The Australian timber industry has a golden opportunity to become a net exporter of timber by the end of the decade if it can improve labour productivity and saw log conversion.

A new study from the BIS Shrapnel Forestry Group says if Australian producers are to take advantage of increasing global demand and declining supplies from the US they must become cost competitive with sawn timber exporters from New Zealand and Chile.

Currently Australia is a net importer of forest products with an imbalance of A$2bn a year which could increase to A$2.5bn during 2002-2006. However, it is believed that deficit could be turned around so that the sawn timber industry contributes around A$40m a year by 2016.

The study says the market is largely being driven by change in the US, the world’s largest consumer and producer of sawn timber, where environmental pressure has drastically reduced production.

&#8220Japan, China and the US will provide large markets for Australian producers over the next 20 years and the challenge for forest products companies now is to gear their production to take advantage of the unprecedented opportunities”

Increased Canadian production is not enough to compensate for the US decline, and while European production is increasing, India and China cannot produce enough to meet their own requirements.

The report’s authors say that once global economics begin to recover, there will be strong growth in demand. Japan, China and the US will provide large markets for Australian producers over the next 20 years and the challenge for forest products companies now is to gear their production to take advantage of the unprecedented opportunities.