Apr 15, 2009. Japan’s lumber industry, which imports 80% of its supplies, may buy more timber from the U.S., Canada and New Zealand after an increase in export taxes slashed Russian shipments by 55%.

Logs

Japan’s lumber industry may buy more timber from U.S., Canada and New Zealand after Russian supply drops by 55%

Apr 15, 2009. /Lesprom Network/. Japan’s lumber industry, which imports 80% of its supplies, may buy more timber from the U.S., Canada and New Zealand after an increase in export taxes slashed Russian shipments by 55%, as Bloomberg informed Lesprom Network. “Imports from North America and New Zealand will increase as supply from Russia is unreliable,” Akira Sekimoto, general manager at Tokyo-based Sumitomo Forestry Co., said in an interview. The company is the biggest owner of forests in Japan and the nation’s largest builder of houses using timber. Increased demand for North American supplies may help support Chicago lumber prices, which dropped 27% in the past year. Shipments from Russia, Japan’s largest source of logs in 2007, slumped after an export tax increased twice in less than a year to 25% and the country said it planned to boost the duty to 80%. The cost of using alternative timber may force some processors out of business. “We want to revive the domestic timber business but that won’t replace all the current demand for Russian supplies, so imports from other countries will naturally increase,” Toshiyuki Akagi, director at Japan’s Forestry Agency said. Residential building is the main use of lumber in Japan. About half the country’s houses are constructed using wooden posts, beams or paneling, according to the Ministry of Land, Infrastructure and Transport. Russian timber is favored because of its price and strength, according to processors. The trees, often hundreds of years old, supply wood with a smoother texture than lumber from more recent forests in Japan and North America. Imports from Russian dropped to 1.81 million cubic meters in 2008 from 4.04 million cubic meters a year earlier as total timber imports dropped 33% to 5.96 million cubic meters, according to the Forestry Agency. Shipments from North America fell 8.3% to 2.73 million cubic meters and supply from New Zealand rose 3.5% to 842 thousand cubic meters. China’s imports of Russian timber last year fell 28% to 18.6 million cubic meters, according to Tokyo-based trading company Sojitz Corp. In Toyama Prefecture, Japan’s biggest regional importer of Russian timber, about 10% of an estimated 300 processors may go out of business because of the cost of sourcing alternative supplies and retooling machinery, according to Ryoichi Takano, an official at the Wood Industry Association of Toyama. “There isn’t much we can do to cope,” he said. Japan has allocated 500 million yen ($5 million) in the budget year started April 1 to provide assistance for small and medium-sized lumber processors. Russia’s export tax on unprocessed timbers increased to 25% last April after rising to 20% in July 2007 from 6.5%, Russia’s Federal Forestry Agency said. Plans to further raise the rate to 80% in January were delayed by up to a year by the government. Sojitz, Japan’s second-largest timber importer, in 2006 established a wood veneer processing venture in the eastern Russian city of Komsomolsk-on-Amur with Flora Joint-Stock Co. The project is yet to start production amid uncertainty over export tax levels. Processing wood in Russia for shipment to Japan “won’t be competitive” without tariffs of 80%, Satoru Yasuda, a marketing department manager at Sojitz said.