Plywood is one of the few tropical wood-based products that is doing well in the EU, although much of the gain has been in indirect imports from China rather than direct imports from tropical countries.
In the first half of 2017, EU imports of products faced with tropical hardwood manufactured in China increased 62 per cent to 54,300 metric tonnes, while direct imports from tropical countries rose 21 per cent to 171,100 metric tonnes.
Most of the gains in direct imports were from Indonesia, rising 29 per cent to 45,700 metric tonnes. Imports from Malaysia were stable at 34,200 metric tonnes while imports from Gabon fell 16 per cent to 8,700 metric tonnes in the first half of the year.
The figures offer mixed results, with little evidence of immediate market gains after issue of the first FLEGT licenses in Indonesia at the end of last year.
The rise in EU imports from Indonesia is encouraging and seems to confirm early anecdotal reports that some EU importers are favouring Indonesian products as it avoids the need for time-consuming and expensive due diligence assessments. However there are also reports that some plywood buyers in Europe are still avoiding Indonesian plywood because of the lack of clear information on the exact species content when orders are placed, usually a month or two before shipment.
Many Indonesian plywood mills do not know ahead of time the exact mix of logs that will be available and importers only have access to species information when the order has been shipped and the FLEGT licence issued. That conflicts with the internal procurement policies of some large corporate buyers who now require this information in advance.
Some of the larger Chinese mills are better able to meet this requirement, while also satisfying those buyers’ needs for more regular large shipments. In fact, Chinese plywood manufacturers appear to be conforming to the EUTR due diligence requirements to the satisfaction of many importers and regulators.
The rise in EU tropical plywood imports in the first half of this year was mainly driven by the UK (+29% to 82,000 MT), Belgium (+52% to 30,300 MT), and Germany (+24% to 11,000 MT). These gains offset a decline in imports in the Netherlands (-29% to 16,400 MT) and France (-20% to 10,300 MT).