United States

Department of

Agriculture

Forest Service Research Note

Southern Forest

Experiment Station

SO-279

June, 1982

Southern Wood Chip Exports

James E. Granskog

SUMMARY

More than 424,000 oven-dry tons of wood chips were

exported from the South in 1980. Sweden and Japan

were the major destinations for southern chips.

Additional keywords: Foreign trade, pulpwood exports.

INTRODUCTION

Trial shipments of wood chips to Europe in the mid

1970s opened a new market for southern pulpwood.

These trials culminated in long-term chip supply agreements to Sweden and the development of port facilities to

serve overseas markets on a continuing basis. In 1980,

more than 424,000 oven-dry tons of wood chips were

exported from southern ports.

This note reports wood chip exports from the South by

country of destination for the years 1987 through 1980.

Data were derived from export statistics collected by the

U.S. Department of Commerce for 11 southern customs

districts. These districts are: Norfolk, Wilmington,

Charleston, Savannah, Miami, Tampa, Mobile, New

Orleans, Port Arthur, Galveston, and Houston.

OVERSEASTRADE

Overseas trade in wood chips began in the mid 1980s

when shipments were initiated between Japan and Oregon (FAO 1978). Japan has since been the dominant

force in the world chip trade. In the process of steadily

increasing chiip imports to supply its pulp industry, Japan

has diversified its sources of~supply. Besides the West

Coast, other chip suppliers have included Australia, New

Zealand, the Soviet Union, Indonesia, Malaysia, ,South

Africa, and Canada. Although trial shipments of chips

from the South were made to Japan in 1970 and 1974,

further trade did not develop until 1980.

In the mid 197Os, the European pulp industry also

began to seek overseas sources of raw material. Western

European nations have traditionally relied on the Scandinavian countries to supplement domestic supplies of

papermaking: fiber, but booming markets and capacity

expansion in !the early 1970s caused Scandinavian pulp

industry requirements to exceed pulpwood supplies. At

the same time, a wood chip surplus developed in the

South because pulp industry requirements lagged behind rising lumber sales following the 1974-75 recession.

Trial shipments to four European countries from the

South in 1975 and 1976 were followed by two long-term

agreements for chip sales to Sweden. Conditions in

Sweden favored wood fiber imports. Swedish chip prices

doubled between 1973 and 1976, making wood chips

from the South a feasible alternative (Overgaard 1978).

Also, an uneven age distribution in Swedish forests and

government ‘policies toward maintaining employment

and pulp industry exports motivated use of external raw

material supplies (Overgaard 1977).

The long-term contracts provided the assurance

generally required to construct chip export facilities. New

chip terminals were completed at Lake Charles,

Louisiana, in1976 and Savannah, Georgia, in 1977. Prior

trial shipments were made primarily from bulk cargo

handling facilities in Morehead City, North Carolina.

Southern Forest Experiment Station/T-l0210 U.S. Postal Services Bldg., 701 Loyola Avenue, New Orleans, La. 70113

Forest Service, U.S. Department of Agriculture.

Serving Alabama, Arkansas, Louisiana, Mississippi, Eastern Oklahoma, Tennessee, Eastern Texas.

1
Table 1 .-Wood chip expotts from the South by country of destination, 1967-1980

Year’ Finland France Italy Japan Sweden Venezuela Othe? Total

--------___________--------------------------- oven-dry tons -----_________------____________________--------~~-------

1967 ........ ........ ........ ........ ........ ........ 290 290

1970 ........ ........ ........ 9,900 ........ ........ ........ 9,900

1973 ........ ........ ........ ........ ........ ........ 2 2 2 2

1974 ........ ........ ........ 16,212 ........ ........ ........ 16,212

1975 ........ 16,026 ........ ........ 77,283 ........ ........ 93,309

1976 1 7,3263 ........ 30,883 ........ 37,4303 ........ ........ 65,63Q3

1977 23,538 ........ ........ ........ 231 ,3583 8,9943 ........ 263,8903

1978 296 8 3 ........ ........ 83,431 6,445 179 90,434

1979 ........ ........ ........ ........ 222,975 ........ ........ 222,975

1980 ........ ........ ........ 109,246 315,043 4 2 290 424.621

‘No shipments were recorded in 1968, 1969, 1971, and 1972.

20ther countries to which small amounts have been exported include the Bahamas, Costa Rica, the Netherlands,

Paraguay, Spain, and the United Kingdom.

3Volume includes estimated tonnage of chips shipped under nonpulpwood classifications.

SOUTHERN SHIPMENTS

The volume of wood chips exported from southern

ports through 1980 is shown in table 1. For each year, the

volume reported by country represents the total shipments from the 11 customs districts. Since the moisture

content of green chips will vary, chip export volumes are

recorded in oven-dry tons to provide a consistent transaction or valuation unit.

Volume figures for 1976 and 1977 include tonnage

estimates for chips shipped under commodity classifications other than pulpwood in chip form. Prior to 1978,

wood chips not identified as pulpwood were included with

other miscellaneous wood products and reported by

value only, since the category lacked a common unit of

measurement. Volumes were estimated for sizeable chip

shipments in this category and were combined with the

volumes reported for the pulpwood chip category. Beginning in 1978, a revision of the export commodity classification system created a single category for all wood

chips.

Chip exports surged in 1977 as the new chip terminals

began to operate. However, shipments were curtailed in

1978 because of depressed European markets and other

difficulties (Patrick 1978). Shipments picked up again in

1979, but still were below levels expected from long-term

contracts. Spot sales to Japan helped to boost shipments

in 1980. By the end of 1980, the cumulative total for

southern chip exports surpassed 1.2 million oven-dry

tons.

Eighty-seven percent of all shipments have gone to

European destinations, primarily Sweden. Chip exports

to countries other than Sweden thus far have been trial or

spot shipments. During 1980, however, Norwegian pulp

companies were reportedly seeking a long-term supply

agreement for southern pine wood chips. Also in 1980, a

significant volume of southern chips-more than 109,000

tons-was shipped to Japan under spot contracts because of escalating prices for chips from the West Coast.

Southern pine chips have madeup almost the total

volume of shipments. Two deliveries of hardwood chips

were made in 1977 and 1978, and small shipments to

several countries for uses other than pulping may also

have been largely hardwood. Together, the hardwood

shipments have madeup only about 1 percent of the

cumulative total of southern chip exports.

LITERATURE CITED

Food and Agriculture Organization of the United Nations.

Wood chips-production, handling, transport. Rome,

Italy: 1976; 136 p.

Overgaard, Jorgen. Why and how the Scandinavians

import pulpwood. Proceedings of Southern Forest

Economics Workshop, Gulf Shores, AL: April 6-7,

1977; 4 p.

Overgaard, Jorgen. Pulp chip prices throughout the

world-a review of the current situation. In C. W. McMillin, ed. Proceedings 1978 Symposium: Complete Tree

Utilization of Southern Pine; 1978 April, New Orleans,

LA: For. Prod. Res. Sot., Madison, WI: 1978; 5156.

Patrick, Ken L. Export of southern chips dampened by an

oversupply in Europe. Pulp and Paper 52(6): 144-145;

1978.

James Granskog is Research Forester, Southern Forest Experiment Station, USDA-Forest Service, New Orleans, La.

2 *U.S. GOVERNMENT PRINTING OFFICE: 1982-569-082-27