An equilibrium model of Pacific Rim trade in small softwood logs

Abstract

Small, lower-graded logs, corresponding roughly to British Columbia's grade 4 sawlogs, make up about 44% of all Pacific Rim softwood log trade, or about 35% of total trade in coniferous sawn wood and roundwood. The 1983 small-log volume of 9 000 m3 is expected to grow to 12 300 m3 in 1990, to 14 000 m3 in 1995, and to be accompanied by a 13% rise in prices at Pacific Coast docks during this decade. Prices of small logs are projected to be level during the early 1990s. This analysis was performed with an equilibrium model of the log economies of each supplying and consuming nation around the Pacific Ocean. Individual export supply and import demand functions were summed to a classical market solution, with reference to free alongside ship prices along the western shores of North and South America. Key assumptions are constant exchange rates and secularly stable economies.