FLEGT VPA Partners in EU Timber Trade 2019
Sarah Storck, Rupert Oliver
Steven Johnson, Mike Jeffree
This latest IMM Annual Report, “FLEGT VPA Partners in EU Timber Trade 2019” shows EU import value of timber and timber products1 from Indonesia, the only FLEGT licensing country, increased 11% from US$1.24 billion in 2018 to US$1.38 billion in 2019.
This latest IMM Annual Report, “FLEGT VPA Partners in EU Timber Trade 2019” shows EU import value of timber and timber products1 from Indonesia, the only FLEGT licensing country, increased 11% from US$1.24 billion in 2018 to US$1.38 billion in 2019. This followed a 6% gain between 2017 and 2018. In quantity terms, EU imports from Indonesia increased 14% from 676,000 tonnes in 2018 to 769,000 tonnes in 2019, after falling 6% in 2018.
EU import growth from Indonesia in 2019 was dominated by wood furniture, which rose 18% to US$411 million, and paper products, which also increased sharply, by 31% to US$379 million. On the other hand, the value of EU imports of wood (HS 44) products from Indonesia decreased 3% from US$604 million in 2018 to US$588 million in 2019 losing some of the 9% gain made in 2018. Imports of wood pulp from Indonesia, always limited, were close to zero in both 2018 and 2019.
The rise in EU imports of FLEGT-licensed wood products from Indonesia coincides with a wider recovery in EU demand for wood products generally. Activity in key EU wood end-use sectors, such as construction and furniture, bottomed out in 2013 and then recovered at a slow, but relatively consistent rate until 2019. China, Russia and other countries in the Commonwealth of Independent States (CIS) region remained the dominant partners in EU import trade, although some tropical countries, particularly Indonesia, but also including Viet Nam, India and Brazil, began to make new inroads in the EU market, most notably in the furniture sector.
The total value of EU imports of wood products was US$19.3 billion in 2019, 3% less than the previous year.
However due to weakening of the euro against the dollar, there was a 3% increase in euro import value, to €17.3 billion. Import value in 2019, reported in euro terms, was the highest level since 2008. Import quantity declined 2.5% to 26.0 million tonnes in 2019.
In 2019, China maintained its position as the largest external supplier of wood products to the EU. The total value of wood product imports from China (excluding those identified as composed of tropical hardwoods) increased 3% from US$6.12 billion in 2018 to US$6.29 billion in 2019, mainly due to a partial recovery in imports of Chinese furniture and to a lesser extent joinery products and plywood. By contrast, after several years of rapid growth, EU imports of wood products from CIS countries fell 7% from US$4.56 billion in 2018 to US$4.25 billion in 2019. The share of CIS countries in total EU imports declined from 23.3% in 2018 to 22.0% in 2019. EU imports of wood products from North America declined 11% from US$1.15 billion in 2018 to US$1.02 billion in 2019. The region’s share of total EU imports of wood products fell from 5.9% to 5.3% during this period.
The total value of EU imports of tropical wood products (including direct imports and imports via third countries such as China)2 increased 1% in real terms to US$4.4 billion in 2019, following a 6% increase in 2018 (Figure S3). The increase in the total value of EU tropical wood product imports in 2019 was driven mainly by wood furniture with other smaller gains in imports of tropical sawnwood, ‘other’ (i.e. non-flooring) joinery, and other processed wood products. These gains offset a decline in imports of tropical panels/veneers, flooring and logs.
Tropical wood products’ share in total EU wood imports increased slightly, from 21.9% in 2018 to 22.8% in 2019, with countries engaged in the VPA process accounting for 76.1% of the total, down slightly from 76.7% the year before.
Summarising EU wood products imports from VPA partner countries other than Indonesia, none of which were issuing FLEGT Licences in 2019:
- The value of EU imports of wood products from the five African VPA implementing countries – Cameroon, Central African Republic (CAR), Republic of the Congo (RoC), Ghana, and Liberia – increased 3% to US$453 million in 2019 after rising 14% in 2018.
- The value of EU imports of wood products from Viet Nam, the only Asian VPA implementing country, increased 4% to US$976 million in 2019 after rising 5% in 2018.
- EU import value of wood products from Gabon, the Democratic Republic of the Congo, Côte d’Ivoire, the three VPA negotiating countries in Africa, declined 5.9% to US$283 million in 2019, following a rise of 1.3% in 2018.
- EU import value of wood products from Thailand, Lao PDR, and Malaysia, the three VPA negotiating countries in Asia, fell 3.7% to US$677 million in 2019.
- The value of EU imports of wood products from Guyana and Honduras, the two VPA negotiating countries in Latin America, fell 6%, to US$5 million in 2019, following a 13% increase in value in 2018.
EU imports of tropical wood products from non-VPA countries increased 5% to US$1.05 billion in 2019, building on a 17% gain in 2018. The increase was driven mainly by tropical hardwood plywood imported from China, tropical hardwood sawnwood and mouldings imported from Brazil, and wood furniture imported from India.
IMM surveys in 2019 flagged up that trade in VPA partner wood products – just like trade in many other commodities – was again facing an increasingly uncertain economic environment, both in the EU and globally. According to the EU Winter 2020 Economic Forecast published on 13 February 2020, GDP growth in the EU27 slipped to 1.5% in 2019, down from 2.1% in 2018. According to the UK Office of National Statistics, the UK economy grew by 1.4% in 2019, only marginally higher than the 1.3% rate in 2018, and recorded zero growth in the last quarter of the year.