Softwood markets across Latin America and the Asia-Pacific are approaching a turning point, according to the latest market report from Global Wood Trends and O’Kelly Acumen.
The report says some of the world’s lowest-cost plantation producers are increasingly linked to major importing markets where domestic supply growth is limited.
“With harvests expected to decline in key exporting regions, China remaining structurally dependent on imports, and Japan nearing peak production, the regional supply balance is likely to tighten through 2035 – creating new risks and opportunities for producers, investors, traders, and wood consumers,” it says.
The ‘Global Softwood Roundwood Supply – Latin America & Asia-Pacific’ report, examines the contrasting market conditions and long-term outlooks of Latin America, Asia, and Oceania.
It says Latin America, Asia, and Oceania. Latin America remain a highly competitive source of softwood roundwood. Brazil, Chile, Argentina, and Uruguay account for nearly all regional softwood supply, supported by large-scale plantation forestry and investment by integrated forest-product companies and institutional owners. The region currently produces about 95 million cubic meters of softwood roundwood annually.
By 2035, regional softwood supply is expected to increase modestly, accompanied by moderate real price growth. Oceania, particularly New Zealand and Australia, remains a major plantation-based softwood region. New Zealand is strongly export-oriented, while Australia supplies a larger share of its domestic market. Institutional investors play an important role in plantation ownership across both countries.
Oceania’s harvest has expanded as plantations reached maturity, but this trend is expected to reverse. New Zealand’s harvest is forecast to decline through the mid-2030s because of the age structure of its forests, while Australia’s harvest is expected to increase gradually. Overall, Oceania’s softwood supply may fall by about three million cubic meters by 2035.
China has a substantial plantation resource, but domestic softwood supply is expected to remain broadly stable. Investment has increasingly favoured hardwoods, leaving China dependent on imported softwood logs, particularly from New Zealand (see chart). Although greater self- sufficiency and weaker construction demand have reduced import requirements, imports will remain structurally important.
Japan’s softwood harvest is near a peak as post-war plantations reach maturity. Domestic supply and self-sufficiency have increased, but forest growth is slowing and harvest utilisation is already high. Production is therefore expected to decline after the current surge.
