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Report from
Europe
Pace of growth in EU tropical timber imports slows in
the third quarter
The EU¡¯s trade in tropical wood products was more
buoyant in the first nine of months of 2019 than the same
period in 2018. However, the rise in imports, which began
in the second quarter of 2018, has levelled off since June
this year.
Chart 1 shows twelve monthly rolling total imports (to
iron out seasonal fluctuations) into the EU of all tropical
wood products listed in HS Chapter 44 (excluding
fuelwood, wood waste and chips). It shows that the 12-
month rolling total dipped to 1.95 million metric tonnes
(MT) in March 2018, then increased to a peak of 2.21
million MT in June 2019 before slipping back slightly to
2.19 million MT in September 2019.
The slowing pace of growth in European tropical wood
imports coincides with mounting signs of weakness in the
wider economy. In its new Regional Economic Outlook
for Europe, issued on 6th November, the IMF points out
that growth has slowed this year. Although that¡¯s mainly
due to weaker global trade (thanks to the US-China
tariffs), and a slowdown in manufacturing this year, there
are signs that the weakness is spreading.
According to the IMF, ¡°for most of the region, the
slowdown remains externally driven. However, some
signs of softer domestic demand have started to appear,
especially in investment. Services and domestic
consumption have been buoyant so far, but their resilience
is tightly linked to labor market conditions, which, despite
some easing, remain robust. Expansionary fiscal policy in
many countries and looser financial conditions have also
supported domestic demand¡±.
IMF forecasts that Europe¡¯s growth will decline from
2.3% in 2018 to 1.4% in 2019. A modest and precarious
recovery is forecast for 2020, with growth reaching 1.8%,
as global trade is expected to pick up and some economies
recover from past stresses.
IMF notes that this projection masks significant
differences between ¡°advanced¡± (i.e. mainly Western) and
¡°emerging¡± (mainly Eastern) Europe and that ¡°growth in
advanced Europe has been revised down by 0.1 percentage
point to 1.3 percent in 2019, while growth in emerging
Europe has been revised up by 0.5 percentage point to 1.8
percent¡±.
In total, the EU imported 1.66 million MT of tropical
wood products in the first nine months of 2019, 5.3%
more than the same period in 2018. The total value of EU
imports of tropical wood products in the January to
September 2019 period was €1.80 billion, 9% more than
the same period in 2018.
So far this year, there have been gains in EU imports of
tropical sawnwood, charcoal, plywood, mouldings, and
joinery products. These have been only partly offset by a
decline in imports of tropical logs, veneers, and flooring.
7% rise in EU imports of tropical sawnwood
EU imports of tropical sawn wood increased 7% to
582,500 MT in the first nine months of 2019 compared to
the same period in 2018. Import value increased 3% to
€557.9 million.
This aligns with market commentary earlier in the year,
with sawn hardwood importers reporting generally steady,
in some cases strong trading in 2019 including in tropical
timber, despite some slowdown in economic activity and
increased downside concerns about the medium-term
outlook.
Imports from Cameroon, particularly slow in 2018,
increased 11% to 209,000 MT during the first nine months
of 2019. Imports also increased sharply from several other
countries including Brazil (up 30% to 105,100 MT),
Gabon (up 8% to 79,600 MT), Congo (up 32% to 45,800
MT), and Ghana (up 20% to 13,300 MT).
After a strong start to the year, imports from DRC were
10,100 MT in the first nine months of 2019, only 1% more
than the same period in 2018. These gains offset a 28%
decline in imports from Malaysia, to 57,500 MT, and a 6%
decline from Côte d'Ivoire to 20,900 MT (Chart 2).
The decline in EU imports from Malaysia this year was
attributed by some importers to a decline in the availability
of PEFC certified product following the suspension of
MTCS certification in Johor and Kedar states in May this
year which led to the total certified area in Malaysia to fall
by around 25%.
According to MTCS, both states are now working to
regain their MTCS certificates. At present, MTCScertified
forest areas consist of 4.2 million hectares of
natural forests and 109,025 hectares of forest plantation.
The trend towards increased concentration of tropical
sawn wood imports into the EU by way of Belgium has
continued this year. In the first half of 2019 compared to
the same period in 2018, imports into Belgium increased
11% to 209,200 MT. (Chart 3)
However, direct imports of sawnwood from tropical
countries also increased in some EU countries in the first
nine months of 2019. Imports increased in France (up 11%
to 69,400 MT), the UK (up 16% to 44,200 MT), Spain (up
38% to 43,700 MT), Portugal (up 28% to 21,400 MT), and
Ireland (up 78% to 10,800 MT).
These gains offset declining imports in the Netherlands (-
13% to 93,600 MT), Italy (-9% to 50,500 MT) and
Germany (-9% to 18,200 MT).
EU imports of tropical logs slow in third quarter
After recovering ground in 2018 and stabilising in the first
half of 2019, EU imports of tropical logs slowed in the
third quarter of 2019. Imports of 76,700 MT during the
first nine of the year were 13% less than the same period
in 2018. Import value fell 14% to €37.3 million during the
period.
In the first nine months of 2019, EU imports of tropical
logs increased by 18% to 25,100 MT from Congo, the
leading supplier, by 16% from Liberia to 6,700 MT, by
17% from Suriname to 1300 MT, and by 20% from
Guyana to 1,200 MT.
However, these gains were offset by falling imports from
the Central African Republic (-17% to 13,200 MT), DRC
(-35% to 10,600 MT), Cameroon (-20% to 11,300 MT),
and Equatorial Guinea (-64% to 2,900 MT) (Chart 4).
After a more buoyant second quarter, imports of tropical
logs slowed into France and Belgium in the third quarter
of 2019. By the end of the first nine months, France had
imported 28,900 MT of tropical logs, 13% less than the
same period in 2018, while imports into Belgium were
down 23%, at 18,300 MT. Imports were also down 21% to
11,700 MT in Portugal during this period.
Rising log imports in some smaller markets, including
Italy (+3% to 7,900 MT), the Netherlands (+18% to 2,100
MT) and Spain (+11% to 2,100 MT) were insufficient to
offset falling imports in France, Belgium and Portugal.
EU imports of tropical decking buoyant this year
EU imports of tropical mouldings (which include both
interior mouldings and exterior decking products)
increased sharply, by 19%, to 157,600 MT in the first nine
months of 2019. Import value increased 26% to €239
million.
EU imports of tropical mouldings increased from all the
leading suppliers of this commodity in the first nine
months of 2019 including Brazil (+21% to 66,300 MT),
Indonesia (+10% to 51,600 MT), Peru (+20% to 8,600
MT), Malaysia (+11% to 9,500 MT), Gabon (+95% to
6,400 MT) and Bolivia (+33% to 5,600 MT) (Chart 5).
In the first nine months of 2019, imports of tropical
mouldings increased in France (+36% to 49,500 MT),
Netherlands (+39% to 26,600 MT), the UK (+26% to
9,400 MT), Italy (+18% to 6,800 MT) and Denmark
(+18% to 3,800 MT). However, imports weakened in
Germany, down 6% to 28,300 MT, and Belgium, down
3% to 22,400 MT.
EU imports of tropical veneer down 6%
Following a similar trajectory to sawn hardwood imports,
EU imports of tropical veneer slowed in the third quarter
of 2019 after a strong performance in the first six months
of the year. Imports, which were up 10% on the previous
year in the first half of 2019, declined 2% to 102,000 MT
in the nine months to September. Import value decreased
1% to €131.7 million during this period.
The EU imported 44,200 MT of veneer from Gabon in the
first nine months of 2019, 4% less than in the same period
in 2018. Imports also declined from Cote d¡¯Ivoire (-6% to
21,400 MT), Republic of Congo (-15% to 6,600 MT), and
Ghana (-10% to 3,600 MT).
However, imports from Cameroon stayed just ahead of last
year¡¯s level, at 14,500 MT two percent more than the same
period in 2018. There was also a significant increase in
imports from DRC, by 69% to 2,400 MT, in the first half
of 2019 (Chart 6).
In the first half of 2019, tropical veneer imports increased
by 1% in France to 36,600 MT, by 6% in Italy to 26,500
MT, by 2% in Greece to 8,200 MT, and by 11% in
Romania to 4,500 MT. However, imports fell by 13% in
Spain, to 15,700 MT.
Large Chinese suppliers increasingly dominant in UK
tropical plywood imports
EU imports of tropical plywood products were 250,100
MT in the first nine months of 2019, 4% more than the
same period last year. Import value increased 7% to
€221.5 million.
A large and growing proportion of the plywood faced with
tropical hardwood imported into the EU is manufactured
in China. The EU imported 110,000 MT of this product
from China in the first nine months of 2019, 32% more
than during the same period in 2018. When linked with
news that numerous smaller mills in China have closed in
recent years due to new emissions controls, and anecdotal
reports from European buyers of a greater focus on quality
and species content due to EUTR and CE Marking
requirements, the strong implication is that the trade is
becoming more concentrated amongst a few large
consolidated suppliers in China.
Although direct imports of plywood have increased from a
few tropical countries this year, the total volume was
down 12% at 122,300 MT in the first nine months of 2019.
Imports increased from Gabon by 12% to 11,100 MT,
from Brazil by 8% to 8,700 MT, and from Morocco by
41% to 4,600 MT.
However, these gains were not enough offset declining
plywood imports from the two largest tropical suppliers,
Indonesia and Malaysia, this year. Imports from Indonesia
declined 6% to 64,500 MT and fell 29% from Malaysia to
29,700 MT.
A brief surge in imports from Vietnamearlier in the year
also faltered in the third quarter so that total imports were
down 20% at 8,100 by the end of the nine months to
September 2019. (Chart 7).
EU imports of tropical hardwood plywood during 2019 are
being strongly influenced by market issues elsewhere in
the world, notably the US-China trade dispute which has
led to a dramatic decline in Chinese hardwood plywood
exports to the United States and increasing diversion of
Chinese product to the EU, mainly destined for the UK.
In the first nine months of 2019, UK imports of tropical
plywood products increased 19% to 140,300 MT, despite
widespread reports of overstocking and declining plywood
consumption in the country.
UK imports of tropical hardwood plywood from China
increased 72% to 78,800 MT in the first nine months of
2019, while UK imports from Malaysia fell 29%, to
25,100 MT, and were down 7% from Indonesia to 26,900
MT.
In contrast to the UK, tropical plywood imports declined
into all other major EU markets in the first nine months of
2019, including Belgium (-21% to 26,300 MT),
Netherlands (-11% to 24,200 MT), Germany (-7% to
18,600 MT), France (-3% to 14,700 MT) and Italy (-4% to
12,300 MT).
A small increase in imports into Greece, by 4% to 2,300
MT, did little to mitigate this downward trend.
Indonesia and Vietnam boost share of EU tropical
joinery imports
EU imports of tropical joinery products, mainly doors
(from Indonesia), and laminated window scantlings and
kitchen tops (from Indonesia, Malaysia and Vietnam),
increased 19% to 119,700 MT in the first nine months of
2019. Import values also increased rising 26% to €244.1
million.
EU imports in the first half of 2019 increased from all
three of the countries that dominate international trade in
tropical joinery products including Indonesia (+19% to
65,100 MT), Malaysia (+25% to 34,700 MT), and
Vietnam(+8% to 11,500 MT) (Chart 8).
In the first half of 2019, imports of tropical joinery
products increased by 9% to 48,200 in the UK, by 75% to
37,300 MT in the Netherlands, and by 1% to 14,400 MT
in Belgium. There were also significant gains in two
smaller markets for tropical joinery products, Ireland
increasing 97% to 2,500 MT and Poland up 50% to 1,300
MT. These gains offset a 22% fall in France to 8,100 MT,
and a 14% fall in Germany to 5,500 MT.
Another fall in EU imports of tropical flooring
EU imports of flooring products from tropical countries
fell a further 4% to 19,700 MT in the first nine months of
2018, continuing a long term decline in response to tough
competition from European and Chinese manufacturers
and non-wood alternatives, fashion trends favouring
temperate timbers, supply constraints, and challenges of
EUTR conformance. The value of EU imports of wood
flooring was more stable, at €45.7 million in the nine
month period, only slightly less than €45.8 million in the
same period last year.
This year, falling imports from traditionally the leading
suppliers ¨C Malaysia (-20% to 5,700 MT), Indonesia (-6%
to 5,000 MT), and Brazil (-5% to 4,000 MT) ¨C has been
partially offset by rising imports from Vietnam(+47% to
2,600 MT), Bolivia (from near zero to 600 MT), and India
(+187% to 300 MT) (Chart 9).
In the first nine months of 2019, tropical wood flooring
imports recovered a bit of ground in France (+25% to
5,400 MT), UK (+54% to 2,200 MT), and the Netherlands
(+11% to 1,700 MT).
However, imports fell in most other significant European
markets including Belgium (-3% to 2,500 MT), Italy (-
16% to 1,600 MT), Denmark (-38% to 1,500 MT),
Germany (-17% to 1,400 MT), and Spain (-1% to 1,400
MT).
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