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07.07.2023
ITTO has published its tropical timber market report for the second half of June 2023.
One of the main topics is the establishment of a joint working group by Indonesia, Malaysia and the EU, on supply chain traceability and transparency. A joint Indonesia/Malaysia mission met EU leaders at the end of May to discuss the EUDR. Following this meeting, agreement was reached on the creation of a joint task force to examine the situation of commodities affected by EUDR in Indonesia and Malaysia, in particular palm oil, timber, rubber, coffee and cocoa.
Other topics include :
o The sharp drop in demand for wood floor coverings in Europe. After a buoyant 2021, production and consumption of wood flooring in Europe held up better than expected in 2022, but fell sharply in the first few months of this year due to rising costs and higher interest rates. These are the main conclusions of the latest annual statistical report published on June 20, 2023 by the European Parquet Federation (FEP). While the FEP report highlights the fact that tropical woods now account for just 2% of face veneers used to manufacture parquet flooring in Europe, it also provides valuable insights into the state of the hardwood market in Europe. It highlights, for example, the enormous preference of European consumers for the "oak look". Last year, 82.1% of parquet flooring manufactured in Europe was clad in oak, up from 81.9% in 2021. Last year, ash and beech maintained their positions as the second and third most favored species, with 5.3% and 2.5% respectively.
o Improved US consumer sentiment as inflationary concerns ease. The University of Michigan's Consumer Sentiment Survey for June showed a 9% rise in overall sentiment, and an even stronger rise in expectations for the future. This spectacular rise reflects a turnaround in attitudes generated by the resolution of the debt ceiling crisis, as well as more positive feelings about slowing inflation. Opinion on their personal financial situation remained unchanged, however, as persistently high prices and spending continue to weigh on consumers. There are signs that June marked a turning point in consumers' gloomy opinion of the economic situation.
o The slowdown in the okoumé market in South Africa: demand has fallen as more and more housing projects use aluminum and plastic window frames, which are cheaper alternatives to wood. The municipality of Swartland, for example, the largest consumer of okoumé from Congo and Gabon for government housing projects, has abandoned the use of 100% okoumé to incorporate Chilean eucalyptus for certain end uses. It seems that manufacturers have solved the problem of gum pockets in eucalyptus and consider it a cost-effective and sustainable alternative to okoumé.
o A statement issued by the Malaysian Timber Certification Council (MTCC), concerning false information circulating about the Malaysian Timber Certification Scheme (MTCS), which has caused confusion among stakeholders. The MTCC stresses that no new interpretations have been introduced concerning criterion 6.11 of MTCS ST 1002:2021 Malaysian Criteria and Indicators for Sustainable Forest Management.
o In Vietnam, imports of logs and sawnwood from Africa fell in April 2023. These fell to their lowest level for many years with a volume of 41,330 m3 equivalent to US$15.85 million, down 37% in volume and 36% in value compared with March 2023 and, year-on-year, down 49% in volume and 48% in value. In the first 4 months of 2023, imports from Africa were recorded at 285,510 m3, for a value of 113.25 million US dollars, down 18% in volume and 11% in value year-on-year. The recent CITES Appendix II listing of the entire African population of species belonging to three genera (Pterocarpus spp. (padouk), Afzelia spp. (mahogany/pachy/doussie) and Khaya spp. (Acajen)) has had a significant impact on the import and use of African wood in Vietnam: Africa being Vietnam's main supplier of tropical wood and padouk being the main wood imported from Africa. Many villages in the wood industry, specializing in the manufacture of traditional furniture for the domestic market, are suffering from a shortage of raw materials.
o The impact of Argentina's new import control measures on Brazilian exports. In order to better control supply chains and monitor foreign trade operations, the Argentine government introduced the "Import System of the Republic of Argentina" (SIRA), which came into force in October 2022. The new system restricts the granting of non-automatic licenses (licenças não automáticas - LNA). A non-automatic license is an instrument used by countries to control the entry of products into their territory. Brazilian exporters can only ship products if they obtain a license directly from the Argentine government. According to a survey of 252 Brazilian exporters conducted by the National Confederation of Industry (CNI), 77% of companies indicated that the creation of the SIRA had had a negative impact on export operations. Of these, 84% reported a reduction in the value of exports to Argentina.
o China's adoption, in March 2023, of a national program on green building materials for rural areas. This project was launched at a forum held in Suqian City, Jiangsu Province (pilot area) on the development of the green building materials industry. At the same forum, 70 Jiangsu companies were awarded the title of "green building materials promotion enterprise", and 24 companies signed project agreements.
o The publication of the "National Forest Management Work Plan Code 2023" by India's Ministry of Environment, Forests and Climate Change, which provides for a new approach to data reporting. The new Code 2023 requires state forest departments to report their data to a centralized national database. This could make forestry data available much more quickly than at present.
Download ITTO Report 15 - June 30, 2023
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