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Report from
Europe
Recovery in EU tropical wood imports
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.
Nevertheless, closer analysis of the data shows that the
volume of EU imports of tropical wood products were also
rising alongside the value of imports. It also shows that
while EU tropical timber imports continue to fall short of
historic levels, recovery in European trade in tropical
timber is becoming more resilient and now extends to a
wider range of products and market sectors.
The increase in the euro value of EU tropical wood
imports during the first quarter of this year follows a 3%
rise in the full year 2014. Consideration of monthly data
shows that most of this gain was generated towards end of
last year. In the final quarter of last year, EU imports of
tropical wood products were up by 10.6% at €469 million
(Chart 1).
Imports rise for most tropical wood products
A closer look at the value of EU imports of the various
tropical product types reveals that most showed significant
increases in the first quarter of 2015 compared to the same
period in 2014 (Chart 2).
Imports of sawnwood were €180 million in the first
quarter of 2015, 16% more than the same period in 2014.
Imports of mouldings (including both decking and interior
mouldings) increased 61% to €69 million.
Plywood imports were 29% greater at €55 million. Imports
of tropical joinery products (mostly LVL for window
frames) increased 26% to €60 million, while flooring
products increased 13% to €27 million.
Perhaps most surprisingly, tropical log imports jumped
25% to €18 million after plummeting for several years
almost without interruption. However imports of veneers
continued their downward slide, at €40 million in the first
quarter of 2015, down 5% compared to the same period in
2014.
Key tropical timber markets are bouncing back
There was significant growth in the euro value of tropical
timber imports in nearly all the main EU markets in the
first quarter of 2015 (Chart 3).
The UK once more outperformed its continental partners,
with imports of tropical timber products valued at €97
million in the first quarter of 2015, 34% more than the
same period in 2014. The UK therefore maintained its
position as the EU‟s largest importer of tropical timber
products during the period.
However, a particularly encouraging sign is that imports to
the traditional tropical timber markets in France, Belgium
and the Netherlands also increased sharply in the first
quarter of 2015.
Compared to the same period the previous year, first
quarter 2015 imports increased 32% to €91 million in
France and 27% to €83 million in Belgium.
Imports by the Netherlands, at €67 million, were up 16%
and deliveries to Spain were €22 million, 22% above the
very low recession level of the previous year.
Germany also imported more than the year before,
increasing 11% to €59 million, but import growth there
was less pronounced than in the other major markets.
It is too early to tell whether the sharp uphill trend in EU
tropical timber imports in the last six months is the
beginning of a lasting recovery or driven mainly by stock
replenishment and exchange-rate effects.
Purchases of tropical timber traded in US dollars have
become significantly more expensive for buyers in the
euro-zone since mid-2014 每 and particularly since the
beginning of this year.
This has had an impact on the import value, especially as
prices have remained fairly stable or were only revised
downwards a little in Indonesia, Malaysia and South
America.
The supply situation for tropical timber in Africa, which
was difficult throughout 2014, has also improved in the
last few months from European buyers‟ perspective.
Importers interviewed for this report note that China
continues to consume large quantities of African timber.
However demand in China has eased this year creating a
better balance between supply and demand for European
importers.
Positive signs on the consumption side in Europe are the
stable construction market in Germany and confidence that
the UK market will pick up again over the summer, after
weakening in the first quarter.
There are also signs of recovery in Spain, the Netherlands
and Poland. In France and Italy, the construction and
furniture industries continue to struggle, but there are
some signs of improvement in the wider economy.
The German Ifo Institut published an encouraging
economic climate report for the euro-zone at the beginning
of May. The Ifo Index for the economic climate in the
euro-zone in the second quarter of 2015 was 129.2 points,
up from 112.7 points in the first quarter.
The index is now at a level last seen before the global
financial crisis. And an expert survey conducted by Ifo
found that the euro-zone economy is expected to grow by
1.5 % this year.
10% growth in EU tropical sawn hardwood imports
The EU imported 257,000 m3 of tropical sawn hardwood
in the first three months of 2015, 10% more than the same
period in 2014.
The rise was broadly based being recorded across a wide
range of supply countries and EU Member States. It
benefitted suppliers irrespective of whether they typically
invoice in euros or dollars 每 hinting that this may be
driven more by improving EU consumption than by shortterm
stock replenishment.
In the first quarter of 2015, EU imports increased sharply
from the three most important supplier countries:
Cameroon (+10% to 75,000m3), Malaysia (+18% to
53,000m3) and Brazil (+31% to 34,000m3).
There were also significant increases in imports from
Ivory Coast (+11% to 21,000m3), the Republic of the
Congo (+4% to 14,000m3) and the Democratic Republic
of the Congo (+25% to 7,000m3).
There were increasing imports from two South American
countries that have not featured strongly in EU supplies in
recent years 每 Suriname and Guyana.
However imports from Gabon were down 14% at
23,000m3 and imports from Ghana fell 31% to just
6,000m3 (Chart 4).
On the recipients‟ side, Eurostat data indicates particularly
strong growth in imports of tropical sawn hardwood into
Belgium and the Netherlands in the first quarter of 2015
(Chart 5).
Imports into Belgium increased 23% to 72,000m3 during
this period, cementing the country‟s position as the leading
EU importer of this commodity. Imports into the
Netherlands, which started to recover last year, also
showed a continuing positive trend rising 12% to
51,000m3 in the first quarter of 2015.
The growth in imports into Belgium and the Netherlands
aligns with anecdotal reports indicating that larger
importers based close to the major European ports are
playing an increasingly important role to distribute tropical
hardwoods throughout the continent.
This is partly driven by the trend towards tighter stock
control and just-in-time trading in the European
manufacturing sector which has been a consistent feature
of the European trade now for at least a decade.
In the last two years, the EU Timber Regulation (EUTR)
appears to have added impetus to this trend as European
manufacturers and smaller distributors are now less
inclined to buy direct and increasingly rely on larger
importers to shoulder requirements for legality due
diligence.
There are expectations that arrival of the first FLEGT
Licensed timber, which is excluded from EUTR due
diligence obligations, on the EU market later this year or
early next year will ease this over-dependence on larger
operators.
The troubled French market has also picked up in 2015,
with imports rising 14% to 35,000m3 in the first quarter.
Deliveries to the UK, which were quite strong in 2015,
increased by a further 2% to 23,000m3 in the first quarter
of 2015.
Imports of tropical sawn hardwood into Spain, while still
quite low, continue to improve rising 40% to 14,000m3
during the same period.
In contrast, imports of tropical sawn hardwood by Italy (-
13% to 29,000m3) and Portugal (-16% to 6,000m3)
weakened significantly in the first quarter of 2015.
There was also a 15% fall in German imports of tropical
sawn hardwood to 14,000m3 in the first quarter of 2015.
German importers report that after a good start in January
demand slowed down again and remained at a
disappointing level through to April.
There was a slight improvement in May. Despite a strong
economic environment, importers report that tropical
timber sales in Germany are falling short of expectations.
This is attributed to an on-going and intensifying trend to
replace tropical timber with European species such as
larch, Douglas fir, and beech and, for certain applications,
with non-wood materials such as WPC, stone and
ceramics.
Turnaround in tropical log imports
After roughly ten years of almost uninterrupted decline,
there was a sharp 42% increase in EU tropical log imports
to 43,638m3 in the first quarter of 2015.
Much of this growth was due to a 129% increase in
imports from Cameroon to 9,832m3.
The scale of the increase is partly due to the particularly
low level of imports from Cameroon in the first quarter of
2014 when trade was seriously disrupted by logistical
problems at Douala port. Imports also increased by 9%
from the Republic of Congo to 8,820 cu.m and by 4% to
10,155 cu.m from the Democratic Republic of the Congo.
Most imports of logs from Cameroon and the Congo
countries in the first quarter of 2015 were destined for
France, Belgium and Portugal.
Besides the increases in deliveries from the large,
established suppliers, another trend is the sharp rise in
imports from new sources and from countries that only
delivered small volumes of logs to the EU in the recent
past.
EU imports from the Central African Republic, for
example, jumped 202% to 5,480 cu.m, mostly destined for
France and Belgium. Imports from Liberia, which went
mainly to Germany, reached 2,530 cu.m, after no imports
had been registered in the same period the year before.
The EU also imported 1,496 cu.m of tropical logs from
Suriname in the first quarter of 2015, up from negligible
levels last year.
Almost all of this volume was destined for the Netherlands
and is assumed to be primarily FSC certified timber for
water defence works. EU imports from Myanmar fell
sharply due to the country‟s log export ban that came into
effect as of April 2014 (Chart 6).
Sharp rise in imports of decking and mouldings
EU imports of ※continuously shaped§ wood (HS code
4409), which includes both decking products and interior
decorative products like moulded skirting and beading,
were 59,062 cu.m in the first quarter of 2015, up 34%
compared to the same period in 2014.
This increase was primarily attributable to much higher
deliveries from the two main suppliers, Indonesia and
Brazil (Chart 7).
Imports from Indonesia increased 34% to 24,274 m3.
Indonesia has profited from the better demand in the
Netherlands and Germany, traditionally major markets for
Indonesian decking.
Meanwhile EU imports from Brazil were up 38% at
21,879 m3, with a particularly significant increase in
imports by Belgium and France.
Imports of Brazilian decking were constrained last year
after a Greenpeace campaign raising concerns about the
legitimacy of documentation to demonstrate legal origin of
Brazilian tropical timbers.
This encouraged suspension of sales of Brazilian decking
products by several large European merchants and
blockage of shipments while Belgium‟s Environment
Ministry undertook EUTR-related investigations. These
subsequently confirmed the legality of the shipments
which were cleared for entry.
The trade data confirms that EU imports of Brazilian
decking products were flowing more freely during the first
quarter of 2015.
EU imports of tropical LVL scantlings show solid growth
Following on a 6% increase last year, EU imports of
tropical glued-laminated timber increased by a further
12% in the first quarter of 2015.
Most imports consist of LVL scantlings for the window
sector in Germany, the Netherlands and Belgium.
In 2014, Indonesia and Malaysia supplied similar volumes
to the EU market, with imports from Malaysia rising more
rapidly than imports from Indonesia.
However, Chart 8 shows that in the first three months of
this year, Indonesia boosted its deliveries by 45% to 6,010
cu.m while imports from Malaysia fell by 3% to 5,115
cu.m. Vietnam also gained in importance as a glulam
supplier in the first quarter of 2015, with imports rising
44% to 1,840 cu.m. Imports from Singapore, which were
close to 1000 cu.m in the first quarter of 2014, were near
zero in the same period of 2015.
Weak trend in tropical wood flooring imports
EU imports of tropical wood flooring fell by 6% to 1.161
million m2 in the first quarter of 2015. In 2014, imports
had stabilised with a small increase of 2%, after a very
weak year in 2013.
As a result, it looks as if the overall downhill trend for
tropical wooden flooring continues this year. Most of the
6% decline was due to the 25% drop to 163,000 sq.m in
deliveries from Brazil, the third most important supplier
(Chart 9).
Deliveries were relatively stable from the other main
supplier countries including Indonesia (+2% to 357,000
sq.m), Malaysia (+1% to 350,000 sq.m), and Vietnam (-
1% to 146,000 sq.m).
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