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The IMM market update for May 2020 analyses the latest data on EU27+UK imports of tropical wood (HS44) and wood furniture (HS94) from VPA Partner countries and competing non-VPA timber supplying countries. 

EU27+UK imports of tropical timber products from countries not engaged in the VPA process were making strong gains during 2018 and the first half of 2019, but in the case of Brazil and China, there was a significant slowdown in trade in the second half of 2019 which continued into the first quarter of 2020.

Of the three VPA negotiating countries in Africa, Gabon is the largest supplier to the EU27+UK. After declining in 2017, EU27+UK imports from Gabon in the next two years were very volatile on a monthly basis but overall, on an annual basis, were flat at around US$190 million.

Of VPA negotiating countries, Malaysia is by far the largest supplier of tropical timber products to the EU. EU imports from Malaysia which hit a low of US$543 million in the year ending April 2017, had recovered to US$608 million in the year ending February 2019, but fell back to US$567 million in the year ending February 2020.

The two countries in Latin America that recently completed VPA negotiations, Guyana and Honduras, are currently only small suppliers of timber to the EU.

EU27+UK imports of wood products from Vietnam, the only VPA implementing country in Asia, which were flat in 2016 and 2017, increased consistently throughout 2018 and the first nine months of 2019, before levelling off in the last quarter of 2019 and first quarter of this year.

EU27+UK wood imports from Cameroon have been very volatile in recent years (see Chart). 12-month rolling total imports from Cameroon, which increased sharply to US$338 million in December 2016, fell to a low of US$257 million in March 2018. In the following months, imports recovered to US$309 million in the year ending June 2019 before sliding to US$291 in the year ending March 2020.

eu imports from africa implementing

Most EU27+UK trade with Cameroon comprises sawnwood destined for Belgium. The volatility is due to supply side problems, notably shipment delays caused by bureaucratic red tape and poor infra-structure after many years with little or no investment at Douala, the country’s only major port.

EU27+UK imports from the Republic of Congo (RoC), comprising sawnwood, logs and veneers, were rising consistently throughout 2018 and 2019. Rolling 12-month imports increased from US$78 million in January 2018 to a peak of US$105 million in November 2019 before easing back to US$102 million in March 2020. In the last two years there has been particularly strong growth in Belgian imports of logs and sawnwood and French imports of veneers from the RoC.

EU27+UK  imports from Ghana, mostly of sawnwood and veneer, remain low but have been rising gradually in the last three years. The 12-month rolling total increased from US$32 million in March 2018 to US$33 million in March 2019, and to US$34 million in March this year. Although direct imports from Ghana into Germany and France have declined, this has been offset by rising imports into Belgium and the UK. Italian imports of Ghanaian sawnwood and veneer have been stable.

EU27+UK imports from Central African Republic (CAR), recovered from an annualised low of US$8 million in November 2017 to US$13 million in October 2018, where there remained level for the next three quarters. However, between the middle of 2019 and March 2020, annualised imports eased back again to US$9 million. EU27+UK imports of from CAR now consist almost exclusively of logs, mainly for France, Portugal and Belgium. Imports of sawnwood, previously destined mainly for Belgium, have fallen to negligible levels.

EU27+UK imports from Liberia, all of which comprises logs, are very limited, in recent years averaging around 5,000 tonnes with value less than US$3 million per year. However, in 2019 there was an uptick, with import quantity rising 29% to 7,500 tonnes with value closer to US$4 million.

In terms of the mix of products from VPA implementing countries in Africa, EU27+UK imports of logs and sawnwood were reasonably robust in 2019, but there was a downturn in imports of veneer. In 2019, imports of tropical veneer declined from Cameroon (-5% to 18,200 tonnes), Republic of Congo (-11% to 10,000 tonnes), and Ghana (-6% to 4,700 tonnes).

The downturn in African veneer imports was particularly dramatic in the second half of 2019 - partly allied to weakness in the European plywood and door manufacturing sectors during this period. There are also signs that tropical wood veneer is coming under pressure from temperate wood substitutes and a wide range of artificial surface materials.

EU27+UK imports of wood furniture from Indonesia made large gains in the second and third quarter of 2019 and maintained this high level through to the end of March 2020.

Wood furniture from Indonesia maintained its position at the top of the league of the largest gains in EU tropical wood product imports in the twelve months to March 2020.

Having reached the highest level in more than a decade in October 2019, EU 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.

It is ironic that in 2019, just before the market chaos created by COVID-19, the EU27+UK recorded its strongest year for tropical timber product imports since 2007. That was, of course, when the last consumer boom was at its peak just prior to the market meltdown of the financial crises.

As a part of the IMM 2018 and 2019 EU trade surveys, respondents were asked whether FLEGT-licensing and the introduction of the EUTR had had any direct impact on the share of tropical timber in their overall timber imports[1]. As demonstrated in chart 1, contrasting impacts were identified for FLEGT-licensing and EUTR.