Tropical timber imports to the EU have declined for over a decade now. The loss of market share was particularly pronounced in the period 2008-2012. Sales then stabilised up to 2016, before dipping again slightly. 

As a part of its 2018 research, IMM has been trying to identify the major drivers of this development. The 2018 survey contained a table of nine potential factors identified by IMM, which respondents were asked to sort according to relevance. These factors, plus two additional factors identified during IMM 2018 Trade Consultations are summarised in chart 1.

Chart 1: Drivers of decline

Source: IMM 2017/2018

2018 survey respondents identified “substitution by other materials” as the main factor responsible for decline in EU tropical timber imports, followed by the “economic downturn 2008-2013” and “diversion of supply to other markets” (Table 1). This latter point is closely linked to the fifth most important factor, according to the rating, which is “competition from China for material access and in markets for finished goods”.

Environmental prejudice and uncoordinated marketing (rank 4) was identified as another important driver. In terms of marketing, respondents highlighted that successful campaigns promoting local European timber had led to a loss of market share for tropical timber. At the same time, NGO campaigns and the tropical timber sector’s lack of access to end consumers would undermine efforts to promote the use of tropical timber.

The majority of both survey respondents and participants at IMM Trade Consultations assumed that the EU market for tropical timber will stagnate at the lower level it has reached for the foreseeable future. However, some opportunities for supporting recovery were seen in improved promotion of environmental credentials of tropical timber and “consistent and effective EUTR enforcement”.

Table 1: Ranking of drivers of decline

Source: IMM 2018 Trade Survey

Quotes from respondents commenting on the ranking include:

• The economic downturn had a major impact on the building industry and as result reduced demand for joinery products.
• Campaigns NGOs led against the use of tropical hardwood obviously had a very negative effect (…) If nobody in Europe or the USA wants to buy tropical hardwoods anymore and there is no more value attached to tropical forests then these will disappear. Only responsible forest management will guarantee the survival of the remaining tropical forests.
• Fashion, bureaucracy and substitutes are the biggest problem.
• Availability is the number 1 problem for us; ensuring a reliable supply.
• The economic crisis was the reason we stopped importing directly.
• Fashion trends (oak) is the key driver. Second the negative image. But also availability of supply is a key negative aspect when buying tropical timber, as well as delivery times.
• The economic downturn had a significant impact, but the prejudice concerning the environmental issues around tropical timber and the lack of a coordinated response might be the main driver.
• The increased focus on sustainability and circularity of the European timber market facilitates substitution of tropical timber by temperate, modified timber.
• Low supply of second transformation tropical hardwood products, such as finger-jointed, glued, profiled timber
• The EUTR makes Europeans very annoying and difficult customers (for tropical suppliers).
• In practice it’s a combination of these factors.

Selected quotes referring to a trend-reversal:

• I have been in the tropical timber business for more than thirty years and I am afraid the downturn in tropical timber consumption (including plywood) will not be reversed. My comments relate to North-West Europe. The situation in Southern Europe is probably very different.
• A reversal would require a complete change of mindset among decision-makers, specifiers and opinion leaders e.g. NGOs.
• Yes. Implement the FLEGT license in African countries.
• I think it is not possible to reverse the situation. Tropical wood has been replaced by other substitute materials that are not wood and that they have gained a market share that they will not lose.
• Public policies should start to support the diffusion of tropical and sustainable timber.
• Public administrations can support the use of tropical timber in outdoor furniture (urban furniture)
• Depends on customer trends and specifications. Temperate timbers have more perceived environmental credentials.
• Only if the image of tropical timber can be improved.
• The trend could reverse – if the supply was more regular, delivery times shorter, less paperwork and bureaucracy generated, and more standard qualities achieved.
• No: there is now a deep-rooted trend towards buying local which is on the increase. Furthermore, the EUTR has put off a certain number of suppliers so the level of supply has dropped.
• We are not very optimistic about our future in Africa. Delays in the refund of VAT payments make our cost price increase by 20%.
• There is a huge knowledge gap about tropical hardwood among both decision makers and specifiers (both architects and building contractors). There is also a huge loss of skills and knowledge base among craftsmen and contractors. New training modules need to be developed through Chambers of Trade and Crafts and professional training schools.
• Current market niches such as decking, window & door scantlings or glulam panels will remain.
• There needs to be more design and technical research to revive wood use in house building and renovation.

IMM also discussed the above factors with participants at all of its 2018 Trade Consultations and, at the third Consultation in Berlin, introduced a systematic ranking of factors. This ranking will be part of all future Trade Consultations. Also introduced in Berlin was a ranking of potential solutions or opportunities for the European tropical timber sector. 

The German rating of drivers of decline howed strong overlap with the 2018 trade survey. A major difference in the German rating was that the EUTR, which had not yet been included in the 2018 survey, was found to be the third most important driver of decline by the Berlin Trade Consultation. Nonetheless, participants emphasised that they were supportive of the EUTR and saw it as an opportunity for the tropical timber trade in the medium and long-term – as long as it was effectively implemented. 

This is also reflected in the subsequent rating of opportunities held in Berlin, as a part of which “a regulatory approach involving increased supply of FLEGT-licensed tropical timber linked to consistent and effective enforcement of EUTR to remove illegal wood” was ranked as the most important strategy for future recovery and growth of the EU tropical timber market. Not a single participant voted in favour of “Deregulation” i.e. abandoning the EUTR.