Housing crisis to hurt N America forest products-UN

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GENEVA, Oct 17 (Reuters) North American forest products markets are likely to suffer as a result of weakness in the US housing market, United Nations experts said.

US consumption of sawn softwood is expected to drop by 11 per cent this year, and by a further 2 per cent in 2008 to 90.9 million cubic metres, the Timber Committee of the UN Economic Commission for Europe (UNECE) said.

Sawn softwood production in the United States and Canada is predicted to fall by 5.8 per cent this year, and by another 1 per cent next year when it will be 116.1 million cubic metres, the committee said.

''Forest products markets are forecast to decline in North America, and dramatically for sawn softwood, due to the crash in the United States housing market, in contrast to positive developments in Europe and Russia,'' it said in a statement issued after a five-day meeting in Geneva last week.

The Geneva-based UNECE has 56 member countries including the United States and Canada.

European sawmillers are expected to increase production in 2007 by 4.3 per cent and by another 0.4 per cent in 2008 to a record 116.2 million cubic metres, the group said.

European consumption of sawn softwood is also forecast to grow, peaking this year at 108.1 million cubic metres, it said.

Russian production is forecast to jump by 8.8 per cent this year and by a further 11.8 per cent in 2008, to reach 24.1 million cubic metres.

Most of the higher output is destined for export markets, which could rise by up to 10 per cent in each of the next two years, eaching 18.4 million cubic metres in 2008, it said.

Russia has announced it will impose of duties on exported logs, scheduled to reach ''prohibitive levels'' by 2009, in order to encourage domestic processing of wood, it added.

''Demand for processed fuels such as wood pellets is at record levels, resulting in shortages and higher prices in parts of Europe,'' the UNECE's timber committee said.

Kit Prins, chief of the UNECE trade and timber division, said there were no statistics on pellets.

''But it is clear from talking to everybody that it is a record.

Installations to produce and burn pellets are being set up all over Europe,'' he told Reuters.

Reuters RN DB1120

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