Tag: Market Report

After a sharp fall in UK imports of tropical timber products in May and June in response to the COVID-19 pandemic, imports rebounded strongly in July and made more gains in August. However, even in August, total imports were still down around 15% compared to the same month the previous year (Chart 1).

The downturn in EU imports of tropical wood and wood furniture products during the initial period of the COVID-19 pandemic may be less severe than first forecast. As expected, EU27 (i.e. excluding the UK) tropical wood and wood furniture product imports fell sharply in May in response to supply side problems and the lockdown measures in most of the main EU markets, losing around one third of value against the five-year average for the month.

Newly released Eurostat data indicates that the value of EU27+UK wood furniture production was €42.5 billion in 2019, 1.4% less than the previous year. In retrospect, it looks as if the rebound in EU wood furniture production following the 2008 economic crises peaked as early as 2017, as 2019 was the second straight year of decline and the COVID-19 pandemic has damaged market prospects in 2020. Last year, EU wood furniture production was still 20% down, in real terms adjusted for inflation, compared to the years just prior to the 2008 crises.

As expected, following the UK lockdown in response to COVID-19 introduced on 24^th March and allowing for the long lead time in the tropical trade, there was a very sharp decline in UK imports of tropical timber products in May. The total value of UK imports of all tropical wood (HS 44) and wood furniture (HS 94) products during the month was just over US$50 million, only half the value typical in what is usually one the busiest months of the year for the UK trade (Chart 1).

EU27 (i.e. excluding the UK) tropical timber product imports continued to defy expectations of COVID-19 driven collapse in the four months to April this year. Despite all the large western European countries implementing COVID-19 lockdown measures starting in the second two weeks of March, and mounting supply-side problems in tropical countries, total imports of tropical wood and wood furniture products into in the EU in April were little changed compared to the previous month.

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.