Why is Canada so expensive
The nuisance shimmers black, is hardly bigger than a grain of rice, and when he's finished with his host, you can tell by the rust-red pine needles. In the forests of North America, Dendroctonus ponderosae, better known as the mountain pine beetle, has already destroyed forests to an extent that brings the word "apocalyptic" to mind. In the Canadian province of British Columbia alone, the beetle cut down more than 180,000 square kilometers of forest. Four times the size of Switzerland. Climate change offers the tree killer better living conditions than ever before. This is one of the reasons why lumber is scarce and more expensive than ever. The Canadian beetle could even endanger the supply of toilet paper and machines in Germany.
Canadian forest farmers were able to keep the deadwood markets stable for a long time. But that's the end of it. The timber harvest has been falling radically for five years. Before the beetle plague broke out, the United States obtained 15 percent or more of its timber imports from British Columbia. Now it is sometimes less than ten percent.
And then there's the pandemic. Because everyone thought that the timber market would collapse, the sawmills initially closed. However, the analysts underestimated the DIY enthusiasts in the USA. They now have a lot of time to repair or upgrade their houses. The demand remained high. So the sawmills went back into operation. Until the first employees were infected with the corona virus. The works closed again. A constant back and forth.
The high demand, the lack of supplies from the Canadian forests, the unsafe deliveries from the sawmills, all of this has caused prices to skyrocket. According to data from the US National Association of Home Builders, the price of lumber has risen 180 percent since April 2020. The construction of an average house has increased in price by 24,000 dollars in that time, the equivalent of around 20,000 euros.
For many builders in the USA, that's not a big deal. Thanks to generous corona aid packages from the US government and the low interest rates on home loans, they can pay the high prices. Which is why wood from German production is being shipped to the USA in ever larger quantities. In the first half of 2020, timber exports to the USA rose by 55.4 percent over the previous year to more than 940,000 cubic meters. A year ago prices in Germany were still in the basement. After various storms and our own bark beetle plagues, there was an oversupply. That is over thanks to the demand from the USA.
Even wood for pallets has become rare. And when there are no more pallets, "then we no longer just talk about the fact that toilet paper is becoming scarce. The food sector, the chemical industry or mechanical and plant engineering will also be affected." This is what Marcus Kirschner, managing director of the Federal Association for Wood Packaging, tells the trade magazine Dispo. The crisis could get worse. The end of the pandemic is in sight, the economy is picking up. And with it the demand for wood. The mountain pine beetle in Canada should be of little interest.
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