Wood Pulp Trade Analysis - Growth, Trends, and Forecasts (2023 - 2028)

The wood pulp market is expected to witness a CAGR of 2.6% during the forecast period (2022-2027). The pulp and paper industry involves many fields such as forestry, agriculture, chemicals, biology, distribution, and transportation, thus occupying an important position in the global economy. Due to the COVID-19 pandemic, this sector has severely affected people's lives, industrial production, and the global economy, which inevitably induced a major impact on the pulp and paper industry. For instance, copier paper and printing paper have seen a notable decrease in demand recently due to the shutdown of colleges, universities, hotels, and restaurants.

Pulp is an intermediate chemically- or mechanically-processed fibrous material derived from wood or other plant fibers, whereas waste paper is a resource collected from previously discarded material. Both wood pulp and waste paper contain varying amounts of cellulose fibers. Annual production of paper and paperboard has increased by 6% since 2010 (FAO, 2021).

The pulp and paper industry comprises companies that use basic raw materials like wood to produce pulp, paper, paperboard, and various cellulose-based products. Annual global paper and board production and consumption capacities reached 419.7 million metric ton and 423.3 million metric ton, respectively, in 2019. North America and South America together account for more than half of the global production, followed by Europe and Asia-Pacific. Canada, the United States, and China are the top three producers of wood pulp due to their improved technical know-how and large forestry sectors.

Wood Pulp Trade Analysis Market Trends

China is the Largest Importer

The development of China's pulp and paper industry is drawing increasing interest among scholars, policymakers, and international producers. The pulp and paper industry is one of the very few industries in China that have been experiencing shortages in supply. Domestic production cannot satisfy domestic consumption, especially for high-quality paper and paperboard products, due to old production techniques and a lack of high-quality raw materials. Therefore, unlike other Chinese products, China has been importing more pulp and paper products than exporting. In 2020, China increased its chemical wood pulp imports by 10% with 24M ton. It was driven by the rising demand for paper packaging and tableware amid the pandemic and further stimulated by a sharp fall in import prices last year. Brazil, Indonesia, and Canada are the major suppliers, providing 57% of the total import volume. Bleached sulfate pulp accounted for 95% of the total wood pulp imports into China.

The United States and Brazil are the Largest Exporters

Pulp production is characterized by large, technology-intensive plants. According to the Food and Agriculture Organization, the United States produced 50.8 million metric ton of wood pulp in 2020, while Brazil produced 21.6 million metric ton of wood pulp in the same year. Brazil is recognized for the quality and the sustainable and certified origin of its pulp, and this fact has contributed to maintaining the national industry as a major reference in the world. The country is highly competitive in pulp production, especially in the forestry stage, due to the climate, soil, and R&D. Today, Brazil exports about 70% of its production. The pulp and paper industry has been increasing its relevance in Brazil, and its energy consumption has increased from 5% of final industrial consumption in 1970 to 16% in 2020, with average consumption growth of 5.4% per annum. In 2020, Brazil led the world ranking for exporting more than 15 million ton of pulp, making it a major global supplier of this input. In 2020, more than 70% of Brazilian production was destined for the foreign market.

In the United States, pulp for paper production quantities has been in decline and dropped to a low of 48.35 million metric ton in 2017. After that, the production bounced back to reach 53.2 million metric ton in 2018, which then declined to 50.9 million metric ton in 2020. Accordingly, export has also been declining over the years. In 2020, the country exported wood pulp worth USD 7.6 billion. During the first six months of 2021, the United States recorded a decline in chemical wood pulp exports by 9% compared to 2020. Meanwhile, export values were up by 7% from the previous year.

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