Europe faces severe shortage of oak

Europe’s severe shortage of veneer grade oak logs have continued into 2016 driven by intense demand from barrel manufacturers and buyers in Asia. A weaker Euro in 2015 also encouraged more focus on European oak, increasing the costs of imported logs while also making European oak more attractive to mills outside Europe. Manufacturers of mass produced veneers for veneered panels and furniture suffered the greatest.

Furthermore Ukraine passed a law last April, banning all exports of unprocessed timber for 10 years with effect from November 1. (Pine is banned from 1 January 2017 onwards). This had an immediate impact to reduce EU imports of hardwood logs, particularly oak, from Ukraine. EU imports of Ukrainian oak logs were only 29,000 cubic metres, down from 82,000 cubic metres the previous year and figures closer to 200,000 cubic metres prior to the economic crises.

While there was pressure on European oak supplies in 2015, the same cannot be said for other European hardwood species. Under-utilisation of beech remains a significant problem in Europe, while markets for other more specialised species have come under intense pressure from substitute materials. For example, large furniture manufacturers would only use ash veneers if they remain cost-competitive compared to artificial heavily structured surfaces.

EU exports of veneer were also affected, declining 4% from 155,000 cubic metres in 2014 to 149,000 cubic metres in 2015, particularly due to a downturn in sales to Turkey, Morocco, Russia, and China. Recent market reports suggest this trend has continued into 2016.