Forest Industries Intelligence

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. 

The FLEGT Independent Market Monitor (IMM), hosted by ITTO and supported by EC funding, has reported some preliminary results of the 2018 survey of the European trade  (for more see www.flegtimm.eu). 

After a strong start to the year, the trade in wood furniture slowed sharply in the last quarter of 2018. EU imports of wood furniture from outside the region, which were up 6% in the first nine months of 2018, finished the year down around half a per-centage point compared to 2017 at €6.36 billion. This is a reversal of the slow recovery in EU imports that began in 2013. (Chart 1).

EU imports of tropical wood products rebounded in 2018 following a dip in 2017. The pace of tropical wood product imports increased in the second half of 2018 after a slow start to the year. In total, the EU imported 2.09 million metric tonnes (MT) of tropical products listed in HS Chapter 44 (excluding fuelwood, wood waste and chips) in 2018, 6% more than in 2017 (Chart 1). The total value of imports was €2.23 billion in 2018, 4.4% more than the previous year. 

The total value of EU imports of wood products was 19.44 billion euro in 2018, 5.1% more than in 2017. This followed an increase of 2.4% to 18.49 billion euro in 2017. In 2018 EU import value was at the highest level since 2008 just before the global financial crises (Chart 1).

It’s been a roller coaster 12 months for the European plywood industry according to stockholder importers and distributors in the region.  

There are signs that the upturn in the eurozone economy in the last 2 years will be short-lived and growth is stagnating again. Meanwhile, the trade war between USA and China has stirred fears of a new global recession and EU countries are anxiously awaiting the outcome of Brexit negotiations with the UK. None of which is good for market stability. 

The latest Eurostat trade data for EU wood furniture trade indicates that the trends reported by ITTO MIS in September 2018 (Volume 22, Number 18) have continued; internal EU trade is rising, whereas external trade is broadly flat, both on the import and export side (Chart 1)

The consensus amongst hardwood importers interviewed during December is that the current state of trade across the EU is satisfactory and there is cautious optimism it will remain that way into 2019. However various issues are causing concern.

EU imports of tropical wood products dipped sharply in 2017 and started this year very slowly but recovered some lost ground in the second and third quarters.