Month: October 2009

Ed Pepke of the UNECE Timber Committee, delivering the opening address at the American Hardwood Export Council (AHEC) biannual European Convention in Athens on 22 October, described the current downturn as “the worst since the second world war”. Pepke went on to suggest that the world only avoided “a second great depression” as a result of the unprecedented concerted global policy response – including swift measures to stabilise the banking sector in several countries and various government stimulus measures which have pumped huge sums of money into the global economy. Pepke noted that while most countries across the globe will record negative GDP growth this year, economists believe the numbers will turn positive next year. Nevertheless Pepke suggested that “this recovery will be very slow.”

Trade contacts report continuing low levels of tropical hardwood forward buying in the EU at the end of the third quarter of 2009. Earlier predictions of significant price rises in the face of widespread shortages after a long period of slow buying have yet to be realised. CIF Europe price trends for tropical hardwood logs and sawn lumber seem now to be trending upwards, but at present this seems more due to increases in freight rate and exchange rate fluctuations than to any sharp shift in the balance of supply and demand. There is some evidence of gaps opening up in stocks of certain special assortments, but generally there still seems to be enough material on the ground in Europe to satisfy current low levels of consumption. There continues to be a lot of cross-trading between European companies to fill gaps in stocks as they arise, with little interest in speculative forward purchases. This applies both to products destined for the joinery sector and for the garden decking sector. The 2009 season for decking products in Europe is now over and considerable uncertainty over prospects for the 2010 season has led to considerable reluctance on the part of importers to build stocks.