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NATIONAL FOREST PRODUCTS ASSOCIATION: TIMBER SHORTAGE SEEN BOOSTING LUMBER PRICES

 WASHINGTON, Dec. 29 /PRNewswire/ -- Lumber markets for 1993 are potentially strong, but an uncertain timber supply has cast a shadow over forest industry performance, according to an industry forecast, the National Forest Products Association (NFPA) said today.
 The equivalent of nearly 20 percent of the nation's softwood lumber consumption and 30 percent of its domestic production are in limbo until the federal forest controversies of the Pacific Northwest and Northern California are resolved, said the report from the National Forest Products Association.
 Timber sales in the region are at a virtual standstill because of court injunctions and harvest restrictions over old growth forests and a threatened species, the northern spotted owl. President-elect Bill Clinton has promised a summit sometime next year to resolve the crisis.
 "With no relief in timber supplies, lumber and panel prices, now 35 to 40 percent higher than a year ago, could rise to unprecedented levels," said Con Schallau, NFPA chief economist and author of the report.
 Based largely on anticipated growth in new housing of 100,000 to 200,000 units, the report, entitled "The Outlook for 1993 -- A Year of Change," predicted an increase in softwood lumber consumption to 48 billion board feet in 1993 from 45 billion board feet in 1992.
 But it warned that reaching those figures would be possible only if supply is available at prices that won't force substitution of non-wood materials.
 "At a time when demand for forest products shows definite signs of improving, the supply of timber in much of the West is at an all-time low," said Schallau.
 The report said imports from Canada and increased production in the South can fill some of the vacuum, but with "rising timber and product prices."
 And, said the report, the "stranglehold" on federal timber sales extends to other regions as well. Sales from all national forests have declined steadily since fiscal 1990, when 9.2 billion board feet were sold, to fiscal 1992, when only 4.45 billion board feet were sold.
 With reduced timber sales bringing higher lumber prices, builders will try to reduce costs by building smaller homes or using substitute materials, the report said. In some cases, it predicted, some homebuyers will be forced out of the market.
 In another area, the reports said exports in 1993 could be about the same as 1992, when a record of $6.7 billion was set. Economic difficulties in Germany and Japan may slow exports to those countries, but that could be offset by exports to Mexico, which has become the U.S. industry's third-largest export market.
 -0- 12/29/92
 /CONTACT: Barry Polsky, 202-463-2467, or Kevin Brett, 503-222-7456, both of National Forest Products Association/


CO: National Forest Products Association ST: District of Columbia IN: PAP SU:

LM-SG -- SE007 -- 0367 12/29/92 14:23 EST
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Date:Dec 29, 1992
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