Tropical Timber Markets in the European Union

The European Union is a supranational jurisdiction and common market, with a vast and diverse landscape of almost 4.5 million square kilometers, which is less than half the size of the United States. In terms of territory, the largest country in the European Union is France, with more than 640.000 square kilometers. With a total population of little over 515 million inhabitants, if the European Union were a country, it would be the third largest in the world after China and India. However, the European Union is made up of 28 nations, still counting the United Kingdom, the most populous of which is Germany with some 81 million citizens. Currently, the aggregate GDP of the European Union is approximately US$20 trillion (PPP) and, as a whole, it has experienced positive economic growth upwards of 1.5% in recent years.

Tropical Timber Markets in the European Union

Likewise, Europe is a major market for tropical timber and its derivate products, such as doors and wooden furniture. During 2015, the import of tropical timber into Europe increased 7%. Meanwhile, that same year, the consumption and processing of tropical timber in Europe increased by 9% and the re-export value of timber products increased by 5%. However, this does not mean that the European market is without challenges for international tropical timber exporters and product traders. For instance, due to increased competition from other wood products and timber sources, the share of flooring panels that are made from alternative woods and laminated with a top-layer of high-quality timber has increased in recent years.

More specifically, in 2013, the European Union imported a total of €6.6 billion worth of tropical timber, which subsequently increased to €6.83 billion in 2014 and €7.31 billion in 2015. Similarly, the European Union’s export of tropical wood and derivate products has also increased from €3.84 billion in 2013 and €4.01 billion in 2014 to €4.24 billion in 2015. Meanwhile, the consumption and processing of tropical timber in the European Union has increased from €2.75 billion in 2013 to €2.8 billion in 2014 and €3.1 billion in 2015. Moreover, within the European Union’s tropical timber trade, Belgium and the Netherlands are key countries for the import, processing, and even re-export of wood and derivate products.

Simultaneously, as of 2013, the European Union Timber Regulation (EUTR) has come into effect. This common framework of legislation seeks to strengthen Europe’s social and environmental requirements for the import of wood. Furthermore, the EUTR benefits timber traders with short and certified supply chains between the tropical origin of the wood and Europe. Additionally, environmental and emerging market considerations are key to the tropical timber trade, given that there is an ongoing depletion of tropical hardwood reserves. Likewise, emerging markets themselves, notably Latin America and Asia, are also increasing their regional demand for tropical timber, which is driving global demand and pricing.

(Read more about Agribusiness and Grain Production in Argentina)