By Darah Hansen, Vancouver Sun; With Files From Postmedia News December 22, 2011
British Columbia stands to be a big winner next year as Canada succeeds in diversifying its export markets for its wood products, according to the Conference Board of Canada.
B.C. wood has gained a significant share of China's wood imports over the past five years, increasing from less than one per cent in 2006 to 14 per cent in the first nine months of 2011, the board said in its report on the wood products industry.
At nearly $1 billion so far this year, the value of wood exports to China was more than twice last year's level for the same period, and is expected to continue to rise over the next five years.
"The China story is definitely a huge deal for B.C. wood producers," said Graham Sheppard, an industry analyst with ERA Forest Products Research.
Approximately 30 per cent of B.C. softwood lumber exports has gone to China in 2011, accounting for more than 95 per cent of Canada's total exports to the country.
Diversification into China, and, to a lesser degree, Japan, comes as Canada seeks to reduce its dependence on its next-door neighbour.
In 2006, 86 per cent of Canadian wood exports were sent to the United States, with B.C. wood accounting for about half the total. So far this year, the national share was 63 per cent. Michael Burt, director, Industrial Economic Trends, cited the fragility of the U.S. economy and endless rounds of litigation over softwood lumber as key reasons for the diversification push.
As a result, profits before taxes will rise to $565 million in 2012 from $283 million in 2011. Extending the forecast out to 2016, profits should almost double again from 2012 forecast levels to $1.04 billion.
http://www.vancouversun.com/business/Asian+demand+resources+good+news+British+Columbia/5897463/story.html
1 comment:
British Columbia is seeing the benefits of the new trading relationship between Canada and China. Nearly $1 billion worth of wood has been exported to China so far this year. This is more than double last year’s level and is expected to rise. About 30 per cent of B.C. softwood lumber exports went to China in 2011. This is a rising number unlike trade with the U.S. In 2006, 86 per cent of Canadian wood exports were sent to the U.S. However, this year this number was only 63 per cent. Profits on wood exports from B.C. before taxes will be about $565 million in 2012 from $283 million in 2011. In 2016, it is predicted that these levels should reach about $1.04 billion. The diversification of trade seems to be working for Canadian wood exports. British Columbia’s wood sector is just one of the profiting sectors after becoming friendly with Asia. If the TPP or any other trade deals go through, similar results may be seen. Clearly, the removal of trading barriers creates more foreign investment.
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