Category: ITTO Market Reports

Total imports of real-wood flooring into the EU increased 6.2% to 29.52 million m² in 2018. Tropical countries accounted for only 9.2% of total imports in 2018, down from 11.1% the previous year and close to 50% before the financial crises. After nearly two decades of almost continuous decline, the real-wood flooring sector in the EU is now a negligible market for VPA partner timber products (Chart 1).

As the year has progressed, the European plywood sector has become increasingly depressed. That’s the consensus among a number of leading importers and distributors. 

The EU wood joinery sector continued to grow only very slowly in 2018, well below the pace of increase in the wider construction sector. While joinery production and consumption gained momentum in Germany, Austria, Spain, the Netherlands and Belgium last year, it remained subdued in Italy, the UK, France and Scandinavia. 

The uncertainty surrounding Brexit may be casting a shadow over the UK market. However, the wider EU hardwood sector reports generally steady, in some cases strong trading in 2019 to date including in tropical timber, despite some slowdown in economic activity and increased downside concerns about the medium-term outlook.

The value of EU wood furniture production was €41.4 billion in 2018, only 0.8% more than the previous year. This continues the trend of slow, but consistent, annual growth of around 1% in the last 5 years. Despite this growth, the total value of wood furniture production in the EU in 2018 was still 20% down, in real terms adjusted for inflation, compared to the years just prior to the financial crises in 2008. 

Although the EU Timber Regulation (EUTR) has narrowed the supply base for tropical timber imported into the EU, traders in Belgium and the Netherlands strongly support the FLEGT regulatory approach – combining licensing with EUTR – as a platform to help rebuild confidence in tropical timber in the EU market. 

Increasingly the twin concepts of “zero deforestation” and “embodied deforestation” lie at the heart of European policy making, both in the public and private sector, in relation to the trade in commodities from tropical countries. This has significant implications for the tropical wood products trade with potential impacts throughout the supply chain, from the forest through to the final consumer. 

The EU’s trade in tropical wood products was more buoyant in the first quarter this year compared to the same period in 2018. Total imports of all wood products (classified in HS Chapter 44) from tropical countries in the first quarter of 2019 were 525,000 MT, 9% more than the same period in 2018. Import value increased 17% to €561 million. 

ITTO’s analysis of Eurostat year-end data showed that the total value of tropical wood imports into the EU increased slightly in 2018, although at a slower rate than imports from non-tropical countries tropical wood continued to lose share last year (ITTO MIS Volume 23 Number 4 16-28 February 2019).

Analysis of the timber market in Germany, which plays central in the European wood products sector, highlights the extent to which tropical wood is losing market share, with important implications for the long-term future of tropical wood demand in the broader European market.