* Dry, hot summers create favourable conditions for beetles
* Timber prices plunge as market is flooded with cut wood
* Low-quality wood essentially worthless
* Shortage of wood forecast over next 20 years
By Forrest Crellin
July 19 (Reuters) - Long spells of hot, dry weather have brought the worst bark beetle infestation in two decades to eastern France, ruining conifer forests and causing timber prices to plummet as forestry firms fell trees before they are damaged.
Timber industry organisation Fibois Grand Est estimates that three to four million cubic metres of French public forests will be infected this year, equivalent to half the annual supply of spruce wood. In 2018, 1.2 million cubic meters were infected, costing the industry nearly 80 million euros.
Eike Wilmsmeier, Director of France's National Forest Agency (ONF) for the region said that after a very dry 2018, 2019 looked set to be another difficult year, as the beetle infestation has spread widely across eastern France.
"We don't know how far it will go, we don't know when it will stop," Wilmsmeier said.
High-quality softwood prices have fallen to 60 to 80 euros per cubic meter for standing stem timber, or timber that still needs to be cut, down around a third over the last 18 months as landowners flood the market with infested trees as well healthy ones before they are attacked.
Low-quality wood for paper pulp wood and firewood, which accounts for about 30 to 40 percent of low-altitude harvested wood, has become essentially worthless, fetching about one euro per cubic meter for standing stem timber.
The volume of affected conifer trees in northeast France is already much higher than during the previous beetle infestation in 2003-2007, from which the forests took years to recover.
Bark beetles normally reproduce twice a year but last year were able to reproduce three times due to the hot, dry weather. Freak storms that knock over trees, which rot and become breeding grounds for the bugs, have helped multiply their numbers by several magnitudes.
Ernest Schilliger, manager of Schilliger saw mills on the French-German border, said he was seeing nothing coming in but infected timber.
"Transportation costs sometimes outweigh the value of the timber," Schilliger said.
Industry specialists see a risk of deforestation in the Grand Est region as private forest owners fell healthy trees to provide unaffected wood to sawmills, leaving thousands of hectares of land barren as many are reluctant to replant.
To prevent deforestation, the ONF - which manages public forests - has warned against cutting live wood and is only felling dead or infected trees on public land.
"We will have a lack of wood in 20 years," said Damien Francois, head of research and development for private timber collective Forests and Woods of the East.
At least ten percent of the wood his collective manages is affected by the pest, according to a survey conducted in the winter.
Around three-quarters of forests in France are privately owned and often grow a higher quantity of firs and spruce, which have a growth cycle decades faster than oak or other hardwoods, making them better to harvest for profit.
However, landowners sometimes plant conifers at low altitudes where it does not get cold enough to kill the bugs, or plant them in monocultures, making them more vulnerable to pests.
Francois and ONF's Wilmsmeier estimate there are 60 to 100 million cubic meters of infected wood currently on the market throughout Europe, mainly in Germany, Switzerland, Austria and the Czech Republic, which are some of Europe's top softwood producers.
Piotr Borkowski, of Brussels-based European State Forest Association (EUSTAFOR) said that the beetles have become a major problem, spreading throughout Europe in recent years.
The Czech Agricultural Ministry estimates 18 million cubic meters of trees were infected in 2018, 10 times more than previous years. (Reporting by Forrest Crellin Editing by Geert De Clercq and Kirsten Donovan)
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