KUCHING: The EU27 (European Union 27 member countries) has significantly increased the imports of tropical wood and wood furniture from tropical countries, including Malaysia, due to the curtailment of wood supplies from Russia and Belarus.
The shrinking wood supplies from Russia and Belarus due to the sanctions imposed by the EU following the invasion of Ukraine by Russia in February 2022 is opening up new opportunities in the EU market for some tropical wood products, notably plywood and decking for which Russian birch and larch products have been important substitutes, according to International Tropical Timber Organisation (ITTO) Tropical Timber Market Report (July 1-15, 2022).
In the first four months of 2022 (4M2022), the value of EU imports of tropical wood and wood furniture jumped by 28 per cent to US$1.23 billion (RM5.48 billion) from the same period in 2021. In terms of value, this was by far the highest level of trade in the last five years, and at a level not seen since before the 2008-2009 financial crisis.
“Part of the gain in EU27 tropical wood product import value in the first four months of this year reflected a rise in CIF (cost, insurance & freight) prices, driven both by continuing high freight rates and severe shortage of wood and other materials due to logistical challenges during the global (COVID-19) pandemic.
“In quantity terms, EU imports of tropical wood and wood furniture products in the first four months of this year were at 669,000 tonnes, up 14% compared to the same period in 2021,” said the ITTO report.
In 4M2022, tropical products accounted for 8.2 per cent of the quantity of all wood and wood furniture products imported into EU27 against 6.9 per cent in 4M2021.The gain in tropical wood share is due mainly to a 37 per cent and 17 per cent reduction in imports respectively from Russia and Belarus during the period.
During the January-April 2022 period, EU27 wood furniture’s import value climbed by 18 per cent to US$691 million as compared to the same period in 2021 while import value of tropical sawnwood soared by 33 per cent to US$297 million during the same period. The European bloc import value of tropical mouldings/deckings gained 42 per cent to US$154 million year-on-year.
There were also large gains in the value of EU27 imports of tropical joinery products (+63% to US$102 million), tropical veneer (+24% to US$74 million), plywood (+50% to US$71 million), marguetry (+88% to US$43 million) and flooring (+40% to US$30 million) in 4M2022 from a year ago. EU27 import value of tropical logs was US$17 million, an increase of nine per cent during the same period.
Malaysia is the No 1 supplier of tropical flooring to EU27 in 4M2022, with shipment of 9,400 tonnes, up by 30 per cent from 4M2021. The rise in EU27 wood flooring imports from Malaysia that began in 2020 has continued this year, recording 4,900 tonnes in 4M2022, up 34 per cent from the same period in 2021.
There were also large gains, from a smaller base, of EU27 imports of wood flooring products from Indonesia (+41% to 2,100 tonnes) and Vietnam (+33% to 1,300 tonnes). On the other hand, the shipments of such products into EU27 from Brazil have continued to slide to just 600 tonnes in 4M2022, a decline of six per cent from 4M2021.
On EU27 wood furniture imports from tropical countries in 4M2022, the value of imports from Malaysia rose by nine per cent to US$53 million while that from top suppliers Vietnam and Indonesia surged by 19 per cent and 43 per cent to US$298 million and US$200 million respectively.
However, imports by the European bloc from India, after increasing sharply last year, were down five per cent to US$122 million while that from Thailand fell 10 per cent to US$10 million in 4M2022.
The ITTO report said after two slow years during the global pandemic, EU27 imports of tropical sawnwood have shown signs of recovery this year. Imports of 243,000 tonnes in 4M2022 was 18 per cent higher than a year ago and 37 per cent more than the same period in 2020. Imports from Malaysia rose 46 per cent to 20,000 in 4M2022 while shipments increased sharply from top supplier Cameroon (+28% to 78,700 tonnes) and Gabon (+24% to 39,700 tonnes).
On tropical logs, EU27 imported 36,900 tonnes in 4M2022, up 36 per cent as compared to a year ago. The most significant trend was shipment from Malaysia, at negligible levels for many years, to 8,400 tonnes in 4M2022. “The rise coincides with a limited export programme by the Malaysian state of Sabah allowing eligible parties to export unprocessed timber from natural forests which began on Jan 3 this year,” according to the report.
On the other hand, EU27 logs imports from African countries were down considerably: from Congo (-19% to 8,000 tonnes), Central African Republic (CAR) (-9% to 4,900 tonnes) and Cameroon (-56% to 1,800 tonnes).
Malaysia is a small supplier of tropical plywood to European bloc which imported 40,200 tonnes in 4M2022. Top supplier Indonesia shipped 40,200 tonnes to EU27, up 11 per cent from 4M2021. The biggest gainers were suppliers from Gabon (+84% to 9,500 tonnes) and Morocco (+58% to 3,700 tonnes) while the biggest loser was China (-42% to 4,700 tonnes).
On other joinery products from tropical countries, EU27 recorded a 63 per cent jump in imports value to US$103 million in 4M2022. These products comprise laminated window scantlings, kitchen tops and wood doors. From Indonesia, imports surged by 55 per cent to US$49 million and from Malaysia and Vietnam, shipments increased by 43 per cent and 30 per cent to US$29 million and US$9 million respectively.
“The apparent large increase in imports of this commodity group from China, from negligible levels to US$6.2 million in the first four months of this year, is due to a change in product codes from the start of this year allowing more joinery products manufactured using tropical hardwood in non-tropical countries to be separately identified,” according to ITTO report.
