Meltdown hits wood industry

AP

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ROME (AP) — The economic crisis and collapse of the housing sector will result in reduced demand for wood and wood products, a U.N. report on forests said Monday.

The report said that the world lost some 18.04 million acres (7.3 million hectares ) of forests each year between 2000 and 2005.

The wood industry has suffered a major blow from the crisis of the housing market, which in the United States alone has seen housing starts drop from 2.1 million in 2006 to less than 800,000 in 2008, the report said.

It warned that the global economic downturn might have negative effects on forests such as increasing illegal logging or leading governments to abandon green policies as they focus on turning around the economy.

The report by the Food and Agriculture Organization said initiatives such as those for reducing emissions from deforestation and forest degradation could face problems, while agricultural land could increasingly expand into forests.

The Rome–based agency said that dropping population, moderate economic growth and growing concern for environmental protection will help forests in Europe grow.

Deforestation is unlikely to drop in South America and Africa, it said. In Asia, forest area will stabilize and even increase in most developed countries, but declines are expected in low– and middle–income countries as a result of expansion of agriculture.