Affected by tariffs and climate, cork timber in Canada is facing a severe situation.
In British Columbia, where the lumber industry is concentrated, companies have been reducing shifts and closing factories, due to insufficient supply of logs and lower timber prices. More factories are expected to close in the future. If you are in the lumber business, the situation is not optimistic.
Sustar, an investor services analyst, said tariffs were being hit by a sharp fall in prices. “Now timber prices are very low, and the 20% to 25% tariff is the actual cash that every company has to pay for all its exports, which is bound to hurt exporting companies, especially in British Columbia.” Sustar said that in the last round of cork tariff negotiations at the beginning of this century, the companies withdrew about 80% of the tariffs, but the dispute took five years to settle. It’s only two years now, and it may be several years before another cork agreement can be signed. Once the agreement is reached, British Columbia industry giants such as Interfor, Canfor and West Fraser will use the windfall of tax rebates to operate in the United States. The three companies now own more sawmills in the United States than in Canada.
Because of the lack of timber harvesting due to the housing crisis in the South of the United States, there is a large supply of timber. The government also encourages the planting of trees, which can attract about two or three new timber processing plants every year. Analysts expect timber prices to pick up somewhat next year, but trade disputes and supply conflicts will continue to drive down Canada’s share of the U.S. market.