Cedar and redwood push on amid Canadian softwood duty

rnHE Canadian softwood duty is duties and in-roads being made by I impacting the specialty softwood composites." market, providing a slight boost to Sprenger expects sales to stay domestically grown redwood and a strong through the building season and small impediment to Canadian-raised into the fall, and revenue to be ahead rir'i(nespite ttre impact of the counter- yard capacity, putting up a storage vailing duty that has been levied on facility of about 20.000 sq. ft. that will sgflw-ood iumber, the"l'demand for be completed this fall," he notes. cedar remains strong, but tariffs and "Business has been very good, the duties pose danger," admits Doug Northeast market has been holding up Clitheroe, general manager-marketing quite well. but what will happen in the and' sales for International Forest last quarter of this year if the price of Products and chairrnan of the Western cedar increases?" wonders Bernie

"The price increase is being driven Branchburg. N.J. "Most o[ our prodsolely by the countervail lumber duty ucts are in the high grades which and is being absorbed by the market- means cedar is at the top end o[ the place," says Clitheroe. "However, the market. We don't know whether the duty has widened the price gap consumer will accept that. Right now between cedar and competing non- we are marketing the inventory we wood products, and tlere is concern bought over the last couple of months that tbe price of cedar may reach a when a window of opportunity prepoint at which consumers will begin to sented itself." consider using alternative products.

"Cedar prices did not reflect the Overth€"longei'term', the move to full impacl of the countervail duty in higher prices can cost us market share the spring because much of the cost of unless the industry tells the consumer cedar in the inventory was absorbed why they are required to pay a premi- by the marketplace." says Chris umforcedarproducts." Lynch, Reid & Wright, Broomfield,

WRCLA is working with the Co. "Most of the projects underway provincial governnr€nt on a matching had been planned well in advance, so funds program to promote cedar. they went ahead even though the cost Clitheroe says, "Our objective is to launch a promotional program next yer, aimed at supporting cedar's position in key North American markem."

"The demand for building materials has been quite shong in ttre area we cover-Minnesota, lowa, Nebraska, and North and South Dakota-and cedar that accounts for about one-third of our business has been doing very well," reports Steve Sprengcr, Sprenger Midwest, Sioux Falls, S.D. "lVe educates retail lumber dealers, especially those who work at the counter. vol- of cedar had,,incrg But we are very concerned prices for cedar will uct onqe been used. :On uS, ,a$le ':r:l::i:r::: bixween clqei$g edl{er I

He says, "Our business is strong and better than it was last year. We haven't seen any speed bumps yet."

Redwood, conversely, stands to gain from the tariffs. "The purpose of the countervailing duty is to provide a level playing field for domestic lumber products and those imported from other countries," says Chris Grover, California Redwood Association, who argues that subsidies give Canadian producers an unfair advantage in supplying U.S. markets. "This is particularly true when comparing Canadian cedar to California redwood."

He explains that redwood grows almost entirely in California, with just a few groves over the Oregon border. "Nearly all redwood lumber comes from privately owned timberlands," Grover adds. "None comes from U.S. National Forests. As a California product, redwood is grown and harvested under some of the most protective environmental safeguards in the world, which adds considerably to the cost of bringing products to,market. When imported lumber products are given subsidies by their governments, it undermines the effectiveness of domestic environmental protections and hurts U.S. businesses."

Grover concludes: "The U.S. has a strong appetite for softwood lumber, including specialty products such as redwood and cedar. These products are useful, beautiful and unlike many non-wood substitutes, they are a renewable resource. Redwood lumber is being grown and harvested in a sustainable manner. It is probably too early to judge any effect from the countervailing duty, but lumber producers report that today's redwood is and available. It can comwith cedar and any other product