Category: ITTO Market Reports

The EU’s Sustainable Tropical Timber Coalition (STTC) held its annual conference in Paris on 26 September. The conference highlighted the ongoing work to promote tropical timber in Europe by STTC participants and raised questions about the role of targets for procurement of “certified sustainable” that are central to STTC activities.

The UNECE Committee on Forests and the Forest Industry (COFFI) released their Annual Market Review 2017-2018, together with several market statements by national governments in the UNECE region (which includes the subregions of Europe, North America and the CIS), in advance of their 76th session to be held in Vancouver on 5-9 November (see http://www.unece.org/index.php?id=47708 for details).

The latest Eurostat trade data shows that the EU’s wood furniture industry, having lost a little ground to imports in 2017, is struggling to increase sales outside the EU as the global trade slows. However, the sector is once again reinforcing its dominance in the home market this year.

EU imports of tropical sawnwood in the first six months of 2017 were 348,600 metric tonnes (MT), 19% less than the same period in 2016. The decline was particularly pronounced for trade between Cameroon and Belgium, following a surge last year, but also affected nearly all exporting countries and EU member states. The only minor exception was a slight upturn in imports from Angola, mainly destined for Portugal.

Tropical hardwood’s long-held status as the prime material for European fresh and seawater marine applications has been increasingly challenged by alternatives; steel, concrete, recycled plastics, wood-plastic composites, temperate timber species and increasingly, for sea defences, rock armour.

A major structural change is underway in the African timber industry as operations are reoriented away from the European market towards Asian markets. This change is driven by factors both on the supply-side, particularly declining availability of timber species of interest to the European market; and on the demand-side as consumption is weakening in Europe at a time when demand in Asia is rising rapidly.

Latest reports on European economic and construction sector health and outlook make for almost exclusively positive reading.  After the EU economy enjoyed its strongest growth in gross domestic product in a decade in 2017, the overviews and forecasts for the first part of 2018 state that not only has expansion continued to date, it is set to persist through the rest of the year and into 2019.

There was only very slow growth in both the EU wood furniture and joinery sectors during 2017.  While production and consumption gained momentum in parts of continental Europe, particularly in Eastern Europe, this was offset by a significant slowdown in the UK and stasis in Germany.

Drawing on interviews with timber trade associations across the region, the latest newsletter of the European Timber Trade Federation (soon to be published at http://www.ettf.info/ettf_news) shows that the European timber market continues to grow slowly and broadly in line with GDP forecasts of 2.4% in 2018 and 2.3% and 2% in 2019. It also highlights that trade growth is becoming more widespread and resilient in southern European countries, including in Italy, Spain and Greece.

The European plywood market faces a combination of buoyant demand, mounting competition for product from other leading consumer countries, plus persistent supply delays and constraints among key producers, notably  tropical suppliers.