KUCHING: Tropical wood products have recorded the largest increase in market share in European Union (EU) for at least the last 15 years in 2022, following a strong rebound of 21 per cent of the value of EU27 imports of wood products and wooden furniture.
The recovery in the value and share of tropical wood products trade with the EU in 2022 was driven both by normalisation of supply chains and falling freight rates after the severe disruption of COVID-19 pandemic.
This was coupled with a sharp fall in available supply of wood products from Russia and Belarus during the year, according to International Tropical Timber Organisation (ITTO) Tropical Timber Market Report (March 16-31, 2023). “In 2021, logistical problems on the supply side in tropical countries during the COVID-19 pandemic seemed to accelerate the long term trend away from tropical timber products in the EU27 market.
“The share of tropical products in the total value of EU27 imports of wood and wood furniture fell from 20 per cent in 2020 to just 17 per cent in 2021. However, last year the situation was transformed as tropical products recorded the largest increase in share for at least the last 15 years,” said the report.
In 2021, the EU27 imported wood and wooden furniture worth US$4.95 billion from Russia and Belarus, nearly one-quarter of the bloc’s total import value of these products. However, this fell to just US$2.24 billion in 2022.
The EU first imposed trade sanctions on Belarus timber products on March 2, 2022, and these were extended to Russian timber products on April 8. On the other hand, on March 10, 2022, Russia’s Industry and Trade Ministry announced a ban on all wood and timber-related exports to “unfriendly countries”, including EU, United Kingdom (UK) and United States (US).
In March 2022, two leading certification organisations, the Programme for the Endorsement of Forest Certification (PEFC) and Forest Stewardship Council (FSC) announced that all timber origination from Russia and Belarus would be categorised as “conflict timber” (i.e. from a controversial source) and not eligible to be sold and promoted as PEFC or FSC certified.
This had a significant impact on many European companies which had become heavily dependent on Russia and Belarus for their supplies of certified wood.
According to the ITTO report, of the total FSC global forest area of 237 million hectares at the start of last year, 63 million hectares (27 per cent) was in Russia and 1.5 million hectares (6 per cent) in Belarus.
Of PEFC certified area worldwide of 328 million hectares at the start of last year, 32 million hectares (10 per cent) was in Russia and nine million hectares (3 per cent) in Belarus.
At the start of 2023, PEFC reported no certified forest in either Russia or Belarus. FSC is currently reporting zero certified forest area in Belarus but 39.5 million in Russia despite the “conflict timber” categorisation. EU27 trade data indicates that these measures took time to take effect, with timber products continuing to be imported in significant volumes from both Russia and Belarus until July 2022.
However, EU27 imports from both countries fell close to zero in the first five months of the year.
“In value terms, tropical products were significant beneficiaries of the sharp fall in EU27 imports of wood products from Russia and Belarus during 2022.
“Whereas total EU27 imports of wood and wooden furniture fell 4 per cent from US$21.2 billion in 2021 to US$20.4 billion in 2022, imports of tropical products increased 18 per cent from US$3.7 billion to US$4.4 billion during the same period,” said the report.
EU27 increased import bill by only four per cent to US$6 billion for the shipment of wood and wooden furniture from China in 2022 although this did build on a massive 42 per cent gain the previous year. Imports value from Ukraine also climbed by nine per cent to US$1.9 billion in 2022 despite the serious disruption by the war, following a 55 per cent gain in 2021.
Other significant beneficiaries were Turkey, for which EU27 import value increased 32 per cent to US$890 million last year and non-tropical products from Brazil, which recorded a 54 per cent increase to US$690 million in 2022.
In volume terms, tropical sawn hardwood recorded a particularly large increase in share of total EU27 imports of sawn hardwood in 2022. Imports of tropical sawnwood rose 18 per cent to 1.01 million cubic metres (cu m) during the year, exceeding one million cu m for the first time since 2016.
“In contrast, EU27 imports of temperate hardwood fell 23 per cent to 890,000 cu m in 2022.
The share of tropical hardwood in total EU27 sawn hardwood imports jumped from 43 per cent in 2021 to 53 per cent in 2022, the highest share since 2013. “Tropical sawnwood was by far the largest beneficiary of the decline in share of Russian and Belarus sawn hardwood in 2022 as other suppliers of temperate hardwood made only minor gains.
Imports from Ukraine increased just 4 per cent to 192,000 cu m while imports from the US were up only 2 per cent to 187,000 cu m,” said the ITTO report. It added: “Russia’s invasion of Ukraine had a massive impact on the EU market for plywood in 2022.
ITTO interviews with EU plywood importers during the year indicated a huge rush for products from the tropics where mills were encouraged to ramp up production as much as possible for the EU markets. “Tropical manufacturers were particularly encouraged to launch (or relaunch) production of thicker film-faced boards, mostly supplied to the EU by Russia in recent years.”
The share of tropical products in total EU27 plywood imports, which fell to an all-time low of just seven per cent in 2021, rebounded to nine per cent in 2022, close to the level prevailing in the decade before the pandemic. Total direct imports of plywood from the tropics surged 48 per cent to 266,000 cu m in 2022, with imports from Indonesia up 13 per cent to 92,000 cu m and from Gabon soared 124 per cent to 72,000 cu m.
Imports of tropical hardwood plywood from China fell 32 per cent to 31,000 cu m. In contrast, EU27 imports of non-tropical hardwood plywood from China climbed 41 per cent to 906,000 cu m.
