## Chapter IV Supply/demand of wood and wood industry

1. Overview of supply and demand of wood

☐ Demand for industrial wood in 2006 was 86.79 million m $ ^{3} $ . While the demand has been below 90 million m $ ^{3} $ since 2002, this still represents an increase of 0.93 million m $ ^{3} $ compared with the previous year.

Supply of domestic wood (industrial wood) has increased for 4 consecutive years and reached 17.62 million m $ ^{3} $ in 2006, backed by the increase in the supply of domestic wood for plywood. The self-sufficiency rate of industrial wood for 2006 was 20.3%, rising for 2 years in a row.

Over the past 2 years, supplies of wood for all sectors including sawnwood, pulp and chips, and plywood have increased, a trend not typically seen in past years.

### 2. Trends in wood industry

The number of new housing starts, which reached 1.29 million units in 2006, fell to 1.06 million units in 2007 due to the adverse effects of the revised Building Standards Law.

As there is a growing need for wood products of high quality and performance, demand for plywood and laminated wood has grown. In particular, domestic wood use for these areas is on the rise.

It is important to promote cooperation between forestry industry and wood industry, make efforts to provide a steady supply of wood and wood products of high quality and performance and win new customers for Japanese cedar and other domestic wood.

While the number of small-scale sawmills has decreased, the log consumption at large-scale sawmills is on the rise.

To steadily provide consumers with wood products that meet their needs, it is important to develop processing systems that maximize economies of scale and make efforts to make the most of unique regional characteristics. It is also important to develop new usage of still-unused wood.

Among various efforts to promote the use of appropriately produced woods, measures have been taken to combat illegal logging, such as encouraging the use of Goho (=legal) wood along with increased acquisition of forest certification.

### 3. Promoting wood use

It is important to supply housing sectors with the wood products that meet their needs and promote "home building with wood materials which clearly show their quality and origin" in order to comprehensively encourage the use of wood. In addition, MAFF proactively utilizes wood products through government procurement including public works projects, government buildings and office supplies. It is also essential to further promote the use of such wood products in other public facilities and civil engineering works.

Furthermore, it is important to continue “Familiarization with Wood Campaign” and “Mokuiku”, i.e., education on the quality of wood products and the importance of their use.

A wide array of practical applications for wood biomass has also been developed, and it is expected to serve as an eco-friendly resource.

☐ Wood exports have risen over the past few years. Lumber exports for houses to China and South Korea are noticeable. Going forward, it will be important to develop new markets in light of consumer needs in destination countries and to make efforts to export high value-added products.