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Report from
Europe
EU internal wood furniture trade rises but external
trade is flat
The latest Eurostat trade data for EU wood furniture trade
indicates that the trends as 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).
Internal EU trade in wood furniture, which increased 4%
to €19.3 billion in 2017, increased a further 6% in the first
nine months of 2018. The rise in internal EU trade is
driven mainly by exports from Poland, particularly to
Germany, and from the Netherlands to several
neighbouring countries including Germany, France and
Belgium.
Wood furniture production is rising in Poland, while more
imports into the EU from outside the region are now being
funnelled via the Netherlands.
Meanwhile the pace of EU wood furniture exports to non-
EU countries, which were flat at €8.7 billion in 2016 and
2017, continued at the same rate in the first nine months of
2018. EU exports to the USA, China and Russia have
increased slightly this year but these gains have been
offset by declining exports to Switzerland, Norway,
Canada and UAE.
Wood furniture imports into the EU from outside the
region increased 9% to €6.3 billion in 2017. Import value
in the first nine months of 2018 was €4.7 billion, 1.6% less
than the same period in 2017. After a strong start last year,
imports slowed a little from May 2018 onwards.
Fall in EU wood furniture imports from China and the
tropics in 2018
After making gains in 2017, EU wood furniture imports
from China, by far the largest external supplier, fell 5% to
€2.55 billion in the first 10 months of 2018.
During the same period, EU imports of wood furniture
continued to rise from other temperate countries, mainly
those bordering the EU. EU imports from these countries
increased 11% to €1.25 billion in the first 10 months of
2018, building on a 28% gain recorded the previous year.
The biggest gains in 2018 were made by Ukraine, Belarus,
Russia, USA, Bosnia, and Turkey.
After a slow start to the year, EU imports of wood
furniture from tropical countries picked up pace in the
second half of 2018, and totalled €1.49 billion between
January and October 2018, slightly exceeding the 2017
level (Chart 2).
In recent years China¡¯s competitiveness in the EU wood
furniture market has been impeded as prices have risen on
the back of growing Chinese domestic demand and new
laws for pollution control pollution in China.
EU furniture importers also continue to question the
variable quality of product imported from China and some
have struggled to obtain the legality assurances required
for EUTR conformance when dealing with complex wood
supply chains in China.
The main South East Asian supply countries have all
followed a similar trajectory in the EU wood furniture
market in the last two years. A rise in EU imports in 2017
was followed by a decline in 2018.
After increasing 1% to €730 million in 2017, EU imports
from Viet Nam fell 3% to €599 million in the first ten
months of 2018. Imports from Indonesia increased 4% to
€311 million in 2017 but fell back 4% to €257 million in
the first ten months of 2018. Imports from Malaysia
increased 10% to €203 million in 2017 and were 4% down
at €163 million in the first ten months of 2018.
In contrast, EU wood furniture imports from India have
continued to rise, up 15% to €199 million in the first ten
months of 2018 after a 12% increase to €202 million for
the whole of 2017. Imports from Brazil were €57 million
in the first ten months of 2018, matching the 2017 level
(Chart 3).
There were also shifts in the destinations for wood
furniture imported into the EU from tropical countries in
the first ten months of 2018. Imports in the UK, the largest
market, were €577 million between January and October
2018, 1% more than the same period in 2017. There were
also rising imports in France (+8% to €219 million) and
Netherlands (+6% to €163 million).
However, in the first ten months of 2018 these gains were
offset by falling imports of tropical wood furniture in
Germany (-9% to €182 million), Belgium (-3% to €61
million), Spain (-7% to €57 million), and Italy (-2% to €44
million) (Chart 4).
IMM report examines impact of FLEGT licensing in
furniture sector
With further support, development and communication of
FLEGT and FLEGT licensing can play a role to underpin
tropical timber product market share in the highly
competitive European furniture sector.
This is according to the latest survey by the Independent
Market Monitor (IMM), an ITTO project funded by the
EU (see www.flegtimm.eu).
The core aim of the IMM scoping study of procurement in
the EU furniture industry is to gauge the sector¡¯s
perceptions of the value, impacts and process of sourcing
products from supplier countries engaged in the FLEGT
VPA process.
The latest report is based on individual country surveys
undertaken by the IMM¡¯s network of correspondents in
seven lead importing countries. These were the
Netherlands, UK, Germany, France, Italy, Spain and
Belgium, which between them account for 83% of all
furniture imported into the EU from VPA partner
countries.
The key rationale of the survey is that assembled wood
furniture consistently comprises 40% of the value of EU
timber and wood products sourced from FLEGT VPA
partner countries. So, canvassing furniture sector opinions
of the VPA initiative and FLEGT licensing offers valuable
lessons for the development of EU market awareness and
penetration of VPA-sourced and licensed.
¡°[The aim is] to provide a preliminary assessment of the
current and potential role of FLEGT licensing to improve
market access for wood furniture from VPA countries in
the EU, and to recommend a strategy to optimise the
benefits of FLEGT licensing [in this respect],¡± states the
report.
The study was also designed to provide a comprehensive
baseline of perceptions and impacts of the FLEGT VPA
initiative in the wood furniture sector in order to generate
recommendations for IMM¡¯s long term monitoring of the
industry.
The report recognises that VPA country furniture and
furniture product suppliers face a ¡®crowded and fiercely
competitive market¡¯ in the €36 billion EU furniture arena.
The EU furniture industry comprises an estimated 130,000
companies. 87% of wood furniture sold in the EU market
is also made in Europe.
The basis of the survey comprised semi-structured
interviews with 47 European companies, representing the
spectrum of business type, from very large furniture
retailers, to medium-sized manufacturers and distributors.
Between them these imported indoor and outdoor
furniture, plus wood furniture components and raw
materials. They had sourced from a combined total of nine
of the 15 VPA-engaged countries and altogether dealt with
over 850 individual foreign suppliers.
The companies were asked about their perceptions of
quality, price, lead times from order to delivery, logistics
(the ease of moving products) and the range of products
available from various countries and regions.
When asked to compare these variables on a country-bycountry
basis, it was clear that both western and eastern
European EU countries were perceived as most
competitive across the range of factors considered. The
third-most competitive region identified was that of non-
EU countries in Eastern Europe. Viet Nam, Indonesia and
China were perceived to be the next-most competitive.
The survey included questions on purchasing policies.
Around one-quarter (11 of 47) of the companies
interviewed did not have written environmental
purchasing policies.
For those that did have policies, the dominant feature was
a requirement for ¡°legality¡± or legal compliance regarding
wood origin or trading (20 companies); the remainder (16
companies) were pro-certification, with a preference for
the Programme for the Endorsement of Forest
Certification and/or the Forest Stewardship Council.
Products licensed under the EU FLEGT initiative were
valued by 45% of those interviewed (typically those
sourcing from Indonesia). An additional 19% of those
interviewed stated that FLEGT licensing could play a role
in their purchasing decisions if it were available in other
countries.
Overall, the companies interviewed were positive towards
the FLEGT process, although the lack of availability of
licensed products from countries other than Indonesia was
a common concern. Some respondents expressed doubt
that the FLEGT process had led to on-the-ground
improvements in forest governance.
The chief benefit identified for those favourably disposed
towards FLEGT licensing centred on the linkage with the
EU Timber Regulation and the simplified due-diligence
process.
Outlook for tropical timber in the European furniture
trade
The study asked interviewees for their views on the
outlook for tropical timber in the European furniture trade.
Forty-three percent considered that the market for tropical
wood furniture would grow or stabilise in the next decade
and 32% thought demand and volume would shrink (25%
expressed no opinion).
The wide range of alternative materials and consumer and
specifier attitudes towards tropical timber were seen as the
main negative drivers.
Fashion largely drives the style and design of wood
furniture, with end consumers destined to buy 80% of
production. A complex web of interconnected drivers
determines the choice of wood and accompanying colours
and features. Consumers, retailers and manufacturers have
a huge range of options for materials and the choice of
wood in furniture per se is no longer guaranteed.
The report concludes that ¡®licensed timber alone will not
reverse the trends that are [negatively] impacting on
tropical wood in Europe¡¯. However, it does have value
and a role to play here, ¡®as a tool to be utilised to form
part of the process of building confidence in tropical
timber in a wider [strategy] that might help maintain
market share¡¯.
This strategy, the report notes, would also require a wider
range of players¡¯ involvement, including ¡®major retailers,
trade associations, national governments, NGOs,
architects, and other opinion formers¡¯.
Wood furniture market perceptions of FLEGT licensing,
the report concludes, are that it ¡°lacks the glamour of third
party SFM certification where sustainability is the main
focus¡± which currently limits its consumer-facing role. At
the same time, the report suggests FLEGT licensing can
offer ¡°assurance to business-to-business buyers operating
at the base level of responsible purchasing¡±.
Report recommendations
 Minimise the bureaucracy involved in the
process
of importing FLEGT-licensed timber to maximise
the business benefits for operators.
 Encourage those companies not yet using
FLEGT-licensed timber to do so.
 Demonstrate the benefits of the
FLEGT-licensing
scheme in Indonesia to build trust.
 Clarify within the trade the impacts and
achievements of FLEGT-licensed timber and
timber legality assurance schemes.
 Speed up the introduction of
FLEGT-licensed
timber supplies from other VPA countries
For more details, including full report download:
http://www.flegtimm.eu/index.php/reports/76-imm-eu-furnituresector-
scoping-study-flegt-can-impact-european-furnituremarket-
2
ETTF Secretariat shifts from Netherlands to Germany
The secretariat of the European Timber Trade Federation
(ETTF) is moving from the Netherlands to Berlin. The
move follows the announcement that Andr¨¦ de Boer is
stepping down as ETTF Secretary General in 2019,
handing over the reins to Thomas Goebel, Chief Executive
of German Timber Trade Federation GD Holz.
The first quarter of 2019 will see a transition process, with
Mr Goebel officially taking on the role by April 1,
combining it with his position at GD Holz.
Mr de Boer, who is a commercial lawyer by profession, is
a regular ITTC delegate and member of ITTO¡¯s Trade
Advisory Group, and has often chaired the ITTO Market
Discussion. He took over at the helm at the ETTF ten
years ago after its formation from an amalgamation of
European timber trade bodies prior to that he was
Managing Director of the Netherlands Timber Trade
Federation (VVNH) for 20 years. His time at the ETTF, he
said, has been both challenging and exciting.
¡°The European timber importing sector in this period has
had to adapt to major changes; concentration of the
industry and a decline in tropical timber trade, as well as
the implementation of the EU Timber Regulation,¡± he
said. ¡°But the trade has evolved and moved with the times,
and at the same time the ETTF has gained relevance
throughout the international market as advocate of a legal
and sustainable, but also a commercially significant and
dynamic industry.
¡°We are now an integral part of the conversation on
climate change and the development of a low carbon
bioeconomy. There¡¯s also recognition at government level
that a commercially viable forestry and timber industry is
integral to maintenance of the forest resource; it¡¯s widely
accepted that it¡¯s a case of use it or lose it.¡±
Mr. de Boer said now was the time to hand over to a new
team to take the organisation forward and exploit the
opportunities to grow the European timber market.
Mr. Goebel said he looked forward to his new role. ¡°The
ETTF has equipped itself well to master the challenges
and realize the opportunities to come for the timber trade
and is well placed to further strengthen representation of
its members interests,¡± he said.
In another strategic move for the future of the ETTF, its
annual general meeting in 2018 decided that it should join
the European Confederation of Woodworking Industries,
Brussels-based CEI-Bois, where a key focus will be
helping develop a new timber trade segment.
¡°CEI Bois, with its close connection to the EU in
Brussels, will further serve the interests of the trade
through this separate trade pillar, in which the ETTF will
play a leading role,¡± said Mr. Goebel. ¡°It¡¯s decisive that
we develop this facility.¡±
At present the ETTF has 18 member associations in 16
countries.
ISO publishes chain of custody standard for wood
products
ISO (the International Organization for Standardization)
has published a new, voluntary standard for chain of
custody (CoC) of wood and wood-based products
(together with cork and lignified materials other than
wood, such as bamboo, and their products).
While the standard does not cover forest management, it
can be used to transfer information about the source of the
wood-based product.
According to ISO, the standard is intended to enable
tracking of material from different categories of source to
finished products and has several purposes. It can facilitate
business-to-business communications by providing a
common framework that allows businesses to ¡°speak the
same language¡± when describing their chain of custody
system.
Purchasers can use the standard document to evaluate the
information they receive from suppliers to help identify
suitable input material.
This information can then be used together with a set of
specified criteria to determine whether a product/input
material fulfils the conditions for the intended use.
Other standards and certification schemes can use the
standard as a reference regarding chain of custody
systems.
More details see:
https://www.iso.org/obp/ui/#iso:std:iso:38200:ed-1:v1:en
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