Record Low EU27 Tropical Timber Imports in 2020. ITTO European Market Report 30th April 2021

Total EU27 (i.e. excluding the UK) import value of tropical timber and wood furniture products was US$2.99 billion in 2020, 9% less than the previous year. This is a significantly higher level of import than forecast when the first waves of the COVID-19 pandemic hit the continent early in 2020. It was, however, the lowest level in recent decades and represented a further decline in a market that has been severely restricted ever since the financial crises (Chart 1).

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Proposals for FLEGT and EUTR to Be Merged With EU “deforestation-free” Regulations. ITTO European Market Report 15th April 2021

The EU is considering the introduction of new forest and climate policy measures which would reshape timber trade relations with tropical countries. In some ways, the proposed measures build on the existing policy framework contained in the FLEGT Action Plan. However, they also raise questions about the future of existing instruments such as the EU Timber Regulation (EUTR) and FLEGT licensing systems.

The potential far-reaching implications of the ongoing policy discussions were highlighted in a presentation by Hugo Schally of the European Commission’s Environmental Directorate (EC DG ENV) to a webinar hosted by FERN, the Brussels based environmental NGO, on 17 March 2021 which brought together a range of policymakers and civil society stakeholders for presentations and discussions on the theme “Enforcing Due Diligence regulation for forest risk commodities”[1].

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Plywood Margins Are Good but Supply a Struggle. ITTO European Market Report 31st March 2021

The good news from the majority of European hardwood plywood importers interviewed in March 2021 was that they were making money. They reported demand ranging from firm to booming across the market, from the construction and DIY sector to merchants and furniture makers. Moreover, customers were willing to pay a healthy price.

“If you can’t make a good margin in the current climate, you never will,” said one importer.

Another reported their customers ‘accepting the real value’ of plywood and timber generally. “Traditionally most view plywood as a stack it high, sell it cheap commodity, but the market situation is such now that they’re having to pay more like its true worth” they said. “There’s strong demand and less opportunity to play suppliers off against each other. We’re experiencing less negotiating from customers and less bad debt. It’s definitely a seller’s market.”

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Sharp Fall in UK Tropical Wood Imports in 2020 Likely to Be Short-Lived. ITTO European Market Report 15th March 2021

Total UK tropical wood and wood furniture imports in 2020 were USD981 million, 23% less than the previous year (Chart 1a). It is no surprise that imports fell so precipitously, the UK being amongst the world’s worst affected countries by the COVID-19 pandemic last year at a time when there was already uncertainty due to the country’s departure from the EU. However, UK imports from tropical countries did suffer a larger decline in the UK market than products from other regions, largely due to supply side problems, particularly lack of and rising costs of freight space from South East Asia during the year. But underlying demand is strong in the UK and new opportunities may well open up for tropical suppliers in the UK over the long term.

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Sharp Fall in Tropical Share of European Wood Products Market During Pandemic. ITTO European Market Report 28th February 2021

Despite upheaval in the EU27+UK wood market and wider economy in 2020 due to the COVID-19 pandemic, the total dollar value of EU27+UK imports of wood (HS44) and wood furniture (HS94) products fell only 4% to US$21.86 billion euro in 2020. In dollar terms, EU27+UK imports in 2020 were higher than during the 2015-2017 period and not significantly out of alignment with the trend of the previous 10 years (Chart 1).

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Unexpected Rise in EU27 Tropical Timber Imports in November. ITTO European Market Report 15th February 2021

Total EU27 (i.e. excluding the UK) import value of tropical wood and wood furniture products was US$2.75 billion between January and November last year, 10% less than the same period in 2019. This is a significantly higher level of import than forecast earlier in the year when the first waves of the COVID-19 pandemic hit the continent. Total import value in November was US$263 million, a 4% gain on the previous month and 6% more than the same month in 2019 (Chart 1). 

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Rebound in UK Tropical Wood Imports Slows in Closing Months of 2020. ITTO European Market Report 31st January 2021

The rebound in UK imports of tropical wood products as the first wave of the pandemic receded in summer last year slowed in the last quarter of 2020 as the country, like much of the rest of the Europe, reimposed lockdown measures in response to the second larger wave which hit at the start of the winter months. In addition to a slowdown in overall UK business activity at the end of 2020, there are also reports of severe supply problems in the UK building sector, including for products imported from South East Asia and China, due to limited container space and rising freight costs.   

Total value of UK imports of tropical wood and wood furniture months increased only slightly from US$98 million in October to US$100 million in November, but then receded again to US$95 million in November (Chart 1). Total UK tropical wood and wood furniture imports in the 11 months to November 2020 were US$892 million, 23% less than the same period in 2019.

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EU27 Tropical Timber Trade Faces Double Dip Recession. ITTO European Market Report 15th January 2021

Tropical timber logs.

Total EU27 (i.e. excluding the UK) import value of tropical wood and wood furniture products was US$2.48 billion between January and October last year, 12% less than in 2019. This is a significantly higher level of import than forecast earlier in the year when the first waves of the COVID-19 pandemic hit the continent leading to widespread lockdowns with severe implications for the EU27 economy and on the supply side in tropical countries.

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