Monday, July 12, 2010

Is the future fortune of BC forests to be found in the Far East?

Residents of the North coast seemingly have a preview of the future of forestry in BC with the recent announcement of a trade arrangement between Lax Kw'alaams and Chinese Forest interests, but it could be that the northwest is but a part of a larger picture between British Columbia companies and Chinese interests.

Both the Northern View and the Daily News featured stories recently heralding that new arrangment between Coast Tsimshian Resources and China, but it would appear that they aren't the only company looking across the ocean for markets.

The Globe and Mail featured a weekend report that highlights the growing trade potential between Canada and China with some background on current deals in place and the quest to ensure even more of a footprint into the Far East.

Canfor has been leading the pack when it comes to creating relationships and building up potential markets for its products, a move that has finally begun to pay some dividends for Mackenzie which now has saw mills back at work creating product for a fast moving Chinese housing market.

And while Canfor and others seek out their share of that market share, some observers suggest that there may be a few setbacks in the near future, with fears that the Chinese property and housing markets maybe on the cusp of a retraction having become overheated in the last few months, though that seemingly appears to be a topic that has financial experts split.

And there is still a perception by a large number of Chinese that construction materials in the form of lumber are more suitable for peasants than the middle class, a rather large hill to climb in the nation of 1.3 billion, though considering the size of that population, even a small share of any construction market could dwarf past numbers from the more traditional trading partners of the US and Europe.

Still, as BC''s Forestry Minister Pat Bell puts it "The volume China could consume is far beyond our capacity to supply." By his forecast, China could soon be buying 10 million cubic metres of BC lumber a year, which could provide for more than a few jobs.

An observation that probably will have forest copanies from Lax Kw'alaams to Langley and all points in between more inclined than ever to keep the lines of communication open and the flow of lumber outgoing from our west coast ports.

At the moment a good portion of those shipments to Asia come in the form of raw logs, pretty well the most rudimentary part of the forest products food chain, and a frequent topic of concern in British Columbia.

Hopefully as the housing market evolves and hesitations diminish, more and more of that market could be in the form of finished forest products, which could put even more BC forest industry workers back to work at sawmills in troubled communities across the province.

The Globes' most interesting review of the changing dynamic for BC forest products can be found here.

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