Wood Supply and Demand Analysis in Pakistan

1. Motivation
One of the most important utility of forest plants is the timber, which is inevitable for the construction sector. The
country is severely short of forests, and hence timber plants. Timber demand is consistently increasing with the
growth of population and economic development. In Pakistan, forests resources are very limited as they are only
4.4% of the total land area which are insufficient to meet the country’s demand for timber and fuel-wood. Shortage
of timber is being met through imports. Along with heavy imports, there is door open for smuggling which is
becoming very precarious issue for the economy. Illegal dumping of wood into local markets is getting hampered as
containers inflow under the Afghan Pakistan Transit Trade Agreement (APTTA) gets absorbed in Pakistani markets.
If we look into timber market in the country, imported wood in the market is much higher than imports of wood
reported officially. This means that more imported wood is coming through unofficial means. Basic motivation
behind this research briefing was to analyze the issue of dumping of timber into local market and to assess current
and future demand and supply scenarios in the country. This is 1st part of the study aimed at assessing the demand
and supply scenarios of wood in Pakistan, to assess shortage in future and to look into options to fulfill future
demand. Study also aims at providing an insight of policy issues. The 2 nd Part will be presented in sequence which
will look into the prospects of commercial timber plantation development in Pakistan. The future research and
development needs will also be assessed.

2. Introduction
2.1. Background Information
Pakistan has limited timber and wood resources. Out of the total land area of 87.98 mha, forests cover only 4.4
mha (4.96%) against desired level of 25% considered essential for sustainable economic development. Forests
include State-owned forests, communal forests and privately owned forests. State forests cover 1.29 mha while
communal and privately-owned forests cover 3.1 mha located primarily in the Khyber Pakhtunkhwa and Punjab
(GOP 2008). Hill forests predominate in the north and northwest temperate and subtropical regions. Fir (Abies),
spruce (Picea), deodar (Cedrus deodara), bluepine (Pinus wallichiana), chirpine (Pinus roxburghii), chilghoza
(Pinus gerardiana) and juniper, as well as broad-leaved species like oak (Quercus), maple (Acer), walnut
(Juglans regia), poplar (Populus) and chestnut (Castanea) are found in the hill forests. In irrigated plantations,
species such as sheesham (Dalbergia sissoo), mulberry (Morus alba), bakain (Melia azadarach) and semal
(Bombax ceiba) are grown for timber3.
The forests not only provide timber but also supply fuel wood. They also provide groundcover to fragile
mountain ecosystems. Since forest resources are limited, Pakistan has to import wood and wood products to
meet the rising demand. The forests in Pakistan are heterogeneous and reflect physiographic, climatic, and
edaphic contrasts. The forest types prevailing in the country are:

Tropical dry deciduous;

Tropical thorny;
Sub-tropical broad-leaved evergreen;
Sub-tropical pine;
Litoral and swamp;
Himalayan moist temperate;
Himalayan dry temperate;
Sub-alpine; and
Alpine scrub.

Notwithstanding the wide range of forests in the country due to variation in climatic and edaphic factors,
Pakistan is still a forest poor country with only 0.03 ha of forest are per capita of population which is declining
due to population growth (NIPS 2009).
Number of factors is responsible for low wood production in the country. Firstly, Pakistan inherited a very small
forest area at the time of independence. Secondly, most of the land area is arid and receives too less precipitation
to support growth. In fact poor tree cover is due to adverse climatic and edaphic factors. After the creation of
Pakistan, the forest contractors wrought havoc with the already scarce forest area. The demands of a developing
country were exceedingly heavy on indigenous wood resources which shrank further due to free for all
situations. The area of the public sector cannot be expanded fast enough to keep pace with rapidly growing

MUJTABA HASEEB 1
population and consequently the gap between out-turn vis-à-vis demands of fuel wood and timber has continued
to widen. Shortage of wood and poor state of forests is, therefore, a challenge for Pakistan. Wood production of
public lands is disappointing. As per Forestry Sector Management Plan (FSMP) study in 1992, there was a wood
shortage of about 15 million m³ in 1992 which increased to 29.36 m³ in 2003 and projected to be 43.97 m³ by
2018 (GOP 1992). Wood shortage is being met through imports and illegal and ruthless cutting of the forest
trees. The gap will continue to haunt till massive funds are provided for afforestation, rehabilitation and
restocking initiatives on emergent basis.

Objective of the Study

The overall objective of this study is to assess the demand and supply scenarios of wood in Pakistan, to project wood
shortage in future and to develop future strategy for sustainable availability of wood. Study also aims at providing an
insight of the policy issues regarding wood imports and smuggling under the Agreement of Afghanistan Pakistan
Transit Trade.
3. Wood Demand Analysis
3.1. Wood Consumption
3.1.1 Fuel-wood Consumption
As per study of MAANIC, per capita consumption of fuel wood is 0.205 m³ 4. Total fuel wood consumption is
estimated at 34.95 million m3 in 2011 for the population of 170.52 million 5 (GOP 2005). The species preferred for
cooking are Kikar, Phulai, Shisham, Ber, Mulberry and other because of their good burning qualities. There are three
sectors consuming fuel wood – household, commercial, and industrial.

Household sector
Fuel wood has been the main source of energy in the domestic sector. The household survey revealed that 75% of
the households have used wood as a principal fuel for cooking, 14% for water heating and 11% for room heating.
The situation is quite different by urban/rural divide; 90% in rural areas have used fuel wood for cooking but only
10% in urban areas by slum dwellers (GOP 2005). It is only after the discovery of fossil fuels that the fuel wood has
gradually been replaced. The switch over has gained momentum in early 1970s when natural gas became available 6.
Because of rapid population growth; it is also the most rapidly growing sector in terms of demand and modern fuels.
This growth has placed a tremendous stress on commercial fuels supply structure resulting in load-shedding of
electricity, natural gas rationing, fuel shortages which has forced the country to resort to high imports of commercial
fuels with massive capital investments. Inspite of these substitutional effects, majority of the rural masses still
heavily rely upon bio-fuels such as fuel wood, cow-dung and crop residues. The percentage of expenditure on gas
and electricity has however remained steady especially in urban households. The rich households have mostly
switched over to commercial fuels subject to availability but poor classes are still obliged to use lower cost products
such as fuel wood, dung-cakes, and crop residues.
The provincial consumption revealed that the households in Balochistan province have mostly consumed fuel wood
due to non-availability of alternative fuels and cold weather. Punjab has highest consumption of crop residues
because of larger farm area. Sindh has applied electricity due to high level of urbanization and dominance of
Karachi. In KPK including FATA/PATA, Gilgit-Baltistan and AJK where forest resources are highest, the majority
of the population has consumed fuel wood at the household level. This is also assigned to lack of alternate biomass
fuels in these areas. The major problems faced by the consumers are scarcity of wood, distance of wood talls, high
price level and many more.
Commercial sector
In commercial sector fuel wood consuming establishments include i) hotels/restaurants ii) tea bars iii) ovens iv)
bakeries v) tikka shops vi) barber shops and others such as milk shops, sweet shops, etc. The fuel wood
consumption by mode of business at the country level has been estimated at 3.3% of the total fuel wood
consumption (GOP 2005).
Industrial sector
In the context of Pakistan, the industries consuming fuel wood are rural based. The most important in order of
consumption are brick industry, tobacco curing units, charcoal kilns, khoya industry and some minor industries
such as pottery and ceramics, lime manufacturing, groundnut/turmeric curing, gur making, black smith, dyeing,
washing, silk cocoon processing, local medicines, etc. Major proportion of fuel wood consumption in this sector
goes to social ceremonies (27%) followed by khoya production (24%), brick making (20%), other industries
(18%), charcoal making (8%), and tobacco curing (3%).Total consumption of these wood based rural industries
is estimated at 4.703 million m³ (GOP 2005).

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3.1.2 Timber Consumption
Per capita timber consumption is 0.08 m³. Thus total timber consumption is estimated at 13.57 million m 3 in
2011 for population of 170.52 million. Major requirement of timber is being met from farmlands plantations
(91.4%) followed by imports (5.22%) and state forests (3.34%; GOP 2005). In irrigated plantation forests,
species such as sheesham, Kikar, Eucalyptus, mulberry, Poplar, Bakain and Semal are grown which provide
timber for furniture and sports goods. Forests in the foothills are based on broad-leaved evergreens, with main
species of olive and phulai. Deodar, Pertal, Kail, Shisham, Kikar/Babul, Mulberry, etc are the main wood
species used for construction and furniture.

3.2 Total and Sector-wise Wood Consumption

Per capita wood consumption (timber plus fuel wood) is 0.285 m³ while total wood consumption in the country
is estimated at 47.73 m³ million m³ in 2010 for the population of 167.72 million.
There are basically three sectors which consume fuel wood in Pakistan i.e. domestic sector, rural industrial
sector and commercial establishments. According to wood supply and demand survey, household sector has
emerged the largest consumer (81.8%) followed by industrial fuel wood entrepreneurs (14.9%) and commercial
(3.3%).
Analysis of sectoral distribution of timber consumption revealed that major contribution goes to sawmilling
(21%), followed by housing sector 19%, crates and box making (13%), miscellaneous wood based industries
(10%), truck/bus boding building (9%), village carpentry (7%), sports goods (5%) and the rest 16% share goes
to mining, boat making, ply wood, chip/hard boards, wood aircraft, railway tracks/carriages, pencil and match
box industry, non-mechanized enterprises, shoe lasts and bobbins.
Province wise breakup of total wood consumption (fuel wood plus timber) analysis shows that Punjab is having
share of 49.15% in wood consumption because of highest population followed by KPK (17.9%), Sindh
(16.77%), Gilgit-Baltistan (9.75%), and Balochistan (6.43%), respectively (GOP 2005).

3.3 Driving Forces in Wood Consumption

There are three major uses of timber at household level: construction, furniture and village application.
According to wood supply and demand survey, household sector has emerged the single largest consumer
(81.8%). Shelter is one of the basic necessities of life. The demand for housing, energy and industrial wood is
directly linked with population growth.
Economic growth in general and boom in construction sector in early years of the 1 st decade of this century
resulted in massive wood consumption. Construction industry is a major user of timber in Pakistan. It accounts
for 20% of the total timber consumed in the country. Moreover, Katcha construction in rural areas is switching
over to Pacca construction on a faster pace. The distribution of the sector has discerned a shift from Katcha to
Semi-pacca and Pacca houses in the wake of easy availability of loans by House Building Finance Corporation
(HBFC) and availability of construction materials on demand 7.

4 Wood Supply Analysis

4.1 Wood Supply Sources
There are three major sources of wood supply i.e. State Forests, Areas other than State Forests (including private
forests and farm lands) and Imports. The average production of commercial forests is less than half (41.5%) of
the total area under forest and the rest (58.5%) are protection forests (GOP 2005). The biggest forest resources
of Pakistan are the coniferous forests in north, north east and North West constituting 39.3% of the total area
under forest cover and almost one-half of them are production forests. Other productive forests are in the Indus
Basin plains, i.e. irrigated plantations mainly in the provinces of Punjab (5.8 %) and riverine forests (6.2%)
especially in Sindh. The non-productive forests in the hills and plains are scrub forests (36.7%) and coastal
forests (11.3%). Remaining tree covers are of linear (canal and road side) and miscellaneous plantations such as
amenity, households, defense purposes, etc. Trees on farmlands are the major sources of fuel wood supply for
domestic and commercial uses (GOP 2009). Out of the total timber used in the country, 91.4% is coming from
farm lands while 99.8% of the total fuel wood requirement is being met from farm lands (GOP 2005).

4.2 Estimated Forest Growth

Far more wood is removed from public forests and other lands than is recorded or estimated. No record exists of
how much or from where wood is actually taken. It comes not only from public forests but from farmlands and
from millions of scattered trees in cities along road sides and on scrub lands. In view of this, the FSMP used
forest growth as a measure to estimate quantity of wood resources on a sustainable basis.
Keeping in view lack of recorded total supply of wood as pointed above the present study has also used the
same approach and data as by the FSMP while estimating quantity of wood production on sustainable basis.

MUJTABA HASEEB 3
As per FSMP studies the forest growth (annual yield) was estimated at 14.4 million m³. Assuming that the forest
growth has remained the same, study would use this estimate as annual local production of wood. Wood supply
from the state forests and from imports is documented; however, it is difficult to assess the same from other
sources due to innumerable supply channels by which it finally reaches to the end users. A substantial quantity
is collected directly by the individuals in the rural areas for their own consumption which remain unaccounted
for in the assessment. Forest resources in Pakistan are either under state control or in the private sector. There
are two major sources of forest production i.e. state forests and farmlands. Public forests supplies most of the
national industrial wood requirements. Data on forest production in public sector is obtained from
documentation of forest departments where administrative recording system is commonly used. The difficulty
arises in respect of private sector and local communities where no records are kept.
4.3 Wood Supply Channels in Domestic Market
All the sale depots of territorial forest divisions in the country are major source of timber and fuel wood supply. The
forest departments however maintain records of forest area, regeneration, growing stock, harvesting and auction of
timber and fuel wood. Public forests supplies most of the national industrial wood requirements. A large scrap of

Imports of wood and wood products

With virtually no commercial forests, Pakistan is reliant on imports to meet its need for wood and wood-based
products. Much of the economic growth in the country can be found in the construction sector, which has been a
catalyst for the rising imports of wood and wood products. Many wood products imported by Pakistan
companies are then shipped to Afghanistan and central Asian countries.
During 2008-09, wood and wood based products worth Rs. 5.4 billion have been imported which is obviously a
burden on foreign exchange and hence need immediate attention of policy makers and planners to develop
means to provide wood on sustainable basis and to seek cooperation of wood based industries specially those
which are involved in pulp and paper production. Out of the total imports of wood and wood based products, the
imports of timber constitute 76% while the imports of wood products constitute (20%) which primarily relate to
pulp and paperboard and the rest 4% are miscellaneous items (GOP 2009). Presently the pulp production is
based on agriculture waste e.g. baggasse, wheat and rice straw, cotton lint, waste paper, kahi (elephant/ river)
grass. This agriculture wastage is used for producing short-fibre pulp. Consequently, the quality of paper
produced in Pakistan is inferior as compared to the imported one so the preference goes to imported pulp and
paper.
As a raw material to feed paper industry, one such species is Eucalyptus (camaldulensis) whose pulp yielding
quality is reasonably high. This species was planted in 90s on large scale by the farmers in good faith to supply
wood on sustained basis to the much trumpeted pulp wood producing plant under construction and thus help
Pakistan to produce quality pulp and paper and displace 70% of that imported. The good faith vanished when
the farmers could not find marketing of this product with the non-operating wood processing plant. They had to
sell their products cheaply as fuel wood. This species is not being encouraged for planting due to its allelopathic
effects on environment.

5.1 Historical Trend

In the past years, due to the high rate of economic growth and especially owning to manifold increase in
workers’ remittances since 2001, investment
into the real estate sector also increased
tremendously. Economic growth in general
and boom in construction sector specifically
in early years of the 1st decade of this
century resulted in sudden increase in wood
import. Total import of wood and wood
products amounts to Rs. 5.4 billion in 2009.
Importing round wood also compensates
shortage of wood and wood based pulp and
paper, veneers, plywood, etc. In 1992-93,

Pakistan Agricultural Research Council, Islamabad, Pakistan

Trend analysis shows that there has been gradual increase in the imports of wood and wood products up to 2001
but there was sudden and huge increment observed from Rs. 9.76 billion in 2001 to Rs. 17.58 in 2004 and then
drastic decline at Rs. 4.5 billion in 2005(GOP 1990-2009).
Drastic decline in the imports of wood and wood products in 2005 is mainly attributed to dumping of wood in

MUJTABA HASEEB 4
the name of APTTA. The imports of Afghanistan had been exempted by the custom duties coupled with a
“sympathetic consideration” regarding service charges, port levies and handling fees. Perhaps it was never
imagined at that time that such trade mechanism would hurt infant economy of Pakistan incalculably by
rerouting the merchandise in Pakistan depriving it from billions worth of revenue besides damaging the local
industry. In 1996, the Government of Pakistan, on the hue and cry of local business unions and federations,
placed 17 items on the negative list by banning their import under APTTA. In the year of 2001 this list was
revised upward and seven more items were included in the list. On the request of Afghan government, the
Government of Pakistan in March 2004 slashed this list to six items only and size of the list was further cut in
2005 again to three items (tobacco, cooking oil and auto parts) only (Jappa 2009). Implications of this removal
of negative list on wood industry can be observed that wood imports declined very sharply (from Rs. 17.58 in
2004 to Rs. 4.5 billion in 2005) after the removal of negative list under APTTA in 2005. This result in massive
dumping of imported wood coming in the name of APTTA and getting absorbed in the local markets. Thus a
huge amount of imported wood is there in the Pakistani market that is much higher than the officially reported
imports of wood and wood products. This clearly shows that most of the imported wood and wood based
products comes through the means other than official means.
According to Canadian Consulate Karachi, total Canadian exports to Pakistan have grown 25% from 2005 to
2006, with a further 95% increase in the first three months of 2007. Overall Canadian exports to Pakistan in
2007 may well exceed $600 million (Rs. 36.44 billion), and Canadian wood products exporters can claim a
bigger share of this growth while FBR reports a total of only Rs. 5.28 billion of imports of wood and wood
products in Pakistan for the respective year (DFAIT 2007).

5.2 Country-wise Imports of Wood and Wood Products in Pakistan

The major suppliers of wood and wood products to Pakistan are indicated below:
Roundwood: Afghanistan, Myanmar, Malaysia and Singapore. Softwood is imported from Afghanistan
and teak and other non-coniferous wood from Myanmar, Malaysia and African countries.
Veneer and plywood: Indonesia, China, Malaysia, Singapore and USA.
Sawnwood: UK, USA, Romania, Myanmar, Malaysia and Singapore.
Wood Pulp: Sweden, Switzerland, USA and South Korea. Pakistan imported a huge quantity of paper and
paperboard i.e. graphic paper, newspaper print.
Paper and Paperboard: France, Russian Federation, Sweden, Japan, Italy, Finland and South Korea.
Packaging material: Brazil, China, Italy, Poland, Spain, Romania and USA.
Other paper and paperboard not elsewhere specified: France, Japan, Netherlands, South Africa, Norway,
Spain, UK and USA.
Special Coated Paper: Asian Countries, Bulgaria, Finland, Germany, Italy, Norway, Poland, South Korea,
UK and USA.
Copying Paper: China, Japan and UK.
Household Sanitary Papers: China, Dubai, Norway, South Korea, Thailand, UK & USA.
Packaging Cartons and Boxes: Austria, Australia, Dubai, Switzerland and USA.

5.3 Why Imports – Contributing Factors

The trade policy is very important instrument to fill the production gap according to the demand, to control the
volume of transaction of goods and to improve trade balance in the country. The policy is reviewed annually and
released with the budget. The trade policy is primarily oriented towards liberalizing imports. Trade liberalizing
policy in general affects the overall imports of the country while there are some specific reasons for high
imports of wood and wood products as following:

Low wood Production coupled with increasing demand in the country: Country is severely short of
forests, and hence timber plants. Timber demand is consistently increasing with the growth of population
and economic development. Much of the economic growth in the country can be found in the housing and
construction sector, which has been a catalyst for the rising imports of wood and wood products. virtually no commercial
forests coupled with increasing wood consumption (both fuel wood and timber),
Pakistan is reliant on imports to meet its need for wood and wood-based products.

High prices of local wood: Preferences of the consumer goes to the imported wood because of the price
differentials. Islamabad timber market survey indicated that price of some most commonly used imported
timber species is lower than price of the local wood (similar species) for example:
o Imported sawn Kail wood is currently priced at Rs. 950/cft as compared to un-sawned local kail wood

MUJTABA HASEEB 5
priced at Rs. 1000-1400/cft while 30-35 % are losses when it is sawn so price gets up to almost Rs.
1900/cft in comparison of Rs. 950/cft of the imported kail wood (Table 3).
o Imported sawn Ashwood is currently priced at Rs. 2500/cft. Comparable is local Diyar rather ashwood
is better than Diyar. Local unsawned diyar wood is priced at Rs. 1500-4000/cft while losses are 35%
when it is sawn so price gets up to Rs. 5400/cft as compared to Rs. 2500/cft of the imported ashwood
.
Quality concerns: Demand for white ashwood is high for the construction due to its good grain quality
and fine finishing. Similarly quality of imported wood based products is good than the local one for
example presently the local pulp production is based on agriculture waste e.g. baggasse, wheat and rice
straw, cotton lint, waste paper, kahi (elephant/ river) grass. This agriculture wastage is used for producing
short-fibre pulp. Consequently, the quality of paper produced in Pakistan is inferior as compared to the
imported one.
Shortage/lack of desired species (non-diversification): One of the important factors is that preferred
species of wood are not available. Some of the preferred timber species like Ash wood (air dried),
Mahogany, Red Marinetti, Yellow Marinette, Burma/African Teak, Oak, etc are not locally available. So
these wood species are imported to fulfill the demand and local market is having these species in ample
quantity.
6. Price Structure of Local and Imported Wood
As more and more construction work is taking place, the demand for timber is bound to rise and hence the prices
are increasing rapidly. The prices vary for different species due to its quality and specie characteristics. Even
within each of wood specie price varies from minimum to maximum range depending upon its quality and
producing area due to transportation cost and finishing. Current price structure of local and imported wood is

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