EU buying less M’sian plywood products

KUCHING: Malaysia’s export of tropical plywood products to the European Union (EU) has fallen drastically, with the country losing its market share to China.

In the first six months of 2019 (H1-2019), EU’s imports of plywood products from Malaysia was down by 32 percent to 19,700 metric tonnes (MT) from H1-2018. Its imports from Indonesia declined by four percent to 46,300 tonnes.

During H1-2019, EU increased its imports of tropical plywood products by eight percent to 174,200 tonnes from H1-2018 while import value rose 14 percent to 154.4 million euros.

“A large and growing proportion of the plywood faced with tropical hardwood imported into the EU is manufactured in China,” according to International Tropical Timber Organisation (ITTO) tropical timber market report in its latest issue (Sept 16-30).

Indonesia and Malaysia are respectively the second and third largest suppliers of tropical plywood products to the EU.

Imports from China soared by 39 percent to 76,100 tonnes or about 44 percent of total EU’s imports.

Indonesia and Malaysia are respectively the second and third largest suppliers of tropical plywood products to the EU. The EU also imported more from Gabon (+9 percent to 7,400 tonnes), Vietnam (+3 percent to 6,100 tonnes) and Brazil (+9 percent to 6,000 tonnes) in H1-2019.

“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 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,” said ITTO report.

In H1-2019, UK’s imports of tropical plywood products jumped by 17 percent to 95,400 tonnes despite widespread reports of overstocking and declining plywood consumption in the country.

UK’s imports of tropical hardwood plywood from China soared by a whopping 81 percent to 55,000 tonnes. But EU’s imports from Malaysia fell 32 percent to 16,800 tonnes while imports from Indonesia was down by 14 percent to 17,800 tonnes.

“Tropical plywood imports into other EU countries were less volatile in the first half of 2019.

“Moderate declines in imports in Belgium (-8 percent to 19,100 MT), Germany (-3 percent to 13,000 MT), France (-3 percent to 10,100 MT) and Italy (-2 percent to 8,800 MT) were offset by an 8 percent rise in imports in the Netherlands to 18,500 MT.”

European Statistical Office figures shown that EU’s production of tropical hardwood plywood has increased steadily over the years — from 315,000 tonnes (2016) to 409,000 tonnes (2017) and 446,000 tonnes (2018).

On tropical sawn wood, although EU’s imports in H1-2019 has risen by 12 percent to 405,600 tonnes from H1-2018, the imports from Malaysia (fourth largest supplier after Cameroon, Brazil and Gabon) plunged by 29 percent to 40,900 tonnes.

Imports from Brazil shot up by 47 percent to 77,600 tonnes, Gabon by 20 percent to 58,600 tonnes and Congo by 38 percent to 30,200 tonnes.

“The decline in EU imports from Malaysia this year was attributed by some importers to a decline in the availability of PEFC (Programme for the Endorsement of Forest Certification) certified products following the suspension of MTCS certification in Johor and Kedah states which led to the total certified area in Malaysia to fall by around 25 percent.

“According to MTCS (Malaysia Timber Certification Scheme), both states are now working to regain their MTCS certificates,” said the ITTO report.

There was a 40 percent fall in imports of Malaysian sawn hardwood in the Netherlands, the leading EU destination for Malaysian timber where there is also a particularly strong emphasis on sourcing certified products.

According to ITTO, tropical Asian suppliers have made gains in EU joinery products market.

EU’s imports of tropical joinery products, mainly doors (from Indonesia) and laminated window scantlings and kitchen tops (from all leading tropical suppliers) expanded by 21 percent to 79,500 tonnes in H1-2019. Import value grew 33 percent to 166 million euros.

Malaysia raised its exports of tropical mouldings to EU by 39 percent to 23,000 tonnes in H1-2019 from H1-2018 while exports from Indonesia and Vietnam to the EU were up by 16 percent and seven percent to 43,500 tonnes and 7,400 tonnes respectively during the same period.

EU also recorded a 10 percent increase in imports of tropical veneer to 71,900 tonnes in H1-2019. Malaysia is not a main supplier.

EU’s total imports of all wood products from tropical countries in H1-2019 were 1.24 million tonnes worth 1.26 billion euros which were 16 percent and 15 percent higher respectively against H1-2018.

“This growth is surprising given that the wider economic situation in the EU has continued to deteriorate this year,” said ITTO report.