Galician Timber Industry: over 500 Million € Lost due to Global Crisis

Impacts of the Global Crisis on Galician Roundwood Harvests & Timber Industry Productivity

Gustavo Iglesias Trabado
GIT Forestry Consulting SL - Consultoría y Servicios de Ingeniería Agroforestal - www.git-forestry.com - EUCALYPTOLOGICS

As the worst of the crisis starts to dissipate in the financial markets and optimism messages are spread worldwide to reboost the global economy, we frequently forget that certain productive sectors experience delayed and longer lasting effects than the purely financial. Timber, an always scarce commodity processed to manufacture products you and I use everyday is no exception.

Today, thanks to the kind input from Fearmaga, the Asociación Galega Monte Industria, the Cluster de la Madera de Galicia & Feceg, we can explore the effects of the global crisis and its impact on timber harvests and the productivity of the Galician timber industry during 2009.

Numbers are grim, but the worst is already over. Recovery is slower than for other industrial sectors, or even for the same forestry sector in other countries, but the storm shall pass. Producing roughly 50% of yearly harvested roundwood in Spain, Galician forestry will survive.

Some Macro-magnitudes

After a historic peak timber harvest record during 2008, delivering over 8 million cubic metres, two events unfolded rapidly during early 2009. By January, Biscay Bay Storm Klaus hit the Eucalyptus & Pine forests of Northern Spain en route to Les Landes d'Aquitaine in Southwestern France. As a consequence, a huge mountain of stormwood was scattered in a very short timespan over Galicia. Non economic harvest of the unexpected stock, carried on as "relief operation" hampered timber harvests during a part of the year and helped push timber prices down. In addition, Klaus stormwood entered the Iberian markets as the French government heavily subsidized the fallen pine wood.

At once, the domino effect of the financial crisis, causing the burst of the "Real Estate and Construction Bubble" in Spain stopped the demand for a varied range of products, from sawn timber for scaffolding, passing by panels and flooring, to furniture and embelishment timbers.

As a result of these and other factors timber industry activity nearly stopped for some product lines, or continued at a daily loss while timber yards were filled and product stocks accumulated.

Fig. 1: Galician Roundwood Harvest, Timber Industry Productivity and Income variations for 2009. (Click image to enlarge)

The consequences, dire. Timber harvests, even including Klaus Stormwood, decreased a 22% compared to 2008. Low timber prices, decreasing industrial demand and stormwood availability paralyzed harvests during the first semester. Industrial productivity fell sharply due to decreased product demand and declining prices, with peak decreases of a 42% for sawmilling lines and 26% for wood panels and board lines compared to 2008. Only Eucalyptus Kraft Pulp productivity kept the levels of the previous year, increasing lightly a 3% thanks to more efficient handling of the industrial process, but global BEKP pulp prices fell sharply diminishing income a 22%.

The overall income of the Galician timber industry for 2009 experienced a decrease for an amount over 500 million € compared to 2008, forcing closure of industrial lines, reduced labour input needs, and the loss of 3,300 jobs.

Download the full report

Galician Timber Industry Results 2009

[Download PDF 740 KB, 15 pages]

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Scientists comment on toxic eucalypt claims

FOREST SCIENTISTS’ RESPONSE TO CLAIMS THAT FORESTRY TREES ARE LINKED TO TOXIC WATER IN NORTH-EASTERN TASMANIA

"Concerns have been raised in recent media reports and on the ABC’s Australian Story, suggesting that contamination of Georges Bay is due to chemicals derived from genetically altered Eucalyptus nitens plantation trees located in the catchment. There have been many incorrect assumptions and tenuous connections raised which may have lead to unnecessary public concern.

No eucalypt plantations in the catchment, or anywhere else in Australia, use trees altered through genetic engineering. The E. nitens trees in the plantations would have been grown from naturally pollinated seed produced in seed orchards, which incorporate first or second-generation descendents from wild populations of E. nitens occurring in Victoria or southern NSW. The trees in the seed orchards have been selected in field trials for their superior growth and wood quality. They have not been selected for increased toxicity. The E. nitens trees growing in plantations in the Georges River catchment would be genetically very similar to those that occur in the native forests that shed water into Melbourne’s reservoirs and other river catchments in Victoria and NSW.

Hamilton et al (2008) Genetic improvement of Eucalyptus nitens in Australia. Australian Forestry, 71 (2). pp. 82-93

Statements have been made concerning the relative toxicity and greater foam production from E. nitens leaves sampled from genetically improved plantations compared with leaves from natural old-growth forests. While we do not know the full details of the sampling involved, it is important to note that eucalypt leaf chemistry changes markedly from the juvenile stage (as was apparently sampled in the plantations) to the adult leaves sampled in the native forests. Leaf chemistry also changes seasonally and is influenced by the growing environment, so at this point it is incorrect to conclude that the plantation trees are genetically more toxic.

The ABC program implied chemicals leaching from the leaves of trees in the E. nitens plantations flow on the surface of the river and their accumulation in Georges Bay has been responsible for human health problems and deaths of oysters. However chemicals from native vegetation occur in waterways throughout Tasmania naturally, as evidenced by the dark brown river waters of Tasmania’s World Heritage Area. There are many catchments where E. nitens occurs, either naturally or in plantations across Australia.

No evidence has come to light suggesting that this particular tree has any atypical effect on aquatic life compared with other eucalypt species. Due to public concerns, closer examination is warranted, and this issue can be resolved with well designed studies.

Eucalypts are the dominant trees of our native woodlands and forests. Many of the chemicals that naturally occur in eucalypts are toxic to some organisms in sufficiently high concentrations. The original Analytical Services Tasmania laboratory study in February 2005 identified several surface or foam samples which were toxic. Of the chemicals assayed in the toxic samples, the major ones, including cineole, are well recognised components of eucalypt oils. While toxic if swallowed in its concentrated form, eucalypt oil is widely used in medications around the world as an inhalant and a skin-rub.

Chemicals that the Analytical Services Tasmania laboratory identified in the toxic samples occur not only in E. nitens foliage but in that of many of the native eucalypts including E. globulus, E. ovata and E. viminalis which occur in the vicinity of Georges Bay. Cineole is the dominant component of the leaf oils of the majority of Tasmanian eucalypt species. There are many other chemicals which can be monitored, even at very low levels, to determine whether they further contribute to the toxicity reported and may be more specific to the Georges Bay situation and E. nitens. There are also natural plant chemicals which are known to cause foaming when shaken in aqueous solutions.

We expect these eucalypt chemicals to degrade in situ as well as move into soils and waterways to some extent through litter fall and leaching. Trees may naturally affect local aquatic ecosystems in many ways. Leaf and other organic litter from eucalypts is a major basis for the food chain in nearly all Australian stream ecosystems, often providing the main source of carbon for the invertebrates and ultimately fish in forested catchments. Eucalypt leaves in streams are eaten, usually after a period of breakdown by bacteria and fungi, by a wide variety of aquatic insects and crustaceans which have evolved to be dependent on this food source. The chemicals in eucalypt leaves are broken down and released continually through this process in thriving, healthy stream ecosystems.

We have a lot to discover about the diverse natural chemicals in our native flora, including eucalypts. We applaud any vigilance in the interests of public health or environmental integrity, and acknowledge the valuable role played by concerned members of the public, and the media, in keeping these matters in the public eye. However, it is important that future studies are designed and conducted in a scientifically rigorous way. Scientists at the University of Tasmania, CSIRO and the CRC for Forestry have all indicated their willingness to participate in future investigations."

Professor Gordon Duff, CEO, CRC for Forestry
Dr Chris Harwood, CSIRO Sustainable Ecosystems
Dr Julianne O’Reilly-Wapstra, University of Tasmania
Professor Brad Potts, University of Tasmania
Professor Jim Reid, University of Tasmania

Further Reading

Forest scientists' response to toxic water claims. Media release, CRC for Forestry, 23 February 2010, regarding effects of Eucalyptus nitens trees on water in Georges River catchment, Tasmania, as reported on the ABC's Australian Story on Monday 22 February. [Download PDF 27.6 kb]

Hamilton MG, Joyce K, Williams DR, Dutkowski GW & Potts BM (2008) Achievements in Forest Tree Improvement in Australia and New Zealand 9. Genetic improvement of Eucalyptus nitens in Australia. Australian Forestry, 71 (2). pp. 82-93. ISSN 0004-9158

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