EU tropical imports sliding again
While there are clear signs that the EU economy is picking
up EU trade in tropical timber continues to slide. Market
demand within in producer countries and other non-EU
consuming markets are now probably more important
drivers of trade volumes into the EU than the current and
potential level consumption in the region.
With tropical wood supplies constrained globally and
strong demand elsewhere, particularly in China, and the
additional challenge of satisfying EUTR due diligence
requirements in the EU, tropical suppliers seem more
inclined to focus on other markets.
The total value of EU imports of tropical timber products
was euro1.65 billion in the first nine months of 2017, 5%
less than the same period in 2016. In quantity terms,
imports into the EU between January and September 2017
were 1.53 million metric tonnes (MT), nearly 9% down on
the previous year.
The unit value of EU tropical timber imports has increased
slightly this year, from euro1039/MT to euro1080/MT,
mainly because imports of higher value products like
plywood, glulam, veneer and decking have declined less
than imports of unprocessed logs and sawnwood.
Although there was the usual seasonal rise in EU tropical
timber imports in the first half of 2017, this was subdued
compared to 2016 and imports declined sharply in the
third quarter (Chart 1).
A large part of the decline in EU tropical timber imports in
the first nine months of 2017 was concentrated in
sawnwood, which in tonnage terms were down 20%
compared to the same period in 2016.
During this period there was also a fall in import tonnage
of tropical charcoal (declining 2% to 266,000 MT),
decking/mouldings (declining 5% to 122,000 MT), veneer
(declining 6.3% to 110,000 MT), logs (declining 31% to
76,000 MT) and flooring (declining 3% to 28,000 MT)
Tropical plywood apparently bucked this trend, with EU
imports rising 30% to 464,000 cu.m in the first nine
months of 2017.
However much of this gain comprised tropical hardwood
plywood manufactured in China, rather than direct imports
from the tropics, and may well be due to the increased
range of hardwood types specifically identified as
¡°tropical¡± rather than ¡°other¡± in the HS product definition
since the start of this year. (Chart 3).
The downturn in EU imports of tropical timber products
during the first nine months 2017 was concentrated in
Belgium (declining 20% to 300,000 MT), France
(declining 22% to 194,000 MT), and Italy (declining 16%
to 125,000 MT).
The only market apparently recording significant growth
in tropical timber imports during this period was the UK,
rising 15% to 258,000 MT. (Chart 4).
The apparent rise in tropical imports in the UK is
misleading because this is by far the largest European
destination for tropical hardwood plywood from China.
Direct imports of tropical timber products into the UK
have not posted significant gains this year.
EU sawn timber imports fall 21%
In volume terms, EU imports of tropical sawnwood were
670,500 cu.m in the first nine months of 2017, 21% less
than the same period in 2016. Although a large share of
the decline was due to a 25% fall in imports from
Cameroon (to 241,000 cu.m), there was a fall in trade with
nearly all the main supply countries.
EU tropical sawnwood imports fell sharply from Brazil
(declining 12% to 76,600 cu.m), Gabon (declining 25% to
72,500 cu.m), Congo (declining 13% to 42,100 cu.m),
Cote d¡¯Ivoire (declining 24% to 36,000 cu.m).
Ghana (declining 14% to15,500 cu.m) and DRC (declining
57% to 11,300 cu.m). Of major suppliers, only Malaysia
maintained a level (110,000 cu.m) close to that of the
previous year. (Chart 4).
In the first nine months of 2017, imports of tropical
sawnwood declined into all the main EU markets, with the
single exception of the UK.
Imports were down 29% in Belgium (202,600 cu.m), 6%
in the Netherlands (103,100 cu.m), 26% in France (80,200
cu.m), 35% in Italy (73,100 cu.m), 21% in Spain (45,200
cu.m), 14% in Germany (31,700 cu.m), and 10% in
Portugal (22,200 cu.m). Imports in the UK increased, but
by only 2% to 67,600 cu.m.
EU log imports fall from all leading tropical suppliers
The EU trade in tropical logs followed a similar downward
path. Imports in the first nine months of 2017 totalled just
90,400 cu.m, 28% less than the same period in 2016, and
fell 29% to 22,700 cu.m from Congo, 31% to 18,500 cu.m
from Cameroon, 50% to 13,500 cu.m from DRC, and 44%
to 9,800 cu.m from CAR.
However, there were gains in imports from some smaller
suppliers, notably Angola (to 5,300 cu.m from a negligible
level in 2016). (Chart 5).
EU imports of tropical veneer declined 7% to 238,400
cu.m in the first nine months of 2017, mainly due to a 10%
fall in imports from Gabon to 119,000 cu.m. There was
also a 14% fall in imports from Cote d¡¯Ivoire to 51,100
cu.m, and a 7% fall in imports from Cameroon to 22,700
cu.m. However, imports increased from some smaller
suppliers including Congo (rising 7% to 14,400 cu.m),
Equatorial Guinea (rising 17% to 8,800 cu.m) and Ghana
(rising 6% to 7,300 cu.m). (Chart 7).
Most of the decline in EU imports of tropical veneer was
concentrated in the two largest EU markets; France and
Italy. Tropical veneer imports increased in Spain, Greece
and Romania during the nine-month period.
EU imports of moulding/decking were more stable than
for other tropical products in the first nine months of 2017,
falling only 5% to 121,000 cu.m.
Imports declined 4% from Indonesia to 54,300 cu.m, 3%
from Brazil to 43,100 cu.m, and 30% from Malaysia to
6,900 cu.m. There was a 17% gain in imports of
mouldings/decking from Peru, but from a small base to
4,400 cu.m. (Chart 8).
Tropical glulam, mainly laminated window scantlings and
kitchen, was one of the few tropical wood products to
record an increase in EU trade in the first nine months of
2017, with imports rising 9% to 43,800 MT. Imports from
Malaysia increased 31% to 19,800 MT but declined 2%
from Indonesia to 16,500 MT and 1% from Vietnam to
Imports decline despite economic growth
As noted in previous MIS reports, the downturn in imports
is more disappointing because it is occurring at a time
when there are clear signs that the EU is at last returning
to economic health. In their autumn statement issued in
November, the European Commission said that the latest
GDP statistics show that the EU "is on track to grow at its
fastest pace in a decade this year."
The EC forecast that the eurozone economy will grow by
2.2% this year and 2.1% next year, a significant
improvement on their previous forecast in May (1.9% in
both 2017 and 2018). For the whole EU, including noneurozone
countries, growth is expected to be a "robust"
2.3% this year and 1.9% next year - compared to 1.9% for
both years that was expected in May.
The EC noted that for the first time in a decade all EU
countries will grow this year. This was due, according to
the EC, to ¡°resilient private consumption, stronger growth
around the world, and falling unemployment".
Investment in the EU is also "picking up" and confidence
in the economy has "considerably brightened", encouraged
partly by the European Central Bank policy of low interest
rates and massive bond buying.
The EC noted downside trends, notably " sluggish wage
growth¡± which ¡°partly reflects low productivity growth
and persistent slack in the labour market." But for the first
time, risks surrounding the economic outlook are
considered by the EC to be "broadly balanced" instead of
"tilted to the down side".