European suppliers dominating softwood imports
Although it is often remarked upon, it is worth checking in on the state of imports of sawn softwood to examine the latest and continuing trends.
It is important to note that imports have been a significant part of the supply of coniferous sawnwood since trade commenced and have always complemented Australian supply.
Annual imports peaked earlier in the decade at 887,517m3.
For the year-ended November 2014, imports were 611,163 m3 and were largely consistent on a proportional basis, with recent import experience.
Other than price, perhaps the most commonly heard comment is that the European suppliers are dominating the import element of the market, having taken over from the mainstay New Zealand and Canadian suppliers. Earlier in the decade, these two countries represented over 80% of coniferous sawnwood imports.
Today imports from non-European countries represent 42.5% of total imports.
The first chart shows imports of sawn softwood from the non-European countries, with total imports overlaid. The chart goes back to the year-ended November 2000, when both total imports and those from the non-European countries peaked.
By comparison imports from European countries have increased significantly over the same period, from 11.1% to 49.0% of the total at year-end November 2014.
While this is a remarkable change in its own right, especially given the history and proximity of the geographic relationship with New Zealand in particular, it may not be the most remarkable factor.
As the chart below shows, countries importing to Australia from Europe have changed over time, driven by a variety of factors that are both global and regional. General economic malaise in Europe has put a dent in demand that has created an excess of supply. That driver appears to have increased European exports, including to countries like Australia and especially from some of the Eastern European nations (Estonia, Lithuania and Poland for instance), which can be observed in the chart.
More and more European countries are exporting to Australia each year. Most of them starting out with relatively small volumes of supply, growing their positions over time. That much is clear. However, there are other factors at play, including the consolidation of major operations into a smaller number of larger corporations. Their balancing of global supply to markets leads to increased international trade.
In some instances, and its is a regular topic of conversation, there is debate about the extent to which price and relative returns play a role in the international trade in European sawn softwood. As this is sometimes a hotly contested topic, we will not explore price specific issues in Statistics Count.
However, it is instructive to examine, at a macro level and one step removed from unit prices, the total value of imported sawn softwood.
The following chart from the FWPA Data Dashboard shows the value of total imports of sawn softwood since December 2010. It shows the value of total imports rising continuously since the end of 2012 or the beginning of 2013, largely consistent with the growth in reported domestic sales.
To go straight to the dashboard and take a closer look at the data, click here.
As the date used to construct the chart is related to the value of imports, denominated in Australian Dollars, it is important to note that the impact of currency exchange rates can be quite significant, as the next item in Statistics Count shows.