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Japan feels the pain of timber shortages

A global shortage of wood and soaring prices are threatening Japan’s lumber industry and has business operators fearing serious damage to the domestic market. With demand rising in the United States and China, where the national economies are picking up, lumber prices have skyrocketed and Japanese firms are struggling to procure material. Source: The Japan Times

“I am not sure how long this is going to go on and how it will affect wood demand in Japan,” said Katsumi Tannaka, president of Butsurin Co, a Tokyo-based trading firm specializing in lumber.

“The next thing we know, people may not be building houses and wood demand will be falling sharply,” shrinking the market and hurting the whole industry.

Last month, lumber futures topped US$1,700 (about ¥186,000) for the first time in history.

Although prices have sagged to around US$1,300 in recent days, they are still more than three times higher than what they were a year ago.

The National Association of Home Builders in the U.S. also says lumber prices surged over 300% since April 2020, which has added an extra US$36,000 to the cost of the average new home.

Due to the steep price hike, Japan has seen dwindling wood imports, as monthly imports of lumber and laminated wood have declined year-on-year from last October to April.

On top of booming demand due to housing construction and renovations in the United States, a lack of shipping containers and an increase in shipping costs have also contributed to unstable wood supplies.

Although about 70% of Japan’s land is covered by forests, roughly half of the lumber used for housing construction is imported, according to the Forestry Agency. Tannaka said Japan relies heavily on imports from Europe, but nations there have seen a lot of their exports go to the US market in recent months.