Softwood lumber demand is expected to rise in the coming months as reconstruction efforts get underway.

US lumber yards are already stocking up in the aftermath of hurricanes Katrina and Rita, according to reports, but Canadian supplies to the United States, which now account for one-third of the US market will likely fall as production in its eastern province of Quebec is reduced and Canada looks for new markets to bypass the United States.

"There may be more requests for softwood lumber," Canadian trade official Andre Lemay told AFP. "If there is a big requirement for more wood, that could drive the cost of wood up."

"Katrina has added a new dimension to all this. It would definitely add to the requirements of rebuilding," Lemay said.

Canadian International Trade Minister Jim Peterson announced Tuesday trade missions to 30 countries to pitch its softwood, including India, Mexico, South Korea, France, Australia and Egypt.

Meanwhile, Quebec province, which along with the western province of British Columbia account for half of Canada's softwood production, recently legislated a 20 percent reduction in its harvest.

"This will have quite an impact on Canadian softwood lumber exports to the United States," Lemay said.

It is too soon to estimate the actual numbers, however, as mayors and governors from the battered regions are "only starting to put together their estimates," said US embassy spokesperson Victoria Terry.

The United States has collected some five billion dollars (four billion US) in duties on Canadian softwood imports since May, 2002, claiming that Canada unfairly subsidized its industry and dumped cheap wood in the US market.

Canada wants the money refunded and open access to the US market restored.

Talks were halted mid-August after Canada walked away to protest its biggest trading partner's handling of a longstanding trade dispute.

The United States announced it would continue to collect duties on Canadian softwood imports, regardless of a unanimous decision by a North America Free Trade Agreement panel to reaffirm an earlier Canadian victory in the bitter saga between the two neighbours.

The panel established under NAFTA had previously ruled that Canadian imports of softwood lumber had not harmed the US lumber industry.

The White House was said to be considering temporarily reducing or eliminating tariffs on Canadian softwood lumber used for reconstruction, Canadian officials said.

"There has been some mention from the (US) president's office that the US administration may reduce or wave some of the duties," said Lemay. "We'll have to see what the administration does."

A spokesperson for the US embassy in Canada, however, denied such a proposal was being considered.

Meanwhile, US Ambassador David Wilkins pressed the Canadian government to return to the table Tuesday to negotiate a settlement.

"This has been debated time and time again," he told reporters. "There was a NAFTA ruling, followed a few weeks later by a WTO ruling that seemed to favour the United States. Right now there's some 20-odd challenges that are being defended by the United States. You know, it just never ceases."

Former US Ambassador Paul Cellucci also said Tuesday at a luncheon in Toronto to promote his new book: "I think with the need for lumber in the United States to rebuild homes in the wake of the hurricanes, this might be an opportune time to get back to the bargaining table."

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