumption IncreasesIn countries other than the U. S. and Cana-

da, consumption of both fine and utility gradehardwoods has risen rapidly. Europe. whichonce used less than half as much hardwoodas the U. S., now consumes more. Trends aresimilar to those in the U. S.-increased use ofitems like paneling and flush doors, but sub-stitution of other materials for structural pur-poses, packaging, and mining (16). As Europehas never had such high per capita use as has

prevailed in the U. S., increased demand re-sulting from economic growth has masked theeffects of substitution. Similarly, large in-creases in consumption have occurred in Japanand other Asian countries, and moderate onesin Australia, Africa, and Latin America, andreportedly in Russia.

Industralized countries are generally findingthat domestic forests can furnish only part oftheir hardwood demand, even though Europe,Japan, and Russia have increased the volumecut from native hardwoods by 75 percent ormore. Many European hardwood forests areeither being logged too heavily or are at thelimits of allowable cuts. Japan has been liqui-dating hardwood stands and converting to soft-woods.

Most industralized countries increasinglyimport both raw materials and finished goods.Western Europe now purchases abroad 18 per-cent of its total hardwood requirements, Japan52 percent, and Australia and New Zealand7 percent, and Russia 1 percent. In comparison,the U. S. imports 7 percent.

The bulk of the new hardwood supply iscoming from southeast Asia and West Africa.In many countries-such as the Philippines,Malaysia, Ghana, Nigeria, and Cameroun-logging in the lush but highly varied tropicalforests has greatly increased the supply of finehardwoods. So far most tropical exports, fi-nanced by European or Japanese capital, havebeen log shipments. In 1961-62 shipments toJapan and western Europe averaged nearly 3billion board feet per year-five times thetotal volume of U. S. imports.

Logging in the West Indies and CentralAmerica, the traditional U. S. sources of exotichardwoods, has declined in the postwar period.South American countries, which increasedtheir cut by 33 percent from 1947-48 to 1960-61,have used most of the additional volume them-selves.

Supply From Tropics GrowsThe vast increase in Asian and African tim-

ber cutting has been due to two factors: rapidmechanization of many logging and transportoperations, and broadening of the number ofspecies marketable for plywood.

In West Africa and southeast Asia, loggershave mechanized rapidly. In skidding, hand

rolling and draft animals have given place suc-cessively to crawler and wheeled iractors.Though narrow-gage railroads are still opera-ting in old areas, most loggers in newly openedregions use roads and diesel trucks. Loading,a problem with the very large, high-value logs,is often accomplished by mechanized cranesand lift-trucks. Some loggers in the tropicshave equipment more powerful than any foundin hardwood areas of the U. S. 16,21 I.

Once American and European tractors andother equipment would not stand up in thetropics, but this situation is rapidly being cor-rected. Increasing experience with tires, maint-enance, road construction, and supervision issteadily reducing costs and permitting loggingof species and areas formerly considered inop-erable. In lumber and plywood manufacture,experience is also being accumulated. Twovery large modern sawmills are operating suc-cessfully in West Africa 15).

The shift to plywood and veneer has helpeddevelop technology for processing previouslyunused woods. In Europe and Japan, as in theU. S., markets for plywood and veneer haveseen phenomenal growth, whereas those forsolid cabinet and furniture lumber have ex-panded less rapidly. Many soft and readilyturnable woods have been found suitable forplywood and cheap to manufacture (3). Theresult has been a great expansion of exportablespecies.

Before World War II the export trade waslargely in heavy woods for exposed portionsof fine furniture and in lumber of mediumdensity for general manufacture, paneling, andmillwork. Today the bulk of the volume is inspecies suitable mainly for plywood or veneer,and which sell for half the price of cabinetwoods. Among the major exports are manyspecies with exotic names-okoume, obeche,sapele, abura, utile, agba. makore, doussie,azobe, iroko, and some 20 others. Some ofthese are species of secondary forests and a-bandoned fields, and their harvest thus doesnot deplete the reserve of high primary forests.

The Philippines and the Borneo provincesof Malaysia are fortunate in that a number ofprevalent species are so similar they can bemarketed either as lauan or apitong (22).

Only a small part of the increased interna-tional trade is in woods with unique proper-

ties. Examples are teak from Burma and Thai-land for ship decking and other uses, and lig-num vitae from Central America and the WestIndies for pcrposes requiring resistance tosplitting. Similarly. American walnut for ve-neer is exported to Europe and Japan.

Though most tropical logging is classified as“destructive” and is a cause of some alarm,opinions differ as to the long-run economiceffects. Some is salvage cutting. removingstands from areas to be devoted to rubber,cocoa, or other crops. Some is on tracts thatwould have been lost to the shifting agricultureof native populations. Many tropical forestersbe!ieve that the only profitable way to managethe highly variable timber is to cut heavilyand “enrich” the stands by seeding or planting,or to clearcut and establish solid plantations14,171.

Many tropical countries encourage timbershipments to di\Tersify exporis. This is one wayto reduce dependence on the fluctuating worldmarkets for agricultural products. Earningsfrom timber sales help pay for imports of con-sumer goods and equipment and supplies foreconomic development. Construction of roadsand related transport facilities for the timbertrade aids other development programs, andgovernments hope that growth of sawmillingand plywood manufacture will encourage addi-tional manufacturing industries 129 ).

Areas with moderately low-cost but techni-cally proficient labor-such as Japan, HongKong. Taiwan, Italy. Belgium, and Israel-profitably import tropical logs, manufacturethem. and export them as plywood or otherproducts. Plywood output of these secondaryproducers has risen rapidly, because the ad-vantages of technical and commercial develop-ment outweigh the benefits of cheap labor inmost emerging tropical nations. Industralizedcountries also gain from utilizing mill residuesfor byproducts.

Prices, Freight, and TariffsImportant

Diversity of species and absence of generallyapplied grades complicate world price compari-sons. The lack of grades also increases theuncertainty in trading, makes price negotiationdifficult, and hinders the establishment of newmarkets.

Prices of hardwood logs declined after theearly 1950’s, but have recently been rising( fig. 2 1. Average log values obscure the sharpprice increases for top-grade roundwood suit-able for veneer (11). Lumber, however, hasrisen steadily in price. As world output ofplywood increased and technology improved,plywood prices tended to drop, particularlyin the American market.

----m/-.___Cx---x\

P L Y W O O D ‘v-7

I0,947 ‘48 ‘ 5 0 ‘ 5 2 ‘ 5 4 ‘ 5 6 ‘56 ‘ 6 0 ‘62

Figure 2.-Average prices for imported plywoodand logs have dropped, those for lzlm-ber have risen.

The significance of these price trends de-pends on the relationships to competing do-mestic products. In Europe the price differ-ences between high-quality imports and do-mestic logs and lumber have tended to narrow.The result has been a great stimulation of im-ports and their widespread substitution fornative hardwoods (3). In the U. S. prices ofimports and of the best grades of domestic logsand hardwood lumber have both risen, withno pronounced changes in price relationships.The most notable change has been the sharpdrop in the price of imported plywood, whichhas greatly expanded the plywood market.

Ocean transport costs are an important in-fluence on hardwood prices. Rates for less thanshipload quantities on scheduled freighters aretightly controlled by the international shippingconferences, which are cartels composed ofthe major companies serving particular traderoutes. In the last 15 years the conferencesserving principal tropical timber producingareas and Europe or the U. S. have raised ratesin a number of sharp jumps. Confusion has

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been created by capricious rate changes suchas those made by the West Africa Lines Con-ference in 1958 and 1959 (8).

Ocean freight charges depend on amount oftrade between ports and the number and na-tionality of lines competing. Rates from Asianand African tropics are generally higher to theU. S. than to Europe. Additional freight econ-omies are obtained by European and Japaneseimporters whose shipments of logs and lumberare large enough to enable them to chartervessels. Their costs are much below conferencerates, particularly since the ships can oftenobtain bulk cargo for the return voyage.

Freight costs per unit of finished productare higher if the wood is shipped as logs ratherthan as lumber, veneer, or plywood, especiallysince rates are based on cargo volumes. Rough-ly 30 percent of a hold filled with logs is void,and additional space is occupied by wood thatwill become residues (61. Squaring tropicallogs prior to export, a practice dying out withthe growing use of logs for plywood, reducedtransport cost appreciably but wasted wood.Savings in freight are among the importantreasons for the trend toward processing thetimber near its origin.

At present, higher tariffs on manufacturedproducts than on logs either partially or whollyoffset differences in freight. Though most du-ties on lumber have been reduced, those onveneer and plywood still tend to make produc-

tion in the tropics uneconomic (14). In addi-tion, most European countries grant preferen-tial tariffs to former colonies and possessions.The preferential duties on timber from theBritish Commonwealth, which includes themajor timber producing areas of Ghana, Ni-geria, Burma, and Malaysia, give these coun-tries an advantage in the United Kingdom.Former French and Belgian colonies in WestAfrica-Ivory Coast , Dahomey, Cameroun,Gabon, Congo, and the Congo Republic-havesimilar preferential status in the Common Mar-ket areas. Logging concessions, investments,and commercial connections established undercolonial rule have also been preserved 18).

U. S. duty rates on most hardwood itemsother than veneer and plywood are too low toaffect trade. Logs enter free. Specific tariffson lumber range from S1.50 per M b.f. for manyspecies, including lauan, to $3.00 per M b.f. forbalsa and teak. On seven species of hardwoodlumber which are imported in small quantities,duties are 2i 2 percent of wholesale value.Strip flooring has a duty of 4 percent and blockflooring 16-2 3 percent.

Duties on plywood, however, increase pricesin U. S. markets substantially. They rangefrom a low of 15 percent for birch to a highof 40 percent for Spanish cedar. Veneer ratesare also levied as a percent of value-8 percentfor birch and maple and 10 percent for all otherspecies.

U. S. HARDWOOD IMPORTS

In recent years import trends have shiftedsubstantially-in volume, source, species ofwood, and the proportion in various stages ofmanufacture. Plywood and veneer, which con-tributed most of the postwar increase in im-ports, now comprise 55 percent of hardwoodimports by volume, and 72 percent by value.Lumber imports have also risen substantially;log receipts rose and then fell. Though flooringand dimension have gained, they still consti-tute only 1 percent of imports. Figure 3 showshow these varying changes have altered theproportions of imports.

Figure 3.-Plywood has eclipsedlumber as the ma-jor hardwood im-port.

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The rise of imports has been relativelysteady, with fewer reversals from economicconditions than before the war. The recessionsof 1949, 1952-53. and 1957-58 caused minordeclines that were promptly reversed. Trendsin imports of each product are tabulated inthe Appendix.

LogsImports account for less than 1 percent of

logs consumed by U. S. mills, but nearly allmust be prime quality to justify ocean freight.Some U. S. firms at major ports have longspecialized in cutting tropical logs. Thoughsome log-importing plants have closed, addi-tional mills have begun importing to supple-ment dwindling and expensive domestic sup-plies.

From an average of 37 million beard feet in1935 through 1939 log imports more thandoubled within a few years after the war. After0 years of irregular shipments, imports dropped25 percent in the 1957 recession and declinedmore since. In 1963 the total was 54 million,nearly the low for postwar years. Year-to-yearvariations have been large, and appear attribut-able chiefly to logging conditions in producingcountries and changes in trade policy. Annualshipments are not statistically related to pricesof imported logs or of domestic or importedlumber or plywood. Nor are they connectedwith demand for hardwood consumer products.

The major areas from which the U. S. im-ports logs-Latin America, Africa, Asia, andCanada-have kept their relative positions

in the dwindling market. Individual countries,such as British Honduras, Mexico, and severalin the West Indies, have virtually ceased ship-ments. The major Latin American sources arenow Columbia and Nicaragua. The drop inAfrican imports is largely equal to the sharpreduction in shipments from Ghana. Figure 4shows the 1963 pattern of log imports.

Shifting sources of log imports have led toa decreased percentage of both true mahoganyfrom Latin America and khaya (African ma-hogany ), largely from Ghana. Shipments oflauan and similar species increased rapidlyfrom the end of the war to the mid-1950’s, butthen fell to less than one-fourth of the marketas Japanese mills began to outbid the U. S. forPhilippine logs. These declines have been par-tially offset by receipts from Columbia. Thoughthe growing volume of expensive lignum vitaeand teak is still only 1 percent of imported logs,the value now varies from 4 to 5 percent ofthe total.

LumberIn the late 1930’s the U. S. exported twice

the volume of hardwood lumber that it im-ported. The situation is now reversed. Im-ports since the war have been triple those ofprewar years and at present comprise nearly5 percent of domestic consumption.

Each postwar recession broke the rise inlumber imports, but the largest influence onannual volumes has been furniture sales (fig.5 I. Each l-percent rise in furniture sales ap-

Figure 4.-The pattern of log imports has changed little since 1948, despite thedecline in volume.

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pears to be associated with a 2-percent rise inlumber imports. Rapid increases in prices ofimported lumber, though, have limited thegrowth of sales. The average price of foreignwoods rose 50 percent between 1947-48 and1961-62; domestic hardwoods rose 18 percent.Analysis showed a 1.2-percent drop in importsfor each l-percent rise in the value of foreignwood relative to domestic.

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I0 1 I I1946 s48 ‘50 ‘52 ‘ 5 4 ‘ 5 6 ‘58 ‘60 ‘62

Figure 5.-The rise in lumber imports is related tofurniture sales, but has been damp-ened bu increasing prices.

Canada has long been the principal sourceof imported lumber, chiefly beech, birch, andmaple. Both Canadian and American sawmillsnear the border often regard shipments to theother country as routine. Thus while the U. S.imported 123 million board feet from Canadain 1963, it exported 86 million to Canada.

Figure 6 shows the 1963 pattern of lumber im-ports.

The increase in hardwoods has come mostlyfrom southeast Asia, Africa, and northernSouth America. Though the Philippines haveshipped lauan and similar lumber to the U. S.since before World War II, the Japanese en-tered the market in volume in 1954 with lum-ber sawn from Philippine and North Borneologs. Japan now sells considerably more lum-ber than the Philippines. More recently otherAsian areas have begun in-transit sawmilling.While the share coming from Latin Americahas grown, sources have shifted continually.Nicaragua and Columbia have increased sales;shipments from Mexico, the West Indies, andother Central American countries have dwin-dled. African lumber sources have also shifted.The share from the two major suppliers, Ghanaand Nigeria, has declined while that from otherWest African countries has increased.

Up to 1952 birch, beech, and maple consti-tuted half of lumber imports, but by 1958-62their share had dropped to 38 percent. Somelumber of these species comes from Japan aswell as from Canada. As the center of LatinAmerican sources has moved to northernSouth America, the proportion of mahoganyhas declined and that of cativo arf.[ other spe-cies has increased. Similarly in lumber importsfrom West Africa, the shift in trade from Ghanato other countries has led to a decline in khaya.Balsa from Equador, once 5 percent of imports,has declined sharply.

Almost all of the large increase in shipmentsfrom Japan, the Philippines, and other Asiancountries has been lauan.

Figure 6.-The increase in lumber imports is mostly from southeast Asia andAfrica.

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PlywoodPlywood now accounts for half of the vol-

ume and value of hardwood imports. As figure7 shows, the rise in shipments began in 1952and has increased almost steadily. Importshave exceeded domestic output since 1957 andhave supplied most of the rapid rise in U. S.consumption.

Figure ‘I.--Plywood imports have furnished mostof the greatly increased U. S. con-sumption of hardwood plywood.

Despite a 20-percent tariff, exporters areable to deliver finished plywood at a pricehighly competitive with that of domestic sheets.The availability of inexpensive imports hashelped create two major new markets-flushdoors and interior paneling. Between 1947and 1958 annual output of flush doors rosefrom a few hundred thousand to more than15 million. The traditional panel door hasbeen nearly supplanted. For interior paneling

in homes and commercial structures, hardwoodplywood has made significant gains on plasterand sheetrock, softwood plywood, hardboard,and knotty pine paneling.

The chief stimulus to imports has been thedecline in wholesale prices from around 5125per thousand surface square feet in 1951-52to $70 since 1957. Prices for domestic sheetshave also declined, but not so rapidly. Since1958 imports have varied with the level ofconstruction expenditures.

Though imports have not caused domesticproduction to drop, they have depressed prices.Domestic plywood has long been able to sellat a premium over foreign types, but the dif-ferential has narrowed considerably.

Nations are competing vigorously for thebooming U. S. market. In 1953 Japanese ex-porters launched their first big sales drive andincreased shipments several times over thoseof the preceeding year. Japan again raised itsshare of the market in 1957, when it cut pricesto $65 per thousand square feet, while sheetsfrom other countires were priced at $110. Otherexporters soon followed suit, and as a resultJapan’s share of U. S. imports has shrunk to45 percent, though total volume has grown.

Japan’s major competitors have been otherAsian nations-principally Taiwan, the Philip-pines, and, in the last few years, South Koreaand the Ryukyus ( Okinawa )-which have allmade sharp gains in sales. In 1963 Taiwanshipped 17 percent, the Philippines 16, andKorea 8 percent of plywood imports ( fig. 8 1.

Canada and Finland supplied nearly all ofthe small import market of early postwar years,

Figure 8.-The great expansion of plywood imports has largely been from Asiannations engaged in in-transit manufacture.

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but could not long match prices set by Japanand other Asian countries. Surinam is thechief supplier of the small quantities importedfrom Latin America.

Asian mills, in Japan and elsewhere, peelmostly lauan or similar Dipterocarp timberimported from the Philippines, or more re-cently, from the Borneo areas of Malaysia. In1962 these species were three-fourths of allimports. Japan also ships increasing amountsof plywood made from native-grown sen, birch,and other minor species. For the last severalyears Japan, the Philippines, Okinawa, andother Asian nations have made prefinished andprinted plywood as well as natural panels.

With the decline of Canadian shipments, theproportion of birch among imports has droppedfrom 80 percent in early postwar years to lessthan 15 percent.

The share of species other than lauan, sen,and birch has slowly increased. Most has comefrom the fledgling plywood industry in WestAfrica. Plywood shipped by Italy, France, theNetherlands, Spain, and West Germany is madeboth from African logs and from lauan andteak from southeast Asia.

Veneer

of veneer exported by most countries are thesame as the species of plywood.

Figure 9.-imports of veneer, like those of lum,ber,are closely related to the growth ofU. S. furniture sales.

FlooringImports of hardwood flooring, negligible in

prewar years, are still small relative to thetotal U. S. market. The business is marginal.

Effects on U. S. Industries

Virtually all comes from Canada and is cutto the same pattern as domestic stock. Theproportion from other countries has risenslightly in recent years. Shipments fluctuatewidely from year to year, depending on homeconstruction activity.

ports- are used as faces for furniture, lumber

Imports of hardwood veneer have also stead-

and particle board cores, and plywood made

ily increased, reaching an alltime high of 1.4billion square feet in 1963. The rise has beennearly as steep as for plywood (fig. 9). Im-

in the U. S., but the trend in shipments is sta-tistically related only to the furniture market.For every l-percent increase in furniture salesbetween 1947 and 1962, veneer imports rosean average of 6 percent.

The pattern of veneer imports resemblesthat of plywood, except that the largest sharecomes from primary timber-growing countries.

As with plywood, Canada’s once command-ing share of the market has declined substan-tially. The primary cause has been competitionfrom the Philippines and Japan, the presentleading sources. Latin American shipments arealso on the rise but comprised only 3 percentof U. S. receipts in 1962. European countriesfurnish small quantities of specialty veneerscut from logs grown elsewhere. The species

Imported lumber and flooring, being a smallproportion of the total U. S. supply, affectdomestic output and prices less than do rapidlychanging markets, increasing operating costs,and declining raw material supplies. But withfurther widening of the gap between domesticdemand and supply of fine lumber, a rapidincrease in imports can be expected. Andgreatly enlarged volumes might produce effi-ciencies in exporting countries that would sub-stantially improve their competitive position.

The effect on the small U. S. plywood indus-try, in contrast, has been substantial. Thetypical plywood firm is a small business pro-ducing about 13 million square feet per yearand employing 50 to 300 men. All together,there are 130 plants, mostly east of the Missis-

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sippi River, with an employment of 15,000.Evidence on the effect of imports comes main-ly from reports of the U. S. Tariff Commission(281 on applications of the plywood industryfor increased tariff protection. These applica-tions were based on an escape clause, now nolonger in effect, that provided relief for vitalindustries severely hurt by imports.

In 1955 the Commission reported that 40percent of the companies submitting recordsoperated at a loss in 1954, that net income wasone-third that of 1951, and that employmentwas down 12 percent from 1948. In 1959 theCommission again found price declines causedby foreign competition. Profits had continuedto fall, and 39 percent of the firms operatedat a loss in 1958. The industry’s proposals fortariffs and other restrictions were denied in1955 and again in 1959.

To obtain relief under the Trade ExpansionAct of 1962 it must be proved that the industryhas been damaged by recent reductions intariffs. But plywood tariffs have not beenlowered for many years. The act allows dutieson broad ranges of products to be reduced inreturn for concessions of other countries onAmerican goods. Such concessions are general-ly made during negotiations under the GeneralAgreement on Tariffs and Trade (GATT I.

In the past decade, nearly 50 bills were in-troduced in Congress to limit competition fromforeign woods. The most important would have(a) required imposition of quotas, (b) barredforeign products in construction insured by theFederal Housing Administration and the Veter-ans Administration, (c) required imports tobe grade-marked within the U. S. and labeledas to country of origin, and (d) extended theAgricultural Marketing Act of 1937 to forestproducts, so as to give the Secretary of Agri-culture power to regulate lumber imports (201.

Several counter-arguments were used to de-feat these proposals. Discrimination against

the two biggest shippers, Canada and Japan,might bring retaliation, since U. S. sales tothese countries exceed $5 billion annually.American hardwood industries are not at allinfants, it was argued, and high tariffs or im-port restrictions would do little to remedy re-source depletion, equipment obsolescence, man-agement deficiencies, and inadequate market-ing.

More important, reduction of tariffs notnecessary for national security has been advo-cated by each Administration for 30 years inorder to foster world trade, economic develop-ment, and peace. Under reciprocal trade agree-ments and membership in GATT, average tar-iffs have gradually declined from the high1930 rates.

How imports affect U. S. timber resourcesis a matter of opinion. From one viewpoint,they deprive American stumpage holders ofmarkets, lower stumpage prices, and if in-creased will threaten the future profitabilityof managing hardwood timber stands. Anotherviewpoint holds that imports will maintainmarkets for fine hardwoods while allowingAmerican forest managers to retain enoughhigh-quality growing stock to produce futurecrops. If domestic consumption in postwaryears had all come from American timber, theresource-particularly southern hardwoods-would have been depleted even more severelythan it was. Still more likely, markets may havebeen permanently lost to substitutes.

Faced with the prospect of continued intensecompetition, some plywood producers are tak-ing constructive measures. A few firms havemerged or consolidated with larger wood prod-ucts organizations. These steps have allowedthem to improve mechanization, log utiliza-tion, product development and marketing. Sev-eral firms have invested in overseas plants tofurnish face veneers for application to domestichardwood or softwood cores and backs.

PROSPECTS FOR HARDWOOD IMPORTS

U. S. experience with imports has mostly cutting; others are just beginning to developbeen with a limited number of species from a capacity for logging and processing timber. In-few countries. Present patterns give only a creases in imports will all come from tropicalrough picture of the potential of foreign areas forests.to supply hardwoods. Some traditional sup- A decade ago, further sizable penetration in-pliers can scarcely maintain present rates of to the American market would have required

10

large percentage increases in exports fromtropical countries. But since the vast expansionof the world timber trade, even doubling U. S.imports would require only 26 percent largershipments from southeast Asia and West Afri-ca. Thus a diversion of large volumes of timberand wood products to the U. S., in response tofavorable prices or market conditions, couldeasily be accomplished.

Resource and production statistics of thevarious countries are difficult to compare.Large areas of presently nonaccessible timberhave been inadequately surveyed f23). Timberharvest and production is frequently under-stated, particularly when reporting units aresmall and isolated. Despite the FAO’s effortsto obtain uniformity in definitions, measure-ments, and reporting, substantial differencesremain. Nevertheless recent statistics indicatepotential supplies. The following discussionsof possible increased trade from Asia, WestAfrica, and Latin America are largely basedon FAO surveys of timber trends and prospectsfor these areas (7, 9, 15).

Asia’s Potential is EnormousHardwood production has risen faster in

southeast Asia than in any other region. Be-tween 1947-48 and 1961-62 timber cutting ex-panded fourfold, with most of the gain com-ing from three small areas: the Philippines,and the North Borneo and Sarawak provincesof Malaysia.’ Only a small fraction of the in-creased timber output has been shipped, direct-ly or indirectly, to the U. S.

Tropical forests in southeast Asia supply 13percent of the world’s hardwood raw materials,measured in roundwood equivalents. The bulkof the export volume comes from the rain for-est that covers most of the Malay peninsula,Borneo, Sumatra, and the southern Philip-pines ( fig. 10 1. This type merges with seasonalmonsoon forests in southwest India, Ceylon,Burma, Thailand, eastern Indonesia, New Gui-nea, and northeast Australia. In heavily popu-lated areas the forest has been extensivelycleared for agriculture; in parts of Burma,Thailand, Malaysia, and the Philippines it isbeing logged for export; and elsewhere, as in

Figure lO.-Extensive forests of southeast Asia are a probable source of increasedhardwood shipments to the U. S.

J In September 1963. the Republic of Malaysia was formed from the Federation of Malaya (a former Brit ish colony givenindependence in 19571 and the British possessions of Singapore, North Borneo. and Sarawak.

11

Sumatra, Borneo, and New Guinea, large areasare untouched and even unexplored.

Many timber stands have relatively highproportions of commercial species. In the Phil-ippines, Borneo, and Malaysia the dozen or sospecies sold as lauan and another dozen knownas apitong may comprise 30 to 40 percent of astand’s volume. In Burma, Thailand, and In-dia teak and sal comprise a sizable proportionof stands being cut.

The total forest area of southeast Asia is ex-tremely large ( fig. 11 ) The mainland has 150million acres developed for logging; the standscontain some 500 billion board feet of saw-timber. The marketable portion varies widelywith timber type and location. Roughly thesame amount of forest area has been opened forlogging on the islands, but the remaining vol-ume is nearly twice as great, or roughly 1 tril-lion board feet. The largest portion of the off-shore timber is in Indonesia.

F O R E S T AREA 1961 R E M O V A L S

*

Figure Il.--The Philippines, Malaysza, and Japanhave higher rates of hardwood timbercutting, re la t ive to r esources , thanother Asian nations.

Considerable timber grows in the less popu-lated areas that are accessible but in which notimber is now being harvested commercially.In addition there are large blocks of timber oninaccessible lands in New Guinea and the outerislands of Indonesia. These areas contain some250 million acres of forest, half of which is es-timated to be potentially commercial.

Immediate increases in output will have tocome from more rapid logging of the forestsnow being cut and from areas classed as un-

exploited but accessible. Parts of Burma, Thai-land, and the Philippines have been over-ex-ploited, but immense forests have not been cutat all. In these places and elsewhere, generaleconomic development may soon open up ex-tensive new areas. Most nations are aware ofthe need to reserve forests and to plan loggingto perpetuate the supply. But progress varieswidely from country to country. Research onnatural regeneration and plantations is welldeveloped and has demonstrated that planta-tions can yield high volumes of export specieson short rotations.

In the Philippines logging operations arelarger and more mechanized than elsewhere insoutheast Asia. Modern tractors, trucks, load-ers, and even high-lead yarders are in wideuse. Philippine forests are well suited to me-chanical equipment. The lauans, apitong, tan-gile, and other commercial species average 18to 20 M b.f. per acre. Much of the forest is neardeep water where the logs can be picked upfor shipment. These advantages have enabledthe Philippines to export huge quantities oflogs, mostly to the Japanese plywood industry.

Manufacture and export of lumber, veneer,and plywood from the Philippines is small butrising rapidly. The U. S. buys roughly three-fourths of the Islands’ lumber exports-pur-chases rose from 1 million board feet in 1946to 51 million in 1959. Since 1960 Philippine ve-neer has comprised one-fourth of the total im-ported by the U. S. and almost all of the lauan.

Up to now the Philippines have been handi-capped by inadequate trade channels, lackof a universally recognized and applied gradingsystem, frequently uneven quality control andpacking practices, and heavy freight chargesand infrequent sailings. Moderately high wagesand high costs for equipment, service, andmaintenance were handicaps prior to theIslands’ currency devaluation in 1962. Theproportion of normal duties levied on Philip-pine goods entering the U. S. has been in-creased 122).

The Philippine Republic has considered anembargo or export quota on logs to Japan.Since the Japanese are the Philippines’ bestcustomers for logs and the sales provide neededforeign exchange, action will probably be de-layed until the Philippines can more nearlycompete in the manufacture of plywood andlumber (22 1.

13

Much of the accessible Philippine forest hasalready been blocked into logging concessionsand allocated to native and foreign firms. Whilemany blocks will last for years new conces-sions are difficult to obtain. Hence, Japaneseand other buyers of veneer logs are increasing-ly seeking virgin sources in North Borneo, Sara-wak, and other southeast Asian areas. As pro-duction has grown, logging in North Borneo hasgreatly improved in efficiency. Tractor andhigh-lead skidding is supplanting older meth-ods such as man-haulage of log-laden woodensleds. Road systems have been improved, andheavy hauling equipment is often feasible. Asin the Philippines, the incidence of commercialspecies in Borneo forests favors mechanization.Similar conditions may be present in the outerIndonesian islands and other areas.

Though the areas now forming Malaysiahave rapidly increased hardwood logging andprocessing, shipments to the U. S. have de-clined. Malaysia’s logs go mostly to Japan. Itslumber goes to Britain, Australia, and SouthAfrica. With sufficient capital investment itcould develop immense lumber and plywoodindustries.

Indonesia, which has a larger sawmill indus-try than either the Philippines or Malaysia,now exports little timber or processed products.With the largest potential supplies of hardwoodin Asia, Indonesia could become a dominantlumber and plywood producer. In view of pasteconomic and political trends, such develop-ment remains problematic.

Thailand, Burma, and India, as well as In-donesia, export large volumes of teak both aslogs and lumber, of which about 1 percentcomes to the U. S. Aside from being a valuablecabinet wood, teak is durable and noncorro-sive to metal, thus suitable for numerous spe-cial purposes. Trees girdled 2 years prior tofelling can be floated downstream during therainy season from otherwise inaccessible areas.Though large acreages in southeast Asia arebeing managed or planted to teak, U. S. im-ports are likely to rise more slowly than forother woods.

As should be clear, much of the timber har-vested in southeast- Asia is processed outsidethe countries of origin. In 1962 Japan imported1.5 billion board feet of hardwood logs, two-thirds from the Philippines and the remainderfrom Malaysian Borneo. These comprised

roughly 55 percent of Japan’s hardwood logconsumption; the remainder was cut from do-mestic birch, beech, white oak, and maple for-ests. In hardwood lumber output Japan issecond only to the U. S., and it has the world’slargest hardwood plywood industry.

Japanese firms benefit from the geographicconcentration of their plants and a large homemarket that provides ready sales for byprod-ucts and lower grades. They have their ownsources of equipment and repair and a supplyof trained labor. Japanese vessels carry freightat least one-third cheaper than ships of lessdeveloped Asian countries (1).

Japan consumes most of its production forhousing, packaging, and furniture. It exportsonly 4 percent of the hardwood lumber and 23percent of the plywood; about half the lumberand two-thirds of the plywood exports go to theU. S. The home market will probably increasemore than 50 percent in the next 15 years,thus absorbing the bulk of future increases inprocessing capacity. It seems likely that de-velopment of other Asian nations will reduceJapan’s advantages.

In recent years increasing proportions of thesoutheast Asian log exports have gone to Ko-rea, Okinawa, Hong Kong, Singapore, and Tai-wan. These newcomers to manufacturing-in-transit are just beginning to benefit from large-scale operations. Since their home markets aremore limited than Japan’s, they rely heavilyon exports. Some 3 to 4 percent of southeastAsian logs, principally from Malaysia, areshipped to Europe; another few percent go tothe U. S. As Asians become even more efficientin manufacturing, shipments of logs to the U. S.can be expected to decline, and those of lumberand plywood to increase.

Imports From Africa May IncreaseHardwood harvesting has developed as rap-

idly in West Africa as in southeast Asia. Heavyinvestments by English, French, and Belgianlogging and importing concerns, increased ac-cessibility, and wider species acceptability areresponsible for the very rapid growth. SinceWorld War II exports of logs alone, mostly toEurope, have increased fourfold. Volumeshave roughly exceeded a billion board feet inrecent years, mostly from Gabon, the IvoryCoast, Ghana, Nigeria, and the former French

13

Congo. In addition, some 200 million boardfeet of lumber and 240 million square feet ofplywood and veneer were shipped annuallyin the past several years, and the rate is ris-ing. So far, only 1 to 2 percent of the logs andlumber are shipped to the U. S.

Exports come primarily from the rain andsemideciduous forests that extend severalhundred miles inland along the Gulf of Guineafrom Liberia across southern Ghana and Ni-geria to Cameroun (fig. 12 i. A larger belt,200 to 500 miles wide, continues to the centerof the continent, straddling the equator fromCameroun and the mouth of the Congo to thehighlands of east Africa. The total timberedarea is about 340 million acres, or roughly thehardwood acreage of the Eastern U. S.

Though one-fourth of the forest area is pres-ently regarded as accessible, only a portion ofit is currently being logged. With improve-ments in transport the accessible area is rap-idly being enlarged.

In virgin stands the species number in thehundreds and the merchantable trees of anyone species may average from 0.1 to 10 peracre. Species distributions are quite erratic.Khaya and Entandrophragnia species, once invery heavy demand as African mahogany, areindeed sparse. Where they occur at all, avodire,

..r”Y” lr ..-

okoume, obeche, limbo, azobe, and niangon arefar more abundant. With 70 percent of the cutnow in soft veneer woods, a sizable proportionof the virgin timber can be marketed.

Much of the land in populated areas is sec-ond-growth forest of soft, fast-growing speciesthat invade abandoned fields. Some of thesespecies are suitable for plywood. The originalspecies reestablish themselves only slowly inthe second-growth stands.

Some parts of the forest have been loggedmore heavily than others (fig. 13 ). The west-

Figure 13.-The relation of loggingsources varies widely intries.

to f o r e s t re-African coun-

\ i

F i g u r e 12.-Hardwood forests in Africa are largely confined to a belt IO” oneach side of the equator and west of the eastern highlands.

14

ern sector from Guinea to Nigeria has only 14percent of the area but produces 54 percent ofthe timber. The countries on the coast fromCameroun to Angola have 23 percent of thearea but 32 percent of the cut. The remainingcentral African section has 63 percent of theland, but cuts only 14 percent of the total.These relationships give a good indication ofthe likelihood for expanding logging.

In particular, exports from the two formerBritish colonies in West Africa, Ghana and Ni-geria, may well be at their peak. Output inboth is at five times the rate of the immediatepostwar years, and modernization of logginghas been particularly rapid. Lumber and ve-neer production has expanded in spurts andnow consumes almost half the timber harvest.Plywood manufacture has also started.

The huge increase in log exports since thewar has resulted partly from clearcutting ofareas being converted to other uses. An in-creasing amount is obtained from selectivelogging in the permanent forest reserves. In adecade the entire forests of both countries areexpected to be made accessible and to comeunder exploitation.

Nearly all of the 400 million board feet oflogs that Ghana and Nigeria exported in 1962went to Europe. Italy was the largest purchaserfrom Ghana, and West Germany from Nigeria.Though both Ghana and Nigeria belong to theBritish Commonwealth, England gets only afourth of their logs. The lumber and plywood,however, go chiefly to Britain, because oflarger tariffs in Common Market countries. Inrecent years exports from Ghana were disrupt-ed by the government’s attempt to controltrading through a timber marketing board.Ghana was forced to give up the arrangement,but not before much of the trade went toother African countries (2).

Gains in log exports from either Ghana orNigeria are not likely. It is probable that bothwill make a determined effort to increasemanufacture of lumber and plywood. Theywould thus be able to mill low-grade portionsof trees for the rapidly growing home market,and simultaneously expand their exports ofquality products. But lumber and plywoodsales face formidable European tariffs. If Eu-ropean trade restrictions are not eased and the

British market cannot absorb increased im-ports, African manufacturers may try to shiftexports to the U. S.

Exports from the French-speaking countrieshave potential for large-scale gains. Cameroun,Gabon, and Congo (Brazzaville ) have been ex-panding log exports since the early 1950’s. TheIvory Coast to the west has more recently be-come a major exporter. Still largely underde-veloped as timber exporters are the CentralAfrican Republic, Congo (Brazzaville ). andCongo (Leopoldville I .’ All but Congo ( Leo-poldville 1 are former French colonies. Gabongets 70 percent of its export earnings fromtimber, Congo (Brazzaville) 58 percent, andthe others lesser but still important amounts.

Generalizations about the economic potentialof African forests are difficult to make. Thestanding volume of species in current demandis declining rapidly within the more accessiblelocalities. But areas not yet exploited are sev-eral times larger than those that have becomeexhausted. Surveys in several zones of Congo( Brazzaville 1 and the Central African Repub-lic found commercial timber over vast areas.Logging is still largely in the coastal zone andin areas adjoining the railway lines, but per-mits for more remote regions have recentlybeen requested.

The large logging concerns, nearly all Eu-ropean, are highly mechanized. The Frenchareas cut about the same volume of logs as theEnglish, but produce one-third the lumber.

A number of plywood plants operate alongthe Coast. Most are small, but one in Gabon,started in 1950, is among the largest in thetropics.

Moving production to the interior imposeslarge financial and organizational burdens onthe governments and on the logging enterpris-es for new transport and other facilities. Fromstudies in Gabon, more than 1,200 miles ofroads, including a high proportion of roads forheavy traffic, will be required for commerciallogging of the next large block of forest. Tolog the interior Congo basin will require large-scale improvements along the Congo and Uban-gi Rivers.

In 1960 and 1961, 90 percent of the log tradeof the four countries was with Europe---40

‘Congo (Brazzaville) and the Central African Republic were parts of the former French Equatorial Africa; Congo (Leopold-ville) was the former Belgian Congo.

15

percent with France, and 45 percent withother countries of the Common Market. Thesmall lumber trade is nearly all with Europe.While plywood from Gabon is exported main-ly to Europe, sales within Africa and to NorthAmerica are also important. Gabon’s veneersgo mostly to Europe, but the larger volumefrom Cameroun and Congo (Brazzaville) isvirtually all consumed in Africa.

Greatly expanded exports from French-speaking Africa are likely, but most of the ad-ditional output may go to Europe. Europeandemand for veneer logs may increase 2 billionboard feet by 1975. All will have to come fromthe tropics, and will have to include speciesnot now considered merchantable. Large capi-tal expenditures in African logging and trans-portation facilities will have to be made.

At the same time, these countries will strivefor more local manufacture of lumber, ve-neer, and plywood. The upshot is likely to beextensive changes in tariffs and trade pat-terns, or else a unified West African policy forforcing the timber trade in manufactured prod-ucts, or perhaps both.

Committed as they are to the Europeanmarket, the West African nations are unlikely

to contribute much to U. S. supplies in thenear future. Nonetheless, only a small diver-sion of their trade would largely increase U. S.imports. Such a diversion could be broughtabout by favorable U. S. prices or less than ex-pected growth of the European market.

Latin American Exports Unlikelyto Rise Soon

The potential of Latin America to enlargehardwood exports to the U. S. within the nextdecade is slight. Most of the accessible timber-land has been high-graded or converted to ag-riculture. To make the vast forests of the Ama-zon basin and the Guinea highlands operablewill require enormous expenditures. In mostcountries domestic consumption is keeping pacewith increases in output. Restrictions on logexports have become numerous, but develop-ment of local wood processing industries isslow.

The principal sources were the forests thatonce covered the West Indies and CentralAmerica (fig. 14). Though mountainous ter-rain and wide variations in rainfall resultedin many timber types, the majority of fine

GENERAL FOREST TYPES

WET DEClDUO”S IRAIN)

COLUMBIA\

0 ‘90 MILES 1.000

EQUADO

Figure 14.-Latin American areas of significance to the U. S. timber trade sur-round the Caribbean and extend into the Amazon basin.

16

woods came from moderately moist areas lessthan 2,000 feet in altitude and with 40 to 80inches of rain annually. Only a few specieswere merchantable-mahogany, cedrela, gua-nacaste, rosewood, prima Vera, and lignum vi-tae-and they were always sparse. Much ofthis land is now cleared, and produces most ofMiddle America’s sugar cane, cotton, sisal, andbeef.

Mahogany is still the mainstay of the exporttrade. Botanically there are three species whosewood is of nearly equal quality. Swietenia ma-hogani, found chiefly in the West Indies, is nowlargely exhausted. Swietenia macrophylla, thepresently dominant commercial species, rangesfrom the Yucatan Peninsula of Mexico souththrough Central America into Columbia andthe western Amazon basin. Swietenia humilisis a minor species found in less moist sitesalong the Pacific Coast from southern Mexicoto Costa Rica 125).

Rain forests cover a larger area than themoderately moist forests, but have less valu-able species-cativo, crabwood, Santa Maria,virola, and balsa. Cleared alluvial areas in thisforest produce bananas, cacao, and abaca.

The high elevations of Middle America havelargely been cleared for coffee and crops need-ed to sustain the dense populations. Though theremaining highland timber includes pines, oaks,laurels, and other temperate-zone species, mostof the wood cut is consumed locally.

The remaining areas of high-grade hard-woods in Mexico and Central America appearto be undeveloped pockets along both coasts.They are not easily accessible by water, andlarge investments in roads or other facilitieswill probably be required to extract the timber.

Prior to 1940 the timber in the West Indiesseemed inexhaustible. After 1945 loggers notonly cut selected species heavily for exportbut took most of the rest for domestic use-apractice that had developed when the warshut off shipments from the U. S. The resultwas the liquidation of almost all accessibleforests and the curtailment of exports. Clear-ing of lowlands throughout the islands is nowalmost complete.

Forest types of western South America aredetermined by the Andes Mountains. Exten-sive forests occur on both moderate and verywet lowland sites along the Caribbean and Pa-cific coasts of Columbia and extend down to

Ecuador. The high-altitude forests of the Andeshave been extensively cleared from Columbiato Bolivia for coffee and other agriculture.Most of the remnant has been high-graded.

From the eastern slopes of the Andes, downthe central Amazon valley to the Braziliancoast, is the almost unexplored Amazon forest.Dense rain forest also extends north across theGuiana highlands to coastal British Guiana,Surinam, and French Guiana, and apparentlyincludes virola, crabwood, and greenheart,largely untouched. Timber in the Amazon andGuiana forest, which has only recently beensurveyed, is apparently not so large or denseas that in the coastal forests or in Africa orsoutheast Asia I1 XI. Southern South Americahas broad areas of drier forest, and ribbons ofdense stands along the coast and in the Andes.It contributes a small volume of hardwoodlogs and lumber to international trade.

Recent hardwood trade has been influencednot only by resource trends but by the diver-gent trade policies of the various countries(fig. 15 ).

Figure 15.-Cuvent use of Latin Americax forestsis high relative to acwagc. except incountries with land in the Amazonbnsi?l.

Mexico has sharply cut log exports by favor-ing processing in local plants. Though new saw-mills have been built in the past 10 years, lum-ber exports have also dropped. The increasedoutput is being absorbed by home markets thathave expanded with Mexico’s rapid economicgrowth. Fifteen years ago Mexico suppliedmost of the U. S. mahogany imports; it nowfurnishes less than 20 percent. Several largeareas now inaccessible are to be opened up for

17

logging, but most of the cut will be used in-ternally.

British Honduras, for years a principal sup-plier of hardwood logs, has also restricted ex-ports, but has not achieved much increase inproduction and export of lumber. The colonyis small and most of its forests are accessibleand presently being exploited. In Guatemala,lumber production has also declined despite aban on log exports. The country has sizableareas of inaccessible timber.

Costa Rica was an important log source un-til 1953, but now saws most logs for domesticmarkets. In recent years lumber has come tothe U. S. from sawmills built jointly by Ameri-can and Costa Rican businessmen. Untappedresources of high-grade hardwoods promisefuture increases in trade.

In contrast to other countries, Nicaragua hasbeen increasing shipments to the U. S. Since1957 it has been the major supplier of mahog-any logs. More recently, it has begun to ex-port lumber. Both Nicaragua and neighboringHonduras have substantial volumes of unex-ploited timber, but will require large-scale in-vestments to log it. Less than a fourth of theforests in either country are presently acces-sible.

In Panama transportation improvementshave opened up formerly inaccessible areas andmade possible sizable log shipments-chieflymahogany-to the U. S.

In the past decade Columbia has become thebiggest single exporter of logs to the U. S.,supplying 27 percent of the total. Columbiaalso has rapidly expanded sawmill production.It now cuts 1.5 times as much hardwood lum-ber as all of Mexico and Central America, andsubstantial amounts are sold to the U. S. Theharvest is mostly cativo and other hardwoods;relatively little is mahogany. For the immedi-ate future Columbia has greater potential forexpanding shipments to the U. S. than do otherLatin American countries.

Considering the extent of the forest re-sources, surprisingly little timber is cut for ex-port in the rest of northern South America.Shipments from Brazil, long a small exporter ofmahogany logs from the Amazon interior andof mahogany and other cabinet lumber, havebeen slow to develop. Venezuela, British Gui-ana, Peru, and, in the last few years, Ecuador,have shipped only small quantities of mahog-

any and other logs and lumber to the U. S. Logshipments from other South American coun-tries are practically nil. Ecuador is the majorsupplier of balsa, for which demand has beendecreasing; from 1950-1954 to 19581962 ship-ments dropped one-third.

Future developments in Latin America arehighly problematical. Mahogany from the up-per Amazon basin may offset decreasing ship-ments from Central America. South Americanmahogany has harder texture than CentralAmerican, grows larger, and once sold forhigher prices (301. But for Amazon mahoganyto become available in large quantities will re-quire enormous outlays that are unlikely tobe incurred for timber alone. Columbia, Ecua-dor, Peru, and Bolivia have been jointly build-ing a road system to open up vast Amazonareas for general development. The system willtake years to complete, but should make ap-preciable timber available for export.

The two factors that have let southeast Asiaand West Africa expand timber cutting rapidlyare generally lacking in Latin America. First,few stands have as much as a fourth of thevolume in merchantable species. Markets haveyet to be developed for soft veneer species ofthe kind that predominate in the exports of theother tropical regions. Second, the light cutsper acre and other difficulties have preventedmechanization. Thus the returns from timberharvesting have discouraged both local andforeign investment.

Canadian Shipments to DeclineBefore and shortly after World War II Cana-

da was the principal source of the then muchsmaller volumes of U. S. hardwood imports.Recently shipments have declined in the faceof competition from Japan and elsewhere.

Imports of Canadian logs have dropped toone-third those of the early 1950’s. Similarly,lumber shipments have fallen from almost 200million board feet in 1950 to about 125. ThoughU. S. sales of Canadian plywood expanded inthe midfifties, they have since declined. Cana-da’s share of U. S. veneer imports has shrunkfrom 96 to 49 percent.

Imports from Canada will continue to besubstantial for some time, but the trade is like-ly to decline further. Canadian production ofhardwood lumber, like that of the United

18

States, declined substantially in the last de-cade. Harvest of saw logs for all purposes in1961 and 1962 was less than half the record setin 1952. Though current rates of cutting areless than 1 percent of the resource, the besttimber is already gone.

European Exports to Stay Small

The cut of European hardwoods, which rosein the postwar period. has nearly all been con-sumed domestically. U. S. imports of European

logs have virtually ceased. Lumber and veneerimports have increased, but volume is small.The biggest lumber suppliers are Denmark,which exports maple, birch, and beech, andWest Germany, which ships cabinet woods cutfrom tropical logs.

Finland was formerly a substantial supplierof plywood to the U. S., but her sales havebeen hurt by Japanese and other competition.Recently the Finns have sought to regain mark-ets by manufacturing exterior-grade birch ply-wood (19j.

SUMMARY

Once a substantial hardwood exporter, theU. S. now imports a significant portion of itsrequirements. Since 1947-48, plywood pur-chases-primarily from Japan and other Asiansources-have multiplied fortyfold to 60 per-cent of total consumption. Lumber imports,from tropical countries and Canada, have in-creased 39 percent, or to 5 percent of the U. S.market. Log imports remain erratic.

A major reason for the increased hardwoodimports has been the growing shortage of U. S.supplies of high-quality timber. The resultinghigh prices, and other factors such as highwages, have severely disadvantaged Americanmanufacturers.

Elsewhere, potential for production of finehardwoods is rapidly expanding. In both south-east Asia and West Africa large new areas oftropical forests have been made accessible. Inlogging, many firms have mechanized to agreater extent than in U. S. hardwood regions.Tropical lumber and plywood production hasalso made significant gains. Large areas oftimber will become accessible in future dec-

ades, and desirable species can be rapidlygrown in plantations.

Though Asian and African timber firms arestill preoccupied with the rapidly expandingmarkets in Europe and Japan, they will beable to ship large quantities to the U. S. ifprices are favorable. U. S. plywood and lum-ber imports are now generally processed fromtropical timber in Japan and other industrial-ized countries. In the future they may wellcome directly from mills in the tropical coun-tries where the timber is harvested. LatinAmerica’s long-range potential for increasedtrade depends on government policies and re-gional development.

Thus, rapidly increasing imports of hard-wood plywood and lumber may be expected incoming decades. The availability of large quan-tities of foreign products at competitive priceswill limit sales of U. S. hardwood manufac-turers and discourage expansion of processing.Programs to grow U. S. hardwoods must bebased on anticipated stumpage prices not great-ly exceeding those currently obtained.

19

1. Anonymous. 9.1963. The Philippine plywood industry.

Natl. Hardwood Mag. 36( 12 ) : 60-61, 63-65, illus.

2.1963. U. K. market in 1963. South. Lum-

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10.

3. Aubreville, A.M.A.1960. Le potentiel des for&s tropicales

dans l’economie mondiale du boisd’oeuvre ( feuillus ). Fifth WorldForestry Cong. Proc. v. 2, pp. 1069-1075, illus.

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4. Bartlett, H. H. 12.

1956. Fire, primitive agriculture, andgrazing in the tropics. In W. L.Thomas, Jr., ed., Man’s role inchanging the face of the earth, pp.692-763. Chicago : Univ. ChicagoPress.

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5. Buckle, D. H.1959. Timber operations in West Africa.

Unasylva 13 : 3-11, illus.15.

6. Cermak, F. I., and Lloyd, A. H.1962. Timber transportation in the trop-

ics. I.-Short distance or minortransportation. Unasylva 16 : 75-103, illus. II . -Long-distance ormajor transportation. Unasylva16 : 140-160, illus. III.-Transpor-tation by water and air: loadingtimber. Unasylva 16 : 207-218,illus.

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7. Economic Commission for Africa and Foodand Agriculture Organization.

1964. African timber trends and pros-pects. Preliminary report on west-ern Africa and Equatorial EastAfrica. 212 pp. Addis A b a b a :United Nations.

8. Economic Commission for Europe.1963. Report to Secretariat on the trade

in tropical wood in Europe up to

1962. ECE Tim working paperNo. 7, 41 pp. Geneva: United Na-tions.

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18.

19.

20

Economic Commission for Latin Americaand Food and Agriculture Organization ofthe United Nations.

1963. Latin American timber trends andprospects. 117 pp. , illus. N e wYork : United Nations.

Food and Agriculture Organization of theUnited Nations.

1956-63. Yearbook of forest productsstatistics. Rome : United Nations.

1958. World forest products statistics. Aten-year summary, 1946-1955. 197pp., illus. Rome: United Nations.

1958. Commodity report - hardwoods.Unasylva 12 : 183-191.

1960. World forest inventory, 1958. 137PP.1 illus. Rome: United Nations.

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1964. Expansion of exports of forestsproducts from developing coun-tries. Unasylva 18: 3-11.

and Economic Commission forAsia and the Far East.

1961. Timber trends and prospects inthe Asia-Pacific region. 224 pp.,illus. Geneva : United Nations.

Europe.and Economic Commission for

1964. European timber trends and pros-pects-a new appraisal 1950-1975.233 pp., illus. New York: UnitedNations.

Haig, I. T., Huberman, M. A., and Din, UAung.

1958. Tropical silviculture. v. I. FAOforestry and forest products stud-ies No. 13. 190 pp.. illus. Rome:United Nations.

Heinsdijk, D.1961. Forest survey in the Amazon val-

ley. Unasylva 15: 167-174, illus.

Jones, A. E.1964. Plywood business booms-United

Kingdom. Forest Indus. 91 C 1) :118, 194.

20. Josephson, H. R.1964. Legislation relating to foreign

trade in forest products. Paper pre-sented at ann. meet. of the Appl.Sect., Sot. Amer. Foresters, Feb.7-8, 1964, Asheville, N. C.

21. Le Ray, Jean.1963. Forest roads in the tropics. I.-

General characteristics, roads oncompacted soil, and planning foralignment. Unasylva 17: 89-112,illus. II.-Construction works, useand maintenance of equipment.Unasylva 17: 145-167. illus.

22. Meyers, R. M.1963. The utilization of Philippine ma-

hogany in the United States. Econ.Bot. 17: 233-237, illus.

23. Nyyssb’nen, Aarne.1962. Aerial photographs of tropical

forests. Unasylva 16: 3-12, illus.

24. Putnam, J. A.1964. The plight of southern hardwood

resources. Forest Prod. Jour. 14:319-321.

25. Record, S. J., and Hess, R. W.1943. Timbers of the new world. 640 pp.,

illus. New Haven : Ya le Univ .Press.

26. United States Bureau of the Census.1946-1963. United States imports of

merchandise for consumption. Re-ports FT 110.

27. United States Forest SerlTice.1965. Timber trends in the United States.

U. S. Dept. Agr. Forest ResourceRpt. 17. 235 pp., illus.

28. United States Tariff Commission.1959. Hardwood plywood-report on es-

cape-clause investigation No. 77under Section 7 of the TradeAgreements Extension Act of 1951.as amended. 63 pp.

29. Westoby, J. C.1962. Forest industries in the attack on

economic underdevelopment. Un-asylva 16: 168-201. illus.

30. Williams, Ichabod.1963. Peruvian mahogany. Natl. Hard-

wood Mag. 37( 8 ) : 38-39. 44-45,47. 51.

21

APPENDIX

Table 1.-U. S. imports of hardwood logs. 1946-l 963

source

Canada

Latin America

Mexico

West Indies

Central America

South America

1946 1947 1 1948 ( 1949 / 1950 ] 1951

4.6 9.2 11.3 11.1 16.4 19 2

7.7 7.0 2.6 2.2 2.8 3.3

.5 .4 .6 .2 6 .4

15.1 21.7 30.1 16.2 25.1 20.8

3.1 5.1 3.4 2 6 1.6 4.1

(In million board feet)

1 1952 1953 1954 1955 1956 1957 1958

13.2 17.6 11.6 13.2 13.1 8.7 6.3

1961 1962 1963

8.2 5.6 6.0 8.1

2.8 1.9 1.3 .7 2.2 2.2 1.0 (‘) .l .l .1.4 .4 .2 .4 .3 .6 .2 .l .l .1 .l

20.8 17.0 11.9 13.8 11.5 10.2 14.3 4.7 6.5 7.2 3.19 4 6 9.5 13.2 19.5 16.4 15.6 19.6 13.5 21.9 20.3

Total Latin America 26.4 34.2 36.7 21.2 30.1 28.6 24.9 23.9 22.9 28.1 33.5 29.4 31.1 17.8 24.4 20.2 29.3 23.6_

Asia

Japan (‘) (‘I (‘1 (‘) (‘I (‘1 (‘1 (‘I .3 (‘) (‘1 (‘)K Philippines .l 2.0 11.6 7.6 20.7 40.8 20.6 32.5 29.5 33.8 35 1 32.6 17.6 21.4 16.2 9.0 12.7 7.0

Other Asia .l .l .l (‘1 .l .2 .l 1.4 2.1 4.7 3.3 1.4 1.0 4.6 3.6 .7 3.0 1.8

Total Asia .2 2.1 11.7 7.6 20.8 41.0 20.7 33.9 31.6 38.5 38.4 34.0 18.6 26.3 19.8 9.7 15.7 8.8

Africa

West Africa (formerly British) 27.6 30.3 34.1 13.6 36.3 31.3 14.9 22.7 14.8 16.8 21.5 7.8 8.0 7.4 7.8 4.2 3.8 4.3

West Africa (formerly French) 1.1 4.1 2.4 .5 2.0 3.3 1.2 12.7 11.3 22.1 13.2 9.7 9.5 11.8 17.4 8.0 6.1 7.9

Other Africa 1.2 3.7 5.7 2.0 3.1 3.7 1.6 .8 .4 .6 .8 1.1 .l 2.3 2.1 .5 1.0 1.0

Total Africa 29.9 38.1 42.2 16.1 41.4 38.3 17.7 36.2 26.5 39.5 35.5 18.6 17.6 21.5 27.3 12.7 10.9 13.2

Europe .l (‘1 (‘1 (‘1 (‘) (‘1 .l (‘1 1 (‘1 (‘1 .2 (‘) .6 .l .l (‘1 (‘)

Other (‘) .l . l (‘) (‘) .l (‘) (‘) . .4 .4 .3 .1

Grand total 61.2 83.7 102.0 56.0 108.7 127.1 76.7 111.6 92.6 119.3 120.5 90.9 73.6 72.8 80.2 48.7 62.2 53.8

’ Negligible.

Because of rounding, values may not add to totals.

._I

Table 2.-U. S imports of hardwood lumber , 1946-I 963

(In million board feet)

Source

Canada

Latin America

Mexico

West Indies

Central America

South America

1 1946 ) 1947 1 1948 ] 1949 1 1950

170.2 166.5 170.6 94.7 187.3

10.6 12.8 12.5 8.8 16.5

1.3 1.5 .2 . l .l

8.3 16.9 9.1 3.8 3.4

14.0 10.7 8.3 9.9 13.5

Total Latin America 34.2 41.9 30.1 22.6 33.5 43.5 33.9 31.7 23 5 26.7 31.0 37.1 38.2 43.3 51.4 45.4 56.5 60.6

Asia

Japan

Philippines

Other Asia

.3 .7 9.2 8.0 7.7 16.1 38.8 52.7 62.8 40.2 48.4 72.4 52.9 42.5 52.0 41.0.4 .6 9.0 15.2 29.5 39.6 48.4 42.7 40.0 47.1 47.4 39.0 44.8 51.3 37.2 30.6 32.6 30.6.2 1.3 .6 .5 .5 .6 1.3 1.5 .6 4.9 6.1 12.3 6.1 14.3 14.5 14.4 21.7 22.0

Total Asia .6 1.9 9.9 16.4 39.2 48.2 57.4 60.3 79 .4 104 .7 116 .3 91.5 99 .3 138 .0 104 .6 87.5 106.3 93.6

) 1951 1 1952 1 1953 1 1954 ) 1955 1 1956

154.5 115 1 127.6 92 .1 117 .0 103 .0

16.5 13.9 10.9 5.5 5.6 3.8.2 3 .4 .l .2 .3

5.5 4.2 5 .2 5.3 7.9 11.8

21.3 15.5 15 2 12.6 13.0 15.1

I

1957 1 1958

105.6 85.9

4.8 4.3

.2 .l

11.8 9.7

20.3 24.1

T&v960T&v960 1 1961 1 1962 1 1963

118.6 110.0 94.8 122.9 123.4

3.4 4.7 4.8 7.4 4.3

.l (‘) (‘1 .2 (‘)13.1 14.3 14.0 16.5 15.4

26.7 32.4 26.6 32.4 40.9

AfricaWest Africa (formerly British)

West Africa (formerly French)

Other Africa

Total Africa

Europe

Other

Grand total

.l 3.7 5.2 2.2 4.7 6.5 3.5 6.2 5.7 7.8 11.6 4.4 4.1 10.5 9.5 8.2 10.5 13.9

(‘1 (‘1 .l .l .3 .3 1.1 .9 .4 1.2 .6 .5 1.1 2.8

.l .2 .4 1.9 2.0 1.1 2.2 2.6 2.8 5.4 1.8 2.3 2.9 2.8 1.5 2.2 .9

.l 3.8 5.5 2.6 6.6 8.5 4.7 8.5 8.6 10.9 18.1 7.1 6.8 14.6 12.9 10.2 13.8 17.6

(‘) .4 .6 1.1 .5 .l 1 .l .2 .3 .l .9 .8 .3 .7 .8

.l .4 .4 .2 .3 .2 4 .3 .l .I .2 .4 .5 .7 .9 1.0 1.1 .9

205.2 214.5 216.4 136.9 267.5 256.0 212.0 228.5 203.8 259.5 268.8 242.0 230.8 316.1 280.6 239.2 301.3 296.9

’ Negligible.

Because of rounding. values may not add to totals

Table 3.-U. S. imports of krrdwood plywood. 1946-l 963

(In million square feet, surface measure)

~~Source ---j7 [ l&+949 j~l950 1955 1956 1957 1 ( 1963l_TH51 j-1952- 1 , 9 5 3 / 1954 1 1 1 ‘““8 [ 1959jl960 I1961 1 1962

Canada 8.2 22.9 39.5 16.8 50.0 47.1 57 1 50 8 71.1 99.3 81.2 64.4 42.4 6 0 . 2 4 3 . 0 42.1 56.6 71.9

Latin AmericaMexico 1.9 2.7 .8 .4 .ti .3 7 1.3 3.2 3.6 .4 1.8 6.0 8.6 2.5 1.4 1.3 1.2

West Indies (‘1 (‘1 .I .2 (1) .l

Central America 1 1.9 2 1.4 9 1.7 .6 4.4 1.7 2.5 .I 1.2

South America .7 .l .9 .7 :5 .4 1.6 2.6 4.5 4.3 3.9 3.9 5.5 5.2 16.7 9.5 13.9 13.7 16.4

Total Latin America 2.6 2.8 1.7 1.1 6.0 1.9 3.4 7.7 7.7 8.8 5 3 9.2 11.8 2 9 . 7 1 3 . 8 17.8 15.7 18.8

AsiaJapan (‘) .9 .3 3 7 17.3 105.0 289.0 428.6 527.2 679.8 669.6 810.9 688.3 660.5 740.3 699.1

% Philippines (‘) .l .3 (‘1 .l .5 1.5 9.8 14.9 33.2 97.4 213.6 118.8 153.4 214.4 246.7

Other Asia (‘1 .l .l .8 1.2 .8 1.4 4.6 27.3 5 8 . 5 5 0 . 0 148.1 314.1 442.2

Total Asia (‘1 1.1 .6 3.7 17.5 106.3 291.7 439.2 543.5 717.6 794.3 1,083.O 8 5 7 . 1 962.0 1,268.8 1,388.0_

AfricaWest Africa (formerly B r i t i s h ) .l (‘I 1 (‘1West Africa (formerly French) . (‘1 .5 (‘)Other Africa (‘1 .2 .6 3.5 5.3 10.4 13.8 10.9 15.6 25.8 16.7 14.6 13.8 9.1

- -Total Africa (‘1 2 .6 3.6 5.3 10.9 13.8 11.0 15.6 25.8 16.7 14.6 13.8 9.1_

Europe 13.6 11.5 1.1 .7 1.5 3.3 6.0 51.0 51.7 62.5 52.3 40.4 46.3 1 2 5 . 1 8 3 . 2 58.6 83.7 92.4

Other (‘1 6.2 6.9 9.3 3.9 .9 4.0 .2 2.4 .4 (‘1

Grand total 24.4 37.2 42.3 19.7 58.1 56.3 84.6 219.4 433.7 627.6 705.4 846.5 911.3 1,327.8 1,014.O 1,097.5 1,439.0 1,580.2

’ Negligible.

Because of rounding, values may not add to totals

..-I

Table 4.-U. S. impwts of hardwood I)CW?~T. 1946-l 963

(In million square Ec*et, surface mcasurc)

SOLIKe

Canada

Latin America

Mexico

West Indies

Central America

South America

1 19i6 1 lg47 -1 194+49

27.6 44.8 53.2 174.2

1 . 0

(‘)

(‘1 .I .l

7 1950(151! 1952 1 1 9 5 3 1 l954.1 1 9 5 5 ( 19j&l9wj r195i

348 .5 3965 462 .4 511 .7 .524 1 674 .6 621 .0 373 .7 455.6

1960 1961 1962 1963

559 .9 472 .3 516 .0 638 .4 684 .6

(‘1 .3 (‘1 2.1 6.1 7.3 4.8.2 .3 .4 .4 .5 .4 .3

2.3 1.4 5.3 .6 .3 (‘1 4.1

(‘1 .6 .l 0 (‘1

1.3

.3

5.6

4.3 5.2 5.8 3.5 1.7

.3

6.2 5.9 8.8 16.9 14.3.2 10.3 11.3 13.0 22.3 47.2

Total Latin America (‘1 1.0 .l .l 2.3 8.2 6.0 1.0 2.5 6.9 7.7 9.2 7.4 21.1 22.4 27.6 42.7 63.2

AsiaJapan (‘1 .3 .5 2.0 .6 .3 .3 .3 3.3 7.4 82.2 225.4 19.9 1.9 5.7 3.9Philippines .l .3 21.0 28.6 49 7 51.4 69.7 70.7 174.1 205.0 223.7 295.6 391.0Other Asia (‘) .l 1.2 1.5 .l .5 .3 .3 11.3 13.0 60.1

~~-Total Asia 0) .3 .6 2.0 .9 21.3 29.0 51.2 56.2 77.2 153.4 399.8 225.2 236.9 314.3 455.0_.

AfricaWest Africa (formerly British) 2.4 6.0 1.9 3.6 .8 .l (‘) (‘)West Africa (formerly French) .2 (‘) .2Other Africa 1.0 25.8 13.9 41.3 2 3 . 2 2 8 . 9 38.9 37.8 29.5 57.5 98.1 96.0 168.7 146.8

Total Africa 3.4 31.8 15.8 44.9 24.2 29.0 38.9 37.8 29.5 57.7 98.1 96.0 168.7 146.8

Europe .l .l .3 .3 7.1 4.6 2.9 4.4 3.1 2.8 5.3 4.7 4.3 25.5 22.8 18.2 68.1 48.2

Other .3 1.6 .7 .l .l .l 1.2 .9 .l .2 .l .l .l . l. (‘)

Grand total 28.0 47.5 54.3 174.9 362.0 443.2 428.0 583.4 584.1 765.4 729.1 502.7 650.4 1,064.l 840.9 894.8 1,232.3 1,397.8

’ Negligible.

Because of rounding, values may not add to totals

Siegel, William C., and Row, Clark.1965. U. S. hardwood imports grow as world sup-

plies expand. South. Forest Expt. Sta., NewOrleans, La. 25 pp., illus. (U. S. Forest Serv.Res. Paper SO-17)

Once a substantial exporter of hardwood, the U. S. nowgoes abroad for 60 percent of its hardwood plywood and 5percent of its lumber. Expanding world timber trade andscarcity of good domestic timber indicate further increasesin imports.