Category: ITTO Market Reports

In a recent blog post, the UK TTF Managing Director David Hopkin notes that “just when we thought it was safe to go back into work from COVID-19, the lurking beast of Brexit has reared its head once more”.

Expectations of the impact of the Covid-19 pandemic on the European plywood sector turned out generally to have been worse than the reality.

The value of UK imports of tropical wood products was US$360 million in the first four months of 2020, 19% less than the same period last year. Although a significant decline, the downturn is perhaps less than might have been expected given the exceptional circumstances surrounding COVID-19.

Having reached the highest level in more than a decade in October 2019, EU27+UK trade in tropical wood and wood furniture products slowed in the last two months of the year, a trend which accelerated in January and February this year. Contrary to expectations, with the large western European countries implementing COVID-19 lockdown measures during the month, EU imports of tropical wood products picked up again in March this year.

Feedback received by the EC on their “fitness check” of the FLEGT and EUTR regulations indicates a high degree of consensus amongst European organisations and interests on the broad aims and objectives of the policy and legislative instruments.

Timber trading activity across the EU continues at an extremely low level as countries emerge slowly and uncertainly from the coronavirus lockdown. Many companies have temporarily closed or curtailed operations, pushed back orders and have been asking for longer payment terms.

The COVID-19 situation in Europe is on a knife-edge. The numbers of new cases and deaths have stabilised and are beginning to decline in the worst affected countries, which include Italy, the UK and Spain. This has led to calls for the lockdown measures, which have been in place now throughout large parts of Europe for over six weeks, to be eased as the detrimental effects on economic activity, education, mental health and general well-being are becoming increasingly obvious.

It is ironic that in 2019, just before the market chaos created by COVID-19, the EU recorded its strongest year for wood furniture imports since 2007. That was, of course, when the last consumer boom was at its peak just prior to the market meltdown of the financial crises.

Economic forecasts issued only a few weeks ago in Europe, which projected continuing slow increase this year in GDP and business activity in sectors critical to the timber industry, such as construction and furniture, will need to be completely revised in the face of the Covid-19 outbreak. 

Despite a downturn in the last six months of 2019, EU imports of tropical wood products last year were greater than in 2018. In 2019, the EU28 imported 2.13 million tonnes of tropical wood products (including all those in HS Chapter 44 except fuelwood, wood waste and chips) with a total value of €2.32 billion, respectively 1.5% and 3.2% greater than the previous year. This was the second consecutive year of import growth after a dip in 2017.