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I like your theory better than the conspiracy theory.

However, I wonder if it is so simple. Just because currencies have moved doesn't mean that the Chinese would have low enough costs to enable exportation. I'll confess up front to being ignorant on the lumber and paper industries. That said, I have three different hypotheses, all based in ignorance of facts and pure speculation. :x

1) China and Russia may (just a guess, I really don't know) finally have a large trade in Russian trees that were simply sitting ther eunder communism, and China is turning them into lumber for internal uses and paper for export. Currency valuations help of course to defer the expense of overseas export.

2) Canada may (just a guess, I really don't know) sell a lot of raw timber to China. China turns what it can into lumber it is voraciously devouring as it grows by leaps and bounds, and uses the "scraps" for making paper, which it then turns around and exports to the US, underbidding Canadian paper mills. :o

3) Environmental regulations and voluntary set asides by conservation groups in Canada and the US may (yeah yeah, I'm just guessing again) be raising prices enough to make importation from China a factor.

I suspect a combination of all four (including foreign exchange rates of course) are at play here.

Oh, I'm sure that there are other factors as well. I don't *think* Canada sells raw lumber to China (and if it did, Canadian lumner would be 40% more expensive to the Chinese as well). The exchange rate movement is probably not the whole story, but it appears to account for most of the change in prices.

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