Forest Industries Intelligence

The EU imported tropical wood products worth €517 million in the first three months of this year, a healthy increase of 20.9% compared to the same period in 2014. To some extent the strong growth figures for the first quarter of 2015 are due to particularly weak imports in the same period the previous year.  The increase in the euro value of imports also needs to be seen against the background of the very weak euro on currency exchange markets. The euro was at its lowest level ever against the US dollar in the first quarter of 2015 and around 30% down compared to the same period the previous year.

EU28 imports of plywood increased 12% to 3.7 million m3 in 2014, the highest level since before the financial crises. Import value also increased 12% to €1.35 billion. The rise was driven mainly by improved consumption in several European markets, notably the UK. Another key factor was an increase in supply of Russian birch plywood combined with a sharp decrease in the value of the Russian rouble on foreign exchange markets which increased competitiveness of imported Russian product relative to domestic production. Another notable feature of the European plywood market in 2014 were signs that rising concern for the environmental and technical performance of plywood is having a more a significant impact on trade.

The first quarter of 2015 has been a busy time for EU policy initiatives linked to tropical forest and market development programs for tropical timber. There seems now not only to be a new urgency surrounding these initiatives but also a growing pragmatism with potentially positive implications for the tropical timber industry.

Imports of wood flooring into the European Union increased 4.9% to 29.7 million m2 last year, after declining steadily between 2010 and 2013. In 2014, wood-flooring deliveries from China, the single largest supplier, increased by 4.9% to 18.6 million m2. China accounted for 63% of total EU imports in 2014, exactly the same proportion as the previous year (Chart 1).

The EU imported tropical wood products worth €1.81bn in 2014, which represents a 3% increase over the ten-year low of €1.76bn registered in 2013. Between 2012 and 2013 imports had dropped sharply by 13.2 % and fell below the €2bn threshold for the first time. Even with the slight recovery, the EU’s 2014 tropical wood imports did not even reach half of what they were less than ten years ago (Chart 1).

The sharp rise in the EU trade surplus in wood furniture between 2010 and 2013 came to a halt last year as the pace of increase in EU exports slowed while there was an upturn in imports (Chart 1). EU28 wood furniture exports were valued at €8.43 billion in 2014, 2.3% more than in 2013. EU28 imports of wood furniture were valued at €5.11 billion in 2014, 10.4% greater than the previous year.

A single word describes the current state of the joinery sector in Europe. That word is “flat”. It’s also a reasonable description of the state of the European economy as a whole. There are a few bright spots – notably the UK – but not enough to offset slow demand elsewhere. 

The latest Eurostat trade data to end October 2014 shows that tropical hardwood imports into the EU last year were only marginally better than the historically low levels recorded in the previous two years. Various factors account for this lack of import growth including lacklustre performance of the construction and joinery sectors in much of Europe during 2014, supply constraints and logistical problems (particularly for shipments out of Douala port in Cameroon), and the EU Timber Regulation which has encouraged buyers to focus on a more limited range of tropical suppliers to meet legality due diligence requirements.  

After a period of turbulence during the years of the EU recession, the EU plywood market has stabilised and shown signs of recovery in the last 18 months. Supply and prices have also become more consistent and the industry appears to have adjusted well to the new demands of the EUTR.