Plantations struggle to keep up with growing wood demand


The demand for wood products is forecast to continue to rise towards 2050, based on a report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

The report estimated that the demand for wood products is forecast to rise by 30 per cent by 2050, mainly driven by sawnwood demand.

Given this increasing demand, the report also estimated the potential area of new plantation establishments between 2020 and 2050 under current and alternative market conditions.

ABARES Chief Commodity Analyst, Peter Gooday said the economic potential for new plantation establishment in Australia report suggests that there will be minimal investment in new plantations over the next 30 years if current economic conditions persist.”

Under current market conditions, ABARES estimates that 4,773 hectares of new hardwood plantations, and 24,009 hectares of new softwood plantations, could be established over the coming decades,” Mr Gooday said.

ABARES estimates that the 24,009 hectare increase in the softwood estate is far below the 200,000 to 250,000 hectares needed to meet growing demand for softwood sawnwood.

“Without a change in market conditions this is expected to lead to a doubling of softwood sawnwood imports to 1.15 million cubic metres by 2050.”

ABARES also found that potential future plantation investment is sensitive to market conditions with changes in exchange rates and required rates of return having a significant effect on the viability of establishing new plantations.

“This highlights the high degree of trade exposure in Australia’s forest sector and the long term horizons typically seen in the industry.”

ABARES data continues to assist policymakers and agriculture, forestry and fisheries industries to develop priorities and shape investments into the future.

This article was first published in R4A.

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