Forest Industries Intelligence

Unlike the ATIBT Forum in 2014 which was wide ranging and covered tropical timber trade trends globally, this year’s meeting focused more on linkages between African producers and European buyers. Around 150 participants attended the meeting in Milan on 14-15 October drawn mainly from African governments and trade associations, European-owned tropical timber operators in Africa, and European importing companies, trade associations and other policy makers.

The International Hardwood Conference (IHC) held in Copenhagen from 16-18 September identified access to raw materials, changes in global trade flow patterns and growing purchasing competition with buyers from other parts of the world as well as innovation in non-wood materials as key challenges currently facing the European hardwood industry.

The rising trend in EU tropical wood product imports that began in September 2014 continued into the second quarter of 2015. EU imports of tropical wood products in May 2015 hit €186 million, the highest monthly figure since June 2012 (Chart 1). Overall in the first 6 months of 2015, the EU imported €1.07 billion of tropical wood products, an increase of 19% compared to the same period the previous year.

EU imports of hardwood plywood were 103.1 million m3 in the first five months of this year, 3.3% more than in the same period of 2014. However, import growth has slowed in 2015 compared to the 11.1% increase registered for 2014 as a whole, (Chart 1).

The Spanish timber trade suffered dramatically from the economic crisis and especially from the contraction by 70-80% in the building sector. However the Spanish economy and the local wood industry are slowly beginning to recover. The industry has also changed dramatically since the crisis and is now exploiting new market segments. This is according to an interview with Alberto Romero, General Secretary of the Spanish importers’ federation AEIM, for the European Timber Trade Federation (ETTF) newsletter.

The Euroconstruct research agency reports that the European construction industry is growing slowly after several years of declining or low activity. In its latest half-yearly report issued in June, Euroconstruct revised it forecasts for 2015 and 2016 upwards and also revealed positive expectations for 2017.

European importers are reporting satisfactory overall demand for tropical timber in the first six months of this year: the majority of sources said business was stable or slightly better than last year. However, they also noted that the market had shown sharp fluctuations in the last few months, with periods of strong demand frequently being followed by several rather subdued weeks.

World production of furniture has grown constantly over the last five years. The CSIL Word Furniture Outlook currently estimates its worth at about US$480 billion, up from US$437 billion in 2013. Production in Europe and North America stagnated between 2009 and 2014. High-income countries accounted for 39% of production in 2014 and middle and low-income countries for 61%. The share of middle and low-income countries in world production first exceeded 50% in 2010 and has risen steadily since.

EU imports of tropical hardwood veneer were 63,550 m3 in the first quarter of 2015, 6% down on the same period in 2014. Imports from Gabon, the largest supplier, were 10% up at 34,744 m3. This gain failed to offset falling imports from Côte d’Ivoire (-20% to 15,189 m3), Cameroon (-16% to 4,085 m3), and the Republic of Congo (-42% to 2938 m3) (Chart 1).

The European construction and joinery sectors continue to recover slowly. The rate of recovery in the UK, which was rapid in 2014, weakened again in the first quarter of 2015. However there is confidence that the UK market will pick up again over the summer months. The large German market remains stable with good consumption. There is improving activity in the Netherlands, Poland, Spain and Belgium. The Italian and French construction markets are still weak and declining but there are signs of improving economic conditions in both countries. Imports of finished joinery products from outside the EU increased slightly in 2014, but the weak euro is acting as a drag on imports in 2015.