KUCHING: EU27’s (European Union 27 member countries) import value of tropical wood and wood furniture products in the April-June 2022 quarter (2Q2022) has shot up to its highest quarterly level since at least before the 2007-2008 financial crisis.
In the current quarter under review, imports of these products by the European bloc rose to US$1.27 billion (RM5.697 billion), which was up by 11 per cent from Q12022 and 25 per cent from Q22021.
Malaysia is the largest supplier of tropical flooring to EU27 and the country has also increased the exports of tropical wood furniture, tropical sawnwood, tropical mouldings/decking and joinery products to EU27 this year.
“In the first six months of this year (6M2022), import value of tropical wood and wood furniture totalled US$2.42 billion, a gain of 29% compared to the same period last year. Part of this gain in EU27 tropical wood product import value was due to a rise in CIF (cost, insurance & freight) prices.
“This was driven by the combination of a sharp fall in the value of the euro against the dollar, continuing high freight rates, and severe shortages of wood and other materials.
“In quantity terms, EU imports of tropical wood and wood furniture products in the first six months of this year were at 1,025,300 tonnes, up 15% compared to the same period in 2021,” according to International Tropical Timber Organisation (ITTO) Tropical Timber Report (Aug 16-31, 2022).
Since the start of this year, the euro value has declined around 10 per cent against the US dollar, and is currently at the lowest level for 20 years. In mid-July, the euro hit parity with the US currency for the first time since 2022.
In 6M2022, tropical products accounted for 8.8 per cent of the quantity of all wood and wood furniture products imported into the EU27, which compared to 6.8 per cent during the same period in both 2021 and 2020.
The gain in tropical wood share is due mainly to large reduction in imports from Russia (-50% to 2.19 million tonnes) and Belarus (-26% to 1.31 million tonnes) during this period. After an initial fall in the early months of the war, EU27 imports from Ukraine recovered some grounds in the second quarter and by the end of the first six months of this year were at 1.03 million tonnes, only 1% down on the same period in 2021.
According to the ITTO, while tropical wood has made gains in the EU market this year, the largest beneficiaries of the opening supply gap due to the fall in imports from Russia and Belarus have been non-tropical wood products from Norway, China, Brazil, Turkey, Chile, New Zealand, Uruguay and South Africa.
On tropical furniture, EU27 import value of the product that rose by 22 per cent in 6M2022 was entirely due to the increase in freight rates and prices and the weakness of the euro rather than an increase in export quantity from tropical countries. In tonnage terms, imports actually declined three per cent to 211,000 tonnes during the period under review.
In 6M2022, there were particularly large increases in EU27 wood import value from Vietnam (+24%) and Indonesia (+38%). More moderate gains were made in import value from India (+2%), Malaysia (+8%), Thailand (+7%) and the Philippines (+36%).
On tropical sawnwood, the ITTO report said after two slow years during the global pandemic, EU27 imports of tropical sawnwood have recovered ground this year. In 6M2022, imports of 382,000 tonnes were 27 per cent higher than 6M2021 and 31 per cent more than 6M2020. EU27 imports from Malaysia jumped 15 per cent to 30,000 tonnes in 6M2022 from a year ago while imports from all the largest tropical suppliers like Cameroon, Brazil, Gabon and Congo all increased by between 26 per cent to 32 per cent respectively.
Unlike sawnwood, EU27 imports of tropical mouldings/decking were quite slow in 6M2022, mainly due to supply shortages rather than limited demand. Imports of 101,300 tonnes in 6M2022 were at the same level as 6M2021. Imports from Malaysia grew eight per cent to 4,100 tonnes but imports from the two largest supply countries — Indonesia and Brazil — fell nine per cent to 31,300 tonnes and four per cent to 40,100 tonnes respectively.
In 6M2022, EU27 imported 24 per cent more tropical veneer to 78,500 tonnes, including 30 per cent more to 42,900 tonnes from the largest supplier Gabon.
EU27 tropical plywood imports of 67,600 tonnes in 6M2022 were 23 per cent higher than 6M2021. Imports from Indonesia grew 19 per cent to 21,900 tonnes and Vietnam rose 44 per cent to 4,200 tonnes. But the bloc’s imports of tropical hardwood faced plywood from China were down by 36 per cent to 7,500 tonnes and Malaysia plunged by 64 per cent to just 800 tonnes.
But Malaysia’s exports of tropical flooring to EU27 expanded by 19 per cent to 6,500 tonnes during the same period of comparison. EU27 also imported 41 per cent more of the product from Indonesia to 3,200 tonnes.
“The dollar value of EU27 imports of other joinery products from tropical countries — which mainly comprise laminated window scantlings, kitchen tops and wood doors — increased 49% to US$155m in the first six months of 2022. Import value increased 38% to US$71m from Indonesia, 49% to US$45m from Malaysia and 45% to US$15m from Vietnam.
“Unlike for furniture, the rise in import value for joinery this year was not driven entirely by rising prices but was also indicative of an increase in import quantity. In quantity terms, the EU27 imported 58,300 tonnes of tropical joinery products in the first six months of this year, 35% more than the same period last year,” added the ITTO report.
