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Shocks And Supply Shifts Picjumbo
Three major economic shocks—the Asian financial crisis
(1997–1998), the global financial and economic crisis (GEC)
(2008–2009), and the Covid-19 pandemic (2020–2022)— had

major impacts on the supply of and demand for tropical
wood products.
The Asian financial crisis led to an expansion of plantations
of profitable commodities such as palm oil and rubber in
Southeast Asia and an increase in the loss of natural forests.
The GEC had significant impacts on construction and
consumer spending—and therefore demand for tropical wood
products—in developed economies, particularly in North
America and the European Union.

However, growth in consumption and imports of primary
wood products in China and India cushioned the impacts of tropical sawnwood industry based on imported logs. Brazil’s
the crisis for tropical exporters. In contrast to the GEC, when production declined sharply since 2012, and production fell
demand factors had the most impact on wood products steadily in Malaysia and Indonesia from about 1990.
trade, the Covid-19 pandemic resulted in severe disruptions The tropical sawnwood industry has been dominated by
to production, transport and shipping and thus supply chains. small and medium-sized enterprises (SMEs), which were more
Tropical roundwood production is dominated by six vulnerable than larger enterprises to the economic shocks

countries—Indonesia (30% by volume in 2020), India (18%), described above.
Vietnam (12%), Brazil (11%), Thailand (4%) and Malaysia (4%). The tropical sawmilling sector in Africa is highly export
Malaysia’s production has declined significantly since 1990, dependent, with production affected by demand in export
mostly in response to reductions in logging quotas associated markets.
with its sustainable forest management (SFM) policies. A trend in the region since 2010 has been the transfer
In contrast, production has grown over the period in of industry investment from predominantly European-owned
Indonesia and Vietnam. A major trend has been growth in firms to Asian-owned firms, reflecting an increase in Chinese
roundwood production from plantations in tropical producer demand for hardwood sawnwood from non-traditional sources;
countries and a decline in production from natural forests, Asia’s demand for a wider range of species than sought by

which has been impacted by historical overexploitation and European buyers; and the high costs associated with producing
initiatives to enhance SFM and reduce illegal logging and trade. certified products required by European markets.
Tropical sawnwood production was relatively steady
globally between 1990 to 2000, rose to a peak in 2007, at Plywood And Processed Products
72.7 million m3, and to another in 2017, at 80.8 million m3, Tropical plywood production has undergone major changes
before retreating to 71.4 million m3 in 2021. in location, from Japan (which was the dominant plywood
There have been significant differences in trends between producer and importer of tropical logs until the early 1990s)

countries, however, the most significant of which is the and Indonesia to Malaysia (until the 2000s) and then to China,
emergence of China as a major producer since 2012, with a India and, to a lesser extent, Vietnam.