Restricted supplies of sapele
The rains have now come to an end in the tropical supplying regions of Africa north of the equator and, in early January, operations are just getting underway following the lengthy Christmas slowdown. Lack of availability is likely to be a persistent problem for the African tropical hardwood trade owing to increased logging controls and limited forest resources in some countries. However, if the euro continues to strengthen against the dollar and British pound, it could have a dampening effect on African prices (which are mainly quoted in euros). But, for the time being, the leading shippers in Cameroon are reporting that orders for sapele are booked through until April. Page 3

Move away from iroko
The move away from iroko by importers in both Ireland and the UK is becoming increasingly evident. The trend is consistent with limited availability of iroko from Ivory Coast and Ghana which has led to rising prices. Iroko is being substituted in joinery applications by other African species including framire and sapele, Page 3

Malaysian lumber turns a corner
The market for Malaysian dark red meranti sawn lumber may be turning a corner. After several months characterised by sluggish demand in Europe and sliding prices, two factors have come into play since the beginning of December. First, production has slowed considerably with the onset of the monsoon and lengthy holiday season throughout the Far East. Second, the weakening dollar has increased the price differential between dark red meranti and sapele. CIF prices to European importers for dark red mernati have fallen by up to 20% over the last 5 months. Page 4

Indonesia imposes plywood quota
In a move designed to counter the long term weakness in plywood prices, and to improve quality control over Indonesian plywood, the Indonesian Government and APKINDO have announced their intention to implement a “self-imposed” quota on the export of plywood. Worries over US economy intensify It is clear that underlying worries about the US (and hence the world) economy are intensifying. There is great uncertainty over whether the economy will achieve a “hard” or a “soft” landing. Page 6

Mixed prospects for US hardwoods
Slowing US demand and weak currencies in export markets led to sliding prices for American hardwoods during the second half of 2000. Prospects in 2001 are mixed. US domestic demand is likely to be slower than in 2000, but demand in Europe may pick up again as the euro strengthens and importers take steps to fill gaps in depleted stocks. Demand in the Far East during 2000 may suffer from slowing economic growth in that region. Japan’s economy still looks fragile and the cooling US economy may lead to declining export opportunities for Asian manufacturers. However China, which significantly increased imports of American hardwoods during 2000, may continue to provide new opportunities, particularly following accession to the WTO in early 2001. Pages 6/7/13

Signs of Asian slowdown
The signs are increasing that Asia’s recovery will lose steam during 2001. After expanding by 7.8% in the first half of 2000, real GDP grew by only 3% or so in the fourth quarter. Overall growth may slip by two percentage points in 2001, to only 5.4%. To a large extent, the slowdown reflects declining opportunities on export markets, notably in the US. Page 4

European beech hit by overstocking
The Western European beech market continued to experience difficult trading conditions during the closing weeks of 2000, afflicted by relatively high stocks and slow sales both in domestic and export markets. Page 11

European oak more bouyant
Demand for European oak is more bouyant. European stave producers have been busy, creating strong demand for the best quality oak logs. There continues to be good demand for lower grades of European sawn oak lumber for flooring applications in several European countries. Interest in European sawn lumber has also been stimulated by the relative weakness of the euro against the US dollar, which has encouraged a search for substitutes for American white oak. Page 11

No let-up in mahogany demand
The rains started in northern Brazil in early December and new supplies of most tropical timber products from that region will be constrained until May or June. The vast majority of the relatively limited volumes of Brazilian mahogany extracted during the last logging season has been destined for the United States in air dried form. Despite indications that the US economy is cooling, there seems to have been no let up in demand for Brazilian mahogany, and prices continued to rise throughout the season. However trading this year has been marred by bureaucratic delays. Page 12

Rate of deforestation slows
FAO’s most recent assessment of the world’s forests shows that the rate of forest loss worldwide has declined somewhat over the last decade; but not by much. Page 14

Progress towards global forest certification framework
Progress towards the development of a global framework system for mutual recognition of forest certification schemes was made at a seminar in Brussels at the end of 2000. Such a framework holds out the promise of much improved supplies of certified wood products, while at the same time minimising confusion amongst consumers. It may also help to rectify the current bias in forest certification towards wealthier forest owners. Editorial Page 3, reports pages 1/8/9/10




Sapele supply lower this year
In the midst of the dry season, there are regular shipments of sapele from Cameroon, and there are reports that relatively large stocks have built up in northern European markets. However continuing delays in the issue of new logging licenses in Cameroon have meant that most consignments are running late. New concession regulations have meant that overall levels of supply this year may be significantly lower than previous years. Stocks of logs at mills are reported to be below levels common at this time of year. Page 3

Partial switch to meranti forecast
FOB prices for sapele are holding firm for the time being despite continuing price weakness of Malaysian meranti, a competitor in northern Europe. The price gap is now so wide that at least a partial shift to dark red meranti in northern Europe is widely expected during the first half of 2000. Since sales of sapele are generally invoiced in euros and sales of meranti in dollars, the switch may be more pronounced if the eurodollar exchange rate continues to strengthen. Page 3/4

High meranti inventories
Meranti sawn lumber inventory levels remain high in northern Europe, and some of the largest European importers report that stocks are moving only slowly despite weak prices. Importers complain that having bought stocks earlier at higher prices, they are now losing money as forward prices have fallen. Forward prices for dark red meranti sawn lumber remained very weak in the run-up to the Chinese New Year vacations, as shippers sought to offload remaining stocks. Page 4

Liberia prospects uncertain
Future trade prospects with Liberia are uncertain. The USA and UK are working on a UN resolution that would impose mandatory worldwide sanctions on Liberia until it ceases supporting the Revolutionary United Front (RUF) rebels in Sierra Leone. Over the last two years Liberia has emerged as a significant supplier of logs to France (notably niangon), to several southern European countries, and to the Far East. Page 3

Amazonian off-season
The Amazonian region is now well into the rainy season, and log supplies will inevitably tighten until May or June. Shipments of Brazilian mahogany sawn lumber are now drying up. However the export ban on mahogany and cedar sawn lumber introduced in Peru at the start of the last logging season is being relaxed to some extent. Page 5

Japan’s tropical wood downturn
The latest projections released by Japan’s Timber Supply and Demand Conference indicate generally falling levels of demand during 2001. Overall imports of logs, lumber and plywood are forecast to fall by 2.3% during 2001 compared with the previous year. Demand for Southsea and African logs is expected to see the highest rate of decline, down 10%, continuing a trend underway since the early 1990s. Pages 1/4

Uncertain US domestic demand
US domestic demand for sawn hardwood lumber has slowed since November as the economy has cooled. Market developments are hard to predict given the schezophrenic state of the US economy. The manufacturing sector, including furniture, is in the grip of a sharp downturn. On the other hand, there are still healthy levels of consumer confidence, which should be boosted further by interest rate cuts and plans by the new administration to cut taxes. Despite talk of recession, the evidence still points to a soft landing in the US. Pages 6/7, Editorial p.2

Good American prospects in Europe
Market prospects for American hardwoods in Europe appear better now than in the second half of last year due to the strengthening euro-dollar exchange rate, low inventories, and forecasts of solid economic growth in Europe this year. Demand for US hardwoods in many Asian countries, which are heavily dependent on exports of manufactured products, will be affected by developments in the US economy. Pages 6/7

Beech market turmoil
Over a year on, the market for European beech continues to feel the effects of the central European storms during December 1999. Demand this season both in Europe and China, the major export market, has been subdued due to excess stocks which built up during the course of last year. Severe imbalances have also arisen on the supply side. By contrast, demand for European oak remains firm. Page 8

Strong showing at furniture fairs
Hardwoods featured strongly in many product lines of international furniture producers in the first of the major European furniture shows during 2001, the Paris Salon du Meuble and the Cologne International Furniture Fair. The trend of European markets continues to favour temperate hardwoods with oak and beech still leading species. Cherry and to a lesser extent maple are also holding their appeal for European manufacturers. Page 15

Middle East special
Hardwood market prospects in the Middle East region are generally good. In the Eastern Mediterranean, the direction of the peace process has created uncertainty but analysts expect that if a major conflict is avoided, economic growth in the region should remain strong. Oil price movements are a concern in some countries of the Gulf region, however population growth is very high boosting demand for housing and other infra-structure. Economies are also diversifying, generating demand for hardwoods in other sectors, notably furniture and tourism. This month’s special feature considers market prospects in five of the leading hardwood markets of the region: Saudi Arabia, United Arab Emirates, Egypt, Turkey and Israel. Pages 10-13




US uncertainty
Uncertainty surrounds the likely depth of the US economic slowdown. Most analysts remain confident that the US will not go into recession. Nevertheless, recent trends have been gloomy. The average prediction for growth in 2001 in The Economist’s Poll of Forecasters has fallen from 3.5% in October to 1.8% early in February. Consumer confidence is key. At present many US consumers still believe Mr Greenspan, Chairman of the Federal Reserve, can avert recession. As long as this faith holds, it will help to underpin confidence. Page 6

US domestic demand falters
Meanwhile, US domestic demand for hardwoods is feeling the cold from the slowing housing and furniture sectors. There are high inventories in the furniture sector – at both retailer and manufacturer level - which built up as sales slowed during the second half of last year. Overseas suppliers of furniture to the US market, notably China, also have large inventories of merchandise ready to be shipped when US retail sales improve. More positively, AKTRIN believe that the US construction sector may revive again later this year as the benefits of recent interest rate cuts begin to filter through. Page 6

Good US prospects in Europe…
Prospects for American hardwood exports to Europe this year are reasonably good. The weakening of the US$ has led to weakening in CIF prices on some regular items, although not dramatic, which has encouraged stock filling on some items. However buyers throughout Europe are likely to remain cautious. Page 7

…but Asian prospects mixed
Japan’s economy is stagnant, while the export-led growth of some Asian nations, notably Indonesia and Thailand, may be heavily hit this year by cooling of the US economy. However, despite recent overstocking in China, market growth is expected to continue there this year. Pages 5/6/7

Wet in the Amazon…
The Brazilian Amazon is in the midst of the rainy season. No significant mahogany shipments can now be expected until May at the earliest. Now that the US economy is cooling, some uncertainty surrounds the strength of demand for mahogany during 2001. So far there are few signs that US buyers’ interest in mahogany is waning and prices remain firm. IBAMA has announced that sawn lumber export quotas for mahogany for the first half of the year will be limited to 20,000 m3. Page 8

…dry in Africa
The major supply regions north of the equator in Africa are very dry. Although resource and forest policy constraints now severely restrict overall harvest levels, the weather has meant that logs are moving well for the time being. Consignments continue to run late, but shipments of African hardwoods to European destinations have been arriving regularly over the last month. Sapele prices remain relatively stable with perhaps some hint of weakening. Page 3

Cameroon restricts logging
The Cameroon authorities have been reducing the legally allowable cut and tightening rules for concession allocation. Log production in Cameroon fell from 3,358,000 m3 in 1997-98 to 2,500,000 m3 in 1999-2000. The export ban on the leading commercial species implemented in mid 1999 has been effective in reducing the volume of Cameroon log exports from 1,562,000 m3 in 1997-1998 to 711,000 m3 in 1999-2000. Over the same period sawn lumber export volumes almost doubled from 391,000 m3 to 801,000 m3. Pages 1/4

Inward investment in Congo
Significant new investments in wood processing in Congo (Brazzaville) have been announced over recent months - a reflection of government policy to ensure that 60% of total annual log production (currently around 500,000 m3) is processed domestically. The Portuguese enterprise FORALAC, has announced their intention to invest US$11 million in integrated wood processing facilities, including sawing, planing, kilning and a veneer plant, in the southern region of the country. FORALAC, will exploit forest concessions totalling 765,752 hectares, and will have capacity to convert 100,000 m3 of logs each year. Page 3

Meranti prices stabilise
After months of weakness, there are signs that forward prices for Malaysian dark red meranti sawn lumber may have stabilised. It is now the monsoon in Malaysia. This coupled with the Chinese New Year at the end of January has meant that production has been limited and there is talk of green log prices strengthening. This may begin to feed through into rising prices to European importers over the coming months. But, for the time-being, Europe’s forward market for dark red meranti is still suffering under the weight of stocks built up during the course of last year. Page 4/5

Beech markets still slow
European beech markets are still slow due to much lower demand than last year in China, and continuing weak buying by German manufacturers. The high stocks of beech that built up in China last year have been much reduced. However this has yet to feed through into any major increase in beech purchases. The European oak market continues to tread a very different path. At recent auction sales in Germany and France, prices for higher grade European oak logs have remained firm. Pages 6/7

Tropical recovery?
Tropical wood imports were on the rise into two of Europe’s leading hardwood markets last year - Italy and the UK. UK imports of tropical hardwood logs and sawn lumber during the first nine month of 2000 were up 13% by volume on the same period in 1999. Between January and June last year, the volume of Italy’s tropical log and sawn lumber imports were up 13% and 12% respectively. Italy page 9, UK page 10




2000 - a boom year for EU imports
The most recently available Europe-wide data - for January to September 2000 - indicates high levels of hardwood imports last year. Tropical hardwood imports were running at particularly high levels with rises recorded by several major markets including Italy, the UK, the Netherlands, and France. EU imports from Malaysia and Cameroon were significantly higher than the previous year. Pages 12/13/14

US exports hit record levels
US export volumes during 2000 were the largest ever recorded, at 2,950,198 m3, 5.7% higher than the previous year. Exports fell just short of the 3 million m3 mark widely predicted in early 2000 due to slowing sales in the second half of the year. Overall US hardwood lumber exports by value reached $1,428 million during 2000. This figure represents a 5.3% increase on the previous year and is just $4 million short of the record achieved in 1997. Page 1

US domestic market softens
US domestic demand is softening and sawmill production is being cut back. Supply is still in excess of demand for many American hardwoods and US exporters are reported to be offering deals at low prices. However there is no apparent easing in log prices at the forest, so US millers margins are being shaved. Page 7

Cautious American export markets
The US dollar remains relatively strong and keeps imported prices of American hardwoods high against some other hardwoods – notably European - despite recent price cuts. Export markets for American hardwoods are highly competitive. Importers are aware that US stocks are high and are therefore maintaining a cautious approach to forward buying and pushing for lower prices. Nevertheless, price cutting and low stocks in several markets has encouraged some pick-up in export demand since the start of the year. Page 7

Subdued trade in European beech
Enquiries for beech from China and Hong Kong increased after the Chinese New Year, however buyers remain cautious following problems of over-stocking last year. Sales of beech to China/Hong Kong this year are expected to be much lower than during 2000. Supplies are also more limited this year. Production in Germany and France is focused mainly on conversion of beech stored in irrigated yards after the December 1999 storms. This combined with limited kiln capacity has reduced availability of high quality sawn beech. Pages 9/10

Heavy African arrivals
African tropical hardwood production is currently in full swing as the dry season nears its end. Reasonable volumes of sapele, the principal redwood, have been arriving at European destinations since November last year. Onward prices to manufacturers for stocks of sapele on the ground in Europe have tended to weaken. There are reports that interest in the forward market in Northern Europe, notably the UK and Ireland, has waned over recent weeks. However, demand for sapele remains bouyant in the important Spanish market. Page 3

Liberia escapes timber sanctions
Following pressure from the Chinese and French governments, in March the UN dropped its threat to impose trade sanctions on Liberian timber products. Page 3

Still no meranti price rise
The forward market for meranti in all the leading European markets - the Netherlands, Belgium, the UK and Germany - remains extremely slow. Expectations last month that prices may be about to rise in response to tightening supplies, have so far failed to materialise. Current weakness in the European market for meranti reflects overstocking following excessive imports last year. Continuing poor weather conditions and weak markets have meant that sawn lumber production throughout the Far East is still very limited. Page 5

China’s imports continue to rise….
During 2000, China imported 13.6 million m3 of logs during 2000, a 34% increase on the previous year. Hardwoods accounted for 53% of total log imports by volume and 77% by value. The volume of China’s sawn lumber imports in 2000 increased 65% compared to the previous year. By value, sawn lumber imports were 91% higher than the previous year at US$982 million. Most sawn lumber comprised tropical timbers from Indonesia and Malaysia. Page 5

….while Japan’s imports fall
Japan’s imports of southsea logs reached 3,034,000 m3 during 2000, an 11% decline compared with the previous year. However southsea sawn lumber imports increased 5.6% to 973,000 m3. There was a particularly significant increase in imports of planed sawn lumber. Japanese wood processors are facing increasing competition from processors elsewhere in Asia. Page 6

Plywood prices below break-even
Despite limited log supplies in the Far East due to heavy rains, Indonesian plywood prices show no signs of strengthening. As Asian demand remains weak, and China emerges as a competitor, there is a threat of wide-spread mill closures. Page 15

Mahogany prices stay firm
US demand and prices for Brazilian mahogany remain as firm as ever. Given the considerable size of the US market, even during an economic slowdown, and the major restrictions on mahogany harvesting throughout South America, this situation is expected to continue. Page 9

Peru plans new export restrictions
Restrictions on exports of mahogany from Peru have been relaxed and some limited consignments are now leaving the country. However the Peruvian authorities are planning to implement new regulations requiring all mahogany and cedar to be machined prior to export. Page 9




Indonesia bans trade in ramin
From 1 May, the Indonesian government banned the harvesting, transportation, processing and export of ramin. The Indonesian government has also written to the CITES Secretariat requesting that Indonesian ramin be placed on Appendix III with a zero quota. This would enable importing countries to use domestic CITES legislation to seize Indonesian ramin, and would come into effect in mid-July. Page 6

Meranti remains depressed
Since the start of 2001, the European market for Malaysian sawn lumber has suffered from excess stocks built up during 1999. By end April, there were few signs of a pick up in demand or prices. All the major markets, including the Netherlands, Germany, Belgium and the UK, report subdued activity. The monsoon, only now beginning to abate, together with very weak demand in Europe and Japan, has meant that log and lumber production levels in the Far East have been severely curtailed. Page 5

Teak lumber trade smothered in red tape
Global demand for teak remains good. However, new rules designed to tackle corruption and promote value added processing have effectively brought the export of teak boards from Myanmar to a halt. Page 5

African supply and demand finely balanced
Prices for African sawn lumber remain reasonably stable for the time being as supply and demand are finely balanced. One factor arguing in favour of weakening prices is a slowdown in forward buying, notably in Northern Europe, as stocks have built up and as global economic uncertainty has mounted. However other factors may counter-act this trend. Heavy rains have hit the main African supplying regions, while overall levels of harvest were restricted during the last logging season. Page 3

Ghanaian dispute
An attempt by the Ghana government to extend the 10% export duty currently imposed on air dried lumber to kiln dried has met with firm resistance from the timber sector. Many shippers have announced they will no longer export lumber until the tax has been rescinded. Negotiations to solve the dispute were on-going at the end of April. Page 4

Slowing production fails to halt US slide
As economic uncertainty in the US has mounted, market conditions for American hardwoods have become intensely competitive. Many mills are suffering from high stocks and cash flow problems, leaving little option other than to use price cuts as an incentive to stimulate business. Mills have been reducing output, but so far declining production has not had a significant effect on overall availability of both kiln dried and green lumber. A greater premium is now placed on control of expenditure, inventory management, sales expertise, and production efficiency. Page 7

Constraints on American exports
As US domestic demand has weakened, American producers have intensified efforts to increase export sales. Competition is intense, and several factors continue to constrain export sales, including the continuing strength of the US dollar and mounting economic uncertainty in some major markets, notably Japan and Germany. The most recent figures released by the US Bureau of Customs indicate that during the opening two months of this year, US hardwood lumber exports were down 10.2% by value and 7.3% by volume compared to the previous year. Pages 7,8

Chinese buyers slowly return to beech
Beech log production finished early in Germany this year due to low demand. Production of both beech and oak in France was very limited throughout the winter season as the French forest authorities restricted harvesting to storm damaged trees. Since late March there have been some signs of a minor recovery in Chinese demand for beech logs. However order volumes are still well down on previous years, while demand focuses heavily on the best quality logs and prices on offer are below shippers’ expectations. Last year China imported 880,000 m3 and 580,000 m3 of European beech logs and lumber respectively, significantly up on 1999. Page 10

New phyto-sanitary measures in China
The Chinese government has issued a joint circular requiring certification that all imports of logs are pest-free, effective July 1. The move may impact heavily on the trade in European beech logs Page 6

Global furniture slowdown?
Despite cautiously optimistic forecasts early in 2001 of favourable conditions in the world furniture market, fears are increasing that demand may be badly affected by the downturn in US fortunes and continuing gloom in Japan. Since the three main international European Spring season shows in Paris, Cologne and Milan, where the new ranges are displayed, the news has not been good. Although Paris did hold some good prospects for hardwoods with the first genuine signs of a return to oak, the show was followed by the bankruptcy of a leading French producer. Cologne probably produced more hopes than orders. Many foreign companies dependent on the German furniture market are reporting depressed demand in this new Spring season. There is greater optimism in the Italian furniture sector. Milan produced a positive show with 175,000 visitors - a record. Pages 1,2,11

US absorbs over 60% of mahogany
There is little change in the South American mahogany lumber export trade. Heavy rains are still affecting the main producing regions in Brazil, although these are due to end soon. Shipments are currently at very low levels and subject to severe delays due to difficulties of obtaining quotas and other export documentation. Recently released data indicates that the US now absorbs over 60% of the South American mahogany trade, which is worth about US$56 million annually Page 9




Easing African forward market
Demand for forward contracts of most African hardwoods has eased off in most European markets, including Spain and the UK. Slowing forward demand reflects reasonably high stocks in Europe and uncertainty over underlying economic conditions. Importers are also preparing for the anticipated slowdown in end-user demand over the summer months. Page 3

Meranti prices slide even further
The European forward market for dark red meranti and seraya remains very subdued. After a few months of stability at low levels, there are reports of even cheaper offers for meranti during May as mills are seeking cash to cover costs. The Japanese market for seraya lumber also remains weak, although prices in Japan are holding steady at low levels for the time being. Page 5

Glimmers of light in the US
In May, the US Federal Reserve reduced interest rates to 4%, the lowest rate in seven years. President Bush was also on track to introduce far-reaching tax cuts. These measures hold out reasonable prospects for better US hardwood demand later in the year. But, for the time-being, overall demand levels are subdued and the market is highly competitive. Buyers throughout the trading chain are tending only to replace rather than build inventories. Demand from the U.S. furniture sector is still confined, reflecting both current economic conditions and a longer term trend towards increased market penetration by overseas manufacturers. Page 6

US export markets competitive
Export markets for American hardwood are highly competitive. Buyers everywhere continue to adopt a wait-and-see approach to purchasing, an attitude encouraged by widespread perceptions of ready availability. As the domestic market has slowed in the U.S., many producers are seeking to keep as much volume moving on the international market as possible. Page 6 & 7

US production cuts begin to balance supply and demand
Hardwood saw mills in North America have responded relatively quickly to the downturn in demand by reducing production. Already there are signs that the price slide is slowing. Exceptions are tulipwood and ash, supplies of which remain in excess of demand. Page 3

Divided market for beech
Different market conditions prevail for unsteamed and steamed sawn beech. Availability of unsteamed and lighter sawn beech from new season logs - qualities preferred by many buyers - is relatively limited in Western Europe and prices have remained reasonably stable. By contrast, stocks of steamed beech in darker colours produced from storm felled logs remain very high, particularly in France. Demand for the latter product, which is of less interest to major buyers in China and Spain, has also been relatively weak. Supplies of sawn beech from Eastern Europe have been increasing over recent months, and there is intense competition for market share between Romanian, Croatian, Yugoslavian, Bulgarian and Ukrainian suppliers. Page 8

Switch to European oak may disrupt market
Due to low availability of green beech logs and subdued demand for beech lumber, many mills in Western Europe have switched to cutting oak. In France, there is high availability of oak logs from storm damaged forests. However it is not easy for specialist beech mills to switch to oak - raising concerns that inexperienced producers may disrupt the market. Page 8

Global Witness to monitor forestry in Cameroon
Global Witness, the UK based environmental organisation, has been appointed as an independent monitor of forestry operations in Cameroon. The organisation is also setting alarm bells ringing over logging operations in Liberia. Pages 3 & 4

Mahogany logging recommences
The rains in northern Brazil are now over and logging operations have recommenced. New season mahogany lumber should start to become available from Belem by end June. News of tightening environmental controls suggest harvest levels will be at least as restricted as last year, and shippers are already signalling their intention to push for higher prices. It remains to be seen whether these can be made to stick as the economy has cooled in the U.S., the dominant market for American mahogany. Page 4

Weak plywood demand
Indonesian plywood mills have reasonable stocks of logs at present, but export demand is currently subdued with weak buying in Japan and the U.S. UK demand for Far Eastern hardwood plywood remains steady at relatively low levels. UK importers are buying Far Eastern plywood principally from Indonesia, as Malaysian mills find prevailing European prices unattractive. Page 5

European hardwood review
Some highlights from our review of 2000:

  • The value of Germany’s imports of hardwood logs were significantly higher during 2000 than the previous year, while imports of sawn lumber were static.
  • By value, Dutch imports of tropical sawn lumber from Malaysia and Cameroon were up 45% and 75% respectively last year.
  • Belgium’s imports of tropical logs declined 24% by value during 2000, but the fall was more than offset by a 50% increase in tropical sawn imports
  • 2000 was a very bouyant year for the hardwood trade in France, Spain, Portugal and Italy. The value of imports of most hardwood products in all four countries was higher than the previous year
  • High levels of wood furniture import into EU countries suggest domestic furniture industries are coming under pressure Pages 1 & 9-15




Rain in Africa
The major African producing region are now experiencing heavy rains. As usual at this time of year, many mills are shutting down operations for maintenance work and vacations. European forward demand for African hardwoods is subdued as importers are still working through stocks built up earlier in the year and as the holiday season beckons. Worsening economic conditions in the Far East have led to slower buying there. However there are reports of reasonable forward demand for African hardwoods in the UK. Although there is talk of lower prices for certain species as demand has weakened, stocks in Africa are restricted for the time of year and many exporters have been unwilling to reduce prices to boost sales. Page 3

Meranti demand still very slow
Trading conditions for Malaysian lumber producers remain very difficult. Forward demand in Europe is restricted and is hampered by the strength of the dollar against the euro. There are also high stocks in continental Europe, notably in the Netherlands, the leading market for dark red meranti and seraya. Lumber production in Malaysia is very low this year, and inventories are well down on previous years. Page 4

US - Second half rebound?
US business conditions, while not good, do not appear to be getting worse. Most manufacturers are already in the throws of recession. But there is some good news. The housing sector continues to do well. Consumer confidence has been resilient. The economy may start to benefit later this year from tax cuts. These factors may allow America to climb out of its economic hole later this year. In the meantime, hardwood demand from US manufacturers has been poor. Pages 5 & 6

US export demand subdued
European demand for American hardwoods has been subdued during June, and is expected to wind down further during the summer months. European importers are being cautious, deterred by evidence of economic cooling, notably in Germany, and the strength of the dollar against European currencies. Buying of American hardwood lumber in Greater China has remained reasonably active, despite some Chinese furniture manufacturers reducing production in response to slowing export demand. Demand for American hardwoods in Japan, Indonesia, and South Korea has been subded during the second quarter of the year, but there has been more interest from Malaysia and Thailand. Page 6 & 7

European producers focus on oak
Western European producers of sawn hardwood continue to meet with poor demand. Stock levels of sawn beech, much of it steamed from storm felled logs, remain high in both France and Germany despite reductions in production. As beech production has been curtailed this year, European sawmillers have focused more heavily on oak. Although there has been solid demand for oak from stave, furniture and flooring manufacturers this year, it has been insufficient to soak up the extra volume. Page 3

Mahogany demand good
Brazilian mahogany log extraction has been delayed over recent weeks by rain, unusual at this time of year. However some Brazilian exporters have acquired stocks of mahogany and shipments are being made. As last year, the majority is being sent to the US in air dried form and demand is still good. Pages 14 & 15

Japan’s transformation
Weak market conditions, coupled with major changes on the supply side, are contributing to a transformation in the structure of Japan’s hardwood importing trade. Japan’s plywood manufacturers, a major source of demand for tropical logs, have been progressively switching to lower cost and more widely available softwood logs. Japanese manufacturers of wood products are coming under intense pressure from importers. Indonesian, Malaysian and, more recently, Chinese producers of lumber and plywood have been able to undercut Japanese mills. The value of Japan’s furniture imports shot up 17% during 2000 compared with the previous year to 329 billion yen. Pages 1 & 5

Editorial - a forecast
Economic data suggests that the second half of 2001 may be characterised by relatively subdued global demand for hardwoods. However this may be matched by relatively low levels of supply. Looking further ahead, many analysts are optimistic that the global economic downturn, while sharp, may be relatively short-lived. While many hardwood traders have been afflicted by slow demand and high inventories during the first half of 2001, market conditions may be reversed by the beginning of next year. There may be shortfalls in the supply of many species and grades as demand rises. Page 3

European hardwood review
More highlights from our review of 2000:
UK hardwood importers had a buoyant year during 2000, but conditions this year are less favourable.
Ireland reduced tropical lumber imports from Ivory Coast and Ghana last year, while imports from Cameroon leapt by 151%. Ireland is now emerging as a significant buyer of American white oak.
 Denmark’s hardwood imports rose strongly last year, but this year economic growth has been hit by concerns over the slowdown in neighbouring Germany
There was strong demand for oak from Sweden’s parquet flooring manufacturers during 2000. Construction sector activity in Sweden is forecast to grow more strongly than in any other EU nation this year.
Finland, although still a minor importer, was a growing market for high quality hardwoods last year
Greece also bought significantly more hardwoods during 2000. American hardwoods are coming under intense competitive pressure from Eastern Europe. Pages 8-13




African market finely balanced
Supplies of most African hardwoods are relatively restricted and demand has been subdued. Production is constrained by the rains and many mills have closed for maintenance work. Gabon, where there are reports of high stocks of okoume logs, is an exception. European forward demand has been quiet during the summer vacation period. Nevertheless, most African shippers seem in no hurry to offload stock and prices are generally firm. Many forward contracts are now being offered for November/December shipment at the earliest, which suggests that shippers’ order books are reasonably full. Pages 2 & 3

Meranti’s lasting depression
European sales and prices for kiln dried sawn lumber of dark red meranti/seraya remain depressed. Northern European importers bought heavily in Malaysian sawn lumber last year, and have been feeling the effects of over-stocking ever since. Market prospects during the second half of the year are uncertain. But it seems likely that, so long as prices for Malaysian sawn lumber remain reasonably stable – neither falling further, nor rising too fast - demand will gradually improve. There are already reports that low prices, and some expectation of rising demand after the summer vacation, has encouraged some European buyers to contract for new shipments in the autumn, although volumes are still limited. Page 4

Southsea log markets quiet
Weather conditions for logging in SE Asia have been good. However weak demand, particularly in Japan, has encouraged a reduction in logging in Sarawak. Log stocks in Sabah are also restricted due to continuing delays in the issue of logging licenses. This has resulted in supply shortages for many mills in Sabah, and there continue to be reports of closures. Logging operations in Indonesia have been proceeding well so that major plywood mills now have adequate stocks of logs. FOB prices for most Southsea log species remain weak. Pages 4 & 5

Rising optimism in the U.S.
The US economy is not yet in the clear, but continuing consumer confidence gives reason for hope. Trading conditions for American hardwoods are challenging, but there is cautious optimism that a better balance between supply and demand may be emerging. Cut-backs in production have meant that kiln dried markets in the US are reasonably stable, although in some areas supplies of green lumber are still well in excess of demand. Page 6

Caution in Europe
There is some optimism that European buyers of American hardwoods, who have refrained from building stocks for some time, will begin to re-enter the market in September. However, without a more significant shift in the euro-dollar exchange rate, buying is likely to remain cautious. Page 6

High stocks of European oak logs
On-going operations to recover storm-felled logs left on the forest floor after the December 1999 storms have meant that Western European sawmills and stave producers have built up high stocks of logs. However prices for high grade European oak lumber remains firm. Page 11

Steamed beech prices weaken
French and German sawmills continue to carry excess stocks of steamed beech produced from logs stored in irrigated yards and prices have been softening, particularly for lower grades. However, due to limited availability of new season logs, prices for unsteamed beech have been more stable and are now significantly higher than prices for steamed beech. Chinese demand for all forms of beech remains subdued. Page 11

Eastern promise
The American Hardwood Export Council’s (AHEC) South East Asia Convention, held in Guangzhou in southern China during June, demonstrated that, in this region at least, there is tremendous potential to develop new markets for hardwood. Pages 1, 8 & 9

Falling tropical production
ITTO’s latest Annual Review indicates that tropical log production and exports during 2000 continued at the low levels prevailing since the Asian crises in 1998, despite last year being a bouyant one for the international hardwood trade. Pages 12 & 13

Mahogany prices rise even higher
Brazilian mahogany prices have continued to rise this year as bureaucracy associated with the trade has mounted. Controversial regulations to increase value added production in Peru are also affecting the supply of mahogany this year. Domestic demand for tropical hardwoods in Brazil was firm during the 1st quarter of the year, but has now dipped as economic uncertainties have mounted. Pages 14 & 15

European hardwood review
EU-wide import data for 2000 reveals that:
EU imports of nearly all hardwood products were at high levels, reflecting the buoyancy of the EU economy last year.
The long term decline in EU imports of primary wood products from the tropics was reversed – perhaps temporarily – last year.
Of temperate hardwoods, EU imports of oak were particularly strong - a response to the fashion for oak in joinery and flooring.
 The USA dominated EU imports of temperate hardwood sawn lumber during 2000, but the data confirms anecdotal evidence of increasing competition for American suppliers from Eastern Europe.
EU hardwood veneer imports rose strongly last year in response to solid growth in the EU furniture sector, and the cost benefits of using veneer over solid lumber in a wide variety of applications.
 EU imports of added value products increased dramatically last year – vivid confirmation of increased overseas competition for EU manufacturers, and of the rapid trend towards relocation of manufacturing to low cost locations. Pages 10 & 11




Okoume markets over-stocked
African log markets are differentiated by weather conditions north and south of the equator. In Gabon south of the equator it is still the dry season and logging has been on going, although many companies have restricted harvesting operations in response to weak demand, particularly in the Far East. Slowing Far Eastern demand for okoume logs, Gabon’s major export species, has resulted in over-supply and weakening prices for this commodity. Supplies of African logs of the leading commercial redwood species from countries north of the equator are more in balance with demand and prices remain stable. Pages 2 & 3

African sawn market slow but steady
European demand for African sawn has remained reasonably steady on the ground during the summer, but importers have yet to enter the forward market in any volume and there has been heavy reliance on purchases from existing landed stock. Page 4

Mugabe in the Congo
The Observer, a national newspaper in the UK, reports that associates of President Robert Mugabe of Zimbabwe are planning “the biggest ever logging operation in the tropical rainforests of the Democratic Republic of Congo (DRC).” Pages 2 & 4

Meranti at bottom?
The market for Malaysian dark red meranti/seraya in Europe may have hit bottom at last. There are reports that the large stocks that built up in North Western Europe during the course of last year have been much reduced. In response to tight supplies, shippers are asking for higher prices, but it is still too early to know whether these will stick. Page 5

Depressed Asian log markets
Trading conditions for South East Asian logs have been depressed since the start of the year. Despite increasing government controls on logging in some areas – including Sabah and Papua New Guinea – and efforts in Sarawak to reduce production in response to low demand, prices for most species have been static or weakening. Japan’s market remains in the doldrums. China was buying strongly during the first half of the year, but reports of over-stocking began to emerge over the summer. Pages 5 & 6

U.S. production cuts begin to bite
Contrasting conditions are emerging in the American markets for kiln dried and green sawn lumber. The market for kiln dried remains intensely competitive and supplies for many items are still in excess of demand. However lower offers for higher grades and thicker sizes of kiln dried of particular interest on export markets, are now less common. Cuts in production are beginning to bite, and are already impacting on the U.S. market for logs and green lumber. This is expected to translate into higher kiln dried prices during the Autumn. Page 6

American export markets uncertain
There is still great uncertainty over export demand for American hardwoods during the second half of the year, but markets are likely to remain intensely competitive and price sensitive. Page 7

Mahogany quotas very low
Logging is progressing during the Amazonian dry season. IBAMA released export quotas for Brazilian mahogany and cedar in the second week of August which are extremely low and well below market expectations, leading to predictions of further price rises. Export markets for other Brazilian sawn lumber remain reasonably stable, however domestic markets have been hit by economic uncertainty in South America Pages 8 & 9

Forest certification under fire
The forest certification movement is coming under increasing fire from radical green groups, many of which are now calling for a return to campaigns aimed at forest preservation and boycotts of all tropical timber products. Pages 10 & 11

European hardwood review
First quarter data for the whole of the EU (table page 11) indicates that the overall value of imports of most hardwood products, excepting beech logs and sawn lumber, were stable or higher than the same period the previous year. Perhaps surprising given the strength of demand last year and anecdotal reports of market weakness this year. However it is likely that there was a more significant slowdown in the second quarter of the year as concerns over the global economy mounted. Highlights from specific countries include:
French hardwood imports were bouyant during the first quarter, notably tropical sawn from Brazil, but may have slowed since then as the economy has cooled.
German hardwood imports were weak during the first quater, confirming anecdotal evidence of a downturn in the German trade this year. Economic statistics emerging from Germany continue to be disappointing.
Italy’s first quarter import performance was variable. Imports of tropical logs were down 7%, but oak log imports were up significantly. Of all EU markets, Italy provides the clearest evidence of increasing penetration by Eastern European suppliers. Prospects in Italy’s hardwood market, although reasonable, deteriorated during the second quarter of the year. as economic problems have mounted.
First quarter import data indicates that the Spanish market remained one Europe’s most buoyant during that period. Economic growth has slowed since the start of the year, but Spain’s furniture sector is active and taking a larger share of the EU market
The UK hardwood trade had a fairly mixed first quarter. Tropical sawn imports were down due to over-stocking, but temperate imports, notably oak, were strong. Tropical plywood imports were also reasonably high, with a noticeable switch from Indonesian to Brazilian suppliers. Economic prospects in the UK have weakened this year, but construction activity is reasonably bouyant. Pages 1, 11-1




U.S. economic uncertainty
The terrorist attacks in New York and Washington on September 11th have added to the economic uncertainty in the United States. Nevertheless conventional wisdom is that the recession will be short-lived with a strong v-shaped rebound by the middle of next year. It is hoped that moves by the the Federal Reserve and U.S. Congress to pump billions of dollars of extra liquidity into the U.S. economy will stave off a more severe downturn in the short term. More profound longer term economic effects may result from the protracted war against terrorism. Page 8

American lumber production falls
American hardwood lumber production has been curtailed and is suspected overall to be down between 20% and 30% this year compared to last. There are signs that in some areas of North America availability of green lumber is now more closely matched to demand. Expectations that this will feed through into lower kiln dried availability later in the year has contributed to greater price stability. Pages 10 & 11

U.S. hardwood exports struggle
American hardwoods were struggling on world markets during the first half of this year due both to the continuing strength of the dollar and weakening global economic prospects. Overall exports of hardwood lumber were down 13.3% by value and 10.5% by volume between January and June this year compared with the same period in 2000. Page 1

Difficult times for European beech
Continental European suppliers of beech sawn lumber continue to report high stocks, weak demand and pressure on prices. Sales are particularly weak in Germany. In China, enquiries for sawing and veneer quality beech logs have increased, but price expectations are low and quality specifications high. Demand and prices for higher grades of European oak and for other European species are more stable. Page 7

Weakening of Asian demand for African peeler logs
Prices for logs of okoume and ozigo from Gabon have been weak over recent weeks due to slowing demand for peeler logs in the Far East and the build-up of stocks during the recent dry season. Log production in Congo (Brazzaville) and Equatorial Guinea is increasing this year, partly compensating for a reduction in production and exports from the Cameroon. Prices for logs of iroko, doussie, and azobe remain firm. However prices for padouk and bubinga are weakening due to slowing demand in the Far East. Page 3

African sawn lumber market maintains fragile balance
Despite rising uncertainty, African tropical sawn lumber markets have so far maintained their fragile balance. Prices for most species and grades of the major commercially traded species remain stable. Although there was some increase in European buying activity after the summer vacation period, demand has remained constrained. Supplies are still restricted from the major producing regions north of the equator, with shipments coming through only slowly due to lingering rain and intensifying government controls on forest management. Pages 2-3

Malaysia looks for higher prices
Although there was a slight upturn in European forward demand for Malaysian sawn lumber during the summer, helped by strengthening in the euro-dollar exchange rate, demand weakened again in September. However shippers are pushing up forward prices in the face of restricted supplies and razor-thin margins. Page 5

Mahogany now available
The imposition of tight controls on logging has resulted in a major reduction in the number of operators dealing in Brazilian mahogany. The mahogany season started late this year, with little or no availability of air dried sawn lumber from Belem before August. However there are now good stocks of air dried mahogany on the ground, with much of the volume destined for shipment to the United States under large contracts signed earlier this year. Shipments continue to be delayed by problems over export quotas. Prices remain firm and stable. Page 5

Tropical plywood market weak
Markets for tropical hardwood plywood remain slow throughout Europe, North America and Asia. Prices for BB/CC grade Indonesian plywood remain weak at around the INDO96 less 26%. However Indonesian shippers are now seeking to push through price increases in response to concerns over log supply and weakening in the dollar exchange rate. Page 11

Governments make far reaching commitment to tackle illegal logging
A potentially critical meeting in the fight against illegal logging took place in Indonesia during September. Forest ministers from countries throughout East Asia, including leading wood producing and buying nations, agreed to work much more closely together to tackle forest crime. Even environmental groups were impressed by the level of commitment implied by the Ministerial Declaration. Page 15

Growing pressure for mutual recognition
The forest industry’s determination to ensure that forest certification does not limit choice in the market place is driving efforts to develop an international framework for mutual recognition of national forest certification schemes. These efforts may well lead to the evolution of two distinct global frameworks for forest certification that compete for market share. This could be an ideal outcome, serving both to maintain choice and to minimise confusion in relation to forest certification.
Editorial - Page 2,
Chain of custody - Page 13
International meeting on MR - Page 14
Mixed record of certification - Page 15




African sawn prices stable
Prices for most commercially significant species of African tropical logs and sawn lumber are holding reasonably steady. This is despite weakening demand in both Europe and the Far East due to the cooling economic climate. Demand for African logs from the Asian plywood industry is particularly weak. Inventories both in Africa and Europe are being kept at low levels and are more-or-less in balance with current weak demand. On the supply side, logging is Cameroon is well down on previous years due to tightening government restrictions, and this has ensured that domestic log prices have remained firm. Congo Brazzaville and the Central African Republic are exporting a steady flow of sapele logs, with smaller volumes of sipo and khaya, via the Cameroon port of Douala. Pages 2/3

UN propose Liberian log ban
An independent panel appointed by the UN recommended in October that the UN Security Council impose a ban on all round log exports from Liberia starting from July 2002 and “strongly encouraged local operators to diversify into wood processing before that date.” Liberia has been a significant source of logs for France and China over the last two years. Page 4

Malaysian lumber struggles
Forward buying of meranti in Europe has remained very cautious. Although major production curtailments have meant that meranti supplies in Malaysia are well down on previous years, some producers were offering meranti sales at discounted forward prices in early October in a desperate attempt to attract business and maintain cash flow. However, by the end of October, producers seemed more reluctant to offer discounted prices for most specifications as they anticipate future log shortages, particularly as the monsoon is just around the corner and Ramadan begins on 17 November. Sales of Malaysian white seraya to Japan are well down this year. Page 4

Indonesian log export ban
The Indonesian authorities have announced the reintroduction of a ban on log exports taking effect on 8 October 2001. The log ban is designed to help reduce the level of illegal logging in Indonesia, and to ease the severe log supply problems of Indonesia’s plywood industry. If the log ban is effective, it will have a significant impact on southsea log markets. Indonesia was the third largest supplier of tropical logs to China last year (after Malaysia and Gabon) supplying around 563,000 m3 – although log smuggling may mean that the actual volume was significantly higher. Pages 4/5

Problems for European hardwoods
Domestic and export demand for European hardwood sawing and veneer logs is well down this year. Demand for European hardwood sawn lumber has also weakened in several European countries since the middle of the year as the furniture and parquet flooring sectors have slowed. Stocks of finished products have been on the rise in both Germany and France. The European beech market continues to suffer from over-stocking. The appearance of a beech disease in Belgian forests has led to widespread sanitation fellings and raised fears that the market may continue to be over-supplied, particularly for lower grades. Due to weak demand for beech and more limited availability of good quality beech logs, many Western European mills are concentrating on cutting oak. This has occurred at a time when European oak demand has been weakening, leading to excess supply in some areas. Despite these problems, prices for high grade European hardwoods have remained reasonably stable. Pages 9/10/11

Some good news from the U.S.
Most press reports of the U.S. economy over recent months have highlighted the problems. But the news is not all bad. The U.S. housing sector continued to perform well during September, presumably boosted by low interest rates, and this has contributed to reasonable performance in the flooring and kitchen cabinet sectors. Throughout the hardwood lumber distribution chain in the U.S., there are reports that order files are not booked well forward, and that sales are frequently for prompt shipment. However, the general feeling is that while prices are competitive, hardwood lumber is still shifting. Page 3

Uncertain mood hits the American export trade
For now, the European trade in American hardwoods labors under a general feeling of economic uncertainty, brought on by continued economic weakness in Germany, the escalating war on terrorism and the downturn in the United States. Buyers throughout Europe remain reluctant to build inventory and purchasing tends to be on a “little and often” basis. However the recent strengthening of the euro against the dollar has tended to improve the competitive position of American hardwoods in Europe. In the Far East, medium-term prospects in China seem good, but demand in Japan and Taiwan remains weak Pages 2-3

Mahogany trade suspended
The mahogany sawn lumber market has was once again been plunged into uncertainty with the Brazilian government’s announcement on 22 October 2001 that it would suspend all transport and business in mahogany for an unspecified period of time. The move was a response to alleged illegal logging in indigenous areas. There are good stocks of mahogany on the ground at Belem only awaiting IBAMA clearance for shipment. While new shipments of Brazilian mahogany sawn lumber were arriving during October, overall supply is still restricted in the United States, now by far the dominant market. New tighter regulations have also meant that mahogany exports from Peru have been more restricted this year. Prices for mahogany remain firm. Page 5




Glimmers of hope in America
There are glimmers of hope for America’s economy. The index of leading economic indicators compiled by the Conference Board rose by 0.3% in October after two months of sharp declines. American consumers seem to be regaining confidence. And a significant factor for the wood sector is that the US construction sector remains reasonably stable. The U.S. market for hardwood lumber is very competitive, but the significant reduction in green and kiln dried production apparent since the summer seems now to have brought about a better balance between supply and demand for many items and prices have become more stable. Page 6

Sliding American exports
US lumber exports during the first nine months of 2001 were down 11.3% by volume year on year. The weak export performance apparent during the first two quarters of 2001 continued into the third quarter. But exports to some countries performed reasonably well. After a slow start to the year, US lumber exports to the UK and France picked up during the third quarter. There was also good growth in US lumber exports to China during this period. Page 6

Irish optimism
Delegates at AHEC’s European Convention in Dublin acknowledged that trade this year has weakened but many delegates were optimistic about the medium term outlook for American hardwoods, which remained competitive in Europe due to the wide range of species, grades and sizes available, their well established grading rules, and efficient shipment and delivery times. Pages 1/7/8

Oak on top
The first of the new season international furniture shows in Europe gave clear evidence that temperate hardwoods are preferred and that oak is back on top. Tropical hardwoods have all but disappeared with the exception of teak, which is now appearing in some exciting designs for interiors as well as garden and patio furniture. Page 11

Romanian beech doing well
Romanian beech lumber is selling reasonably well this year. However demand for French and German hardwood sawn lumber has been hit by slowing economic growth in central Europe. Pages 11 &12

Promotion of tropical hardwoods
ITTO agreed a new action plan for the next five years which includes funding for a major tropical hardwood promotional campaign. Pages 14 & 15

Japan’s hardwood log imports hit new lows…
Imports of southsea logs into Japan during September were the lowest for many years at only 112,000 m3. Page 4/5

…while China’s continue to rise
China’s imports of logs during the first nine months of 2001 reached 13.28 million m3, an increase of 22.4% on the same period last year, and were valued at US$ 1.37 billion, up 3.9%. Page 5

Meranti prices still on the rocks
Forward prices for meranti sawn lumber remain weak, a response to low levels of international demand. Some shippers have been pushing out relatively low offers in a bid to generate cash flow before the holiday season in the Far East. However, supply side trends suggest these lower prices may be short-lived. Page 4

Improved availability from Ghana and Ivory Coast
Prices for African sawn lumber remain reasonably stable despite slow international demand. Log supplies in Cameroon are limited as the rainy season is just coming to an end and due to tightening government controls. However log decks and lumber availability from Ghana and Ivory Coast have improved. Pages 2 & 3

Cameroon bans ayous log exports
Cameroon has added ayous and azobe to the list of species which may not be exported as logs. The ban will impact mainly on Italian manufacturers. Page 3

Mahogany problems linger on
In early December, the dry season in the Amazon region is coming to an end and tropical log extraction will be severely curtailed until March next year. Uncertainty surrounds the Brazilian mahogany trade, despite a recent court decision that IBAMA’s trade suspension was illegal. Meanwhile Peru’s exports of mahogany lumber have continued to slide this year. Pages 10 & 11

Growth in European furniture production slows
Western European furniture production rose 15% between 1997 and 2000. This year the rising trend is forecast to have continued, but at a slower rate. Hardwood lumber accounts for 18% of wood used in the European furniture sector. Chipboard comprises 59% and MDF 10%. These proportional figures have remained stable over the last decade as substitution trends are generally fairly limited. One exception is MDF which has made significant inroads into the sector. Pages 9 & 10

Rapid rise of parquet
Production of parquet flooring in Western European has been rising rapidly over the last 15 years, but continues to fall short of demand which has expanded at an even faster rate. However competition in the sector has been intensfying and a process of rationalisation is underway. Page 9

Light-colours predominant
A recent survey of European veneer producers suggests that light colours and grain are likely to dominate the European veneer sector next year. Several species are forecast to be in favour: European white beech; European ash; European birch; European oak; European Chestnut; American white oak; American walnut; American hard maple; European sycamore; African anigre; and American black cherry. Pages 1 & 3



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