China timber needs to soar 55 percentBOSTON

- China's "timber supply deficit"  will jump 55 percent by 2015, as demand continues to outstrip supply, says a new study. The dramatic growth fueled by China's fast-paced economic expansion will affect the supply, and cost, of lumber around the world.

In 2009, China imported 107 million cubic meters of logs and primary products like lumber, wood panels, woodchips and pulp, the latter used mostly in paper, according to wood industry analysts at Boston-based RISI. By 2015 that number will grow to 182 million cubic meters. China's wood imports already equal the entire timber harvest of  all of Canada, reports RISI.

Gauging increased Chinese demand for timber, increasingly driven by growing middle class consumption of housing and wood furnishings and cabinetry, offers opportunities for companies supplying China's seemingly insatiable appetite for wood by investing in forest plantations in China. RISI also suggests may become a major new trend in timberland investments: offshore investment by Chinese companies in forests and lumber companies overseas.

"Traditionally, China has mostly imported timber in log form," says Robert Flynn, author of the study. "In just two years, from 2008 to 2010, imports of lumber into China more than doubled, and we expect this to continue at a rapid pace through 2015." Flynn said the trend is good news for Canadian lumber suppliers as they currently own a 50 percent market share of lumber imports going into China. "But with this increase in demand, we expect to see other markets looking to capture a bigger share of this business from them," Flynn says.

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