Distributors scramble as foreign lumber market changes
By Joshua Sinason
October 15, 2009 | 7:00 pm CDT

The very last supply of England's Honduras mahogany was used to restore the prince's favorite sailboat. Now, you may think that what happens there doesn't affect you. But once the supply is cut off in one country, there's no reason to believe it won't happen here.

"We've started using sapele and African mahogany," says Jane Wharton of VeneerTech Suppliers. "Our customers seem to like it." This change is just one of the many concessions companies such as VeneerTech have to make when dealing with foreign lumber.

"We tried to get some out of Brazil, but we were completely cut off. It turns out all the Honduras mahogany was bought up by China once it went on the endangered species list." The same thing is happening with Russian birch, among others.

Finding new options

Suppliers are turning to exotic materials such as sapele because supply lines from many South American countries are being cut. Sapele has been a preferred wood for cigar humidors, but in recent years has become a large export of many North African countries. Adding to the cuts in the supply chain, import tariffs are on the rise, increasing the cost of buying foreign lumber and hurting the profit margins of small businesses.

The foreign lumber trade has become increasingly difficult over the years. Arguments among foreign lumber distributors bringing in wood from Africa and Asia through Canada have caused headaches for U.S distributors since the beginning of NAFTA. This culminated in the Softwood Lumber Agreement of 2006, in which the United States tried to stabilize the price of lumber coming in from Canada.

NAFTA results

The results saw lumber sales decrease steadily in the effected areas. The problem is that not only did the agreement cost many people their jobs on both sides of the border, it also caused taxes on foreign lumber to skyrocket. With higher tariffs on foreign lumber and demand increasing, basic economics tells us that this is resulting in higher prices for distributors and small businesses.

On the other side of the coin, the NAFTA agreement makes it more difficult to export U.S. wood. North American white oak and maple are two of the biggest U.S. lumber exports, which have gone down more than 50 percent since the inception of NAFTA in 1994.

With exports on the downslide and importing lumber from Canada becoming increasingly difficult, some distributors are trying to encourage more use of domestic woods. "Ultimately, we really don't feel like we're in competition with foreign markets," says Wharton.

"Recently we substituted North American maple and cherry instead of some foreign wood. The cabinet shop we gave it to liked it so much they started using it regularly," he says. "A lot of times they find the North American woods are stronger." Maple is just one of the domestic woods that have been substituted for foreign species.

Of course, there are some foreign woods that are better suited for certain uses. However, with the foreign lumber situation not looking like it's going to get any better, and U.S. lumber exports at a virtual standstill, it seems as if U.S. consumers may need to adapt to domestic lumber for the foreseeable future.

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