Suppliers of forest products in Europe and North America are finding life very difficult at the moment with demand down. The products themselves remain high quality and there are no cheaper far eastern alternatives flooding the market, so why is this sector of the industry waining?
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Brazil has for a long time sort to expand due to the flat lining of its domestic market. Although new markets were identified exports were held back by the strength of the US dollar, but with the dollar weakening over the past year Brazilian exporters have enjoyed new opportunities.
September has brought sorry news for Brazil’s wood product exporters. Compared with the September 2014 figures for all parts of the market with the exception of tropical plywood, paper and pulp have shown a marked reduction from last year.
Tropical sawn wood and pine plywood have suffered the most as importers from not only the Americas but also Europe and Asia have seeming turned their backs of Brazilian wood.
Central and West African mills and producers are at this moment heavily reliant on the European market to help them maintain stable pricing. At this point Europe is re-engaging with its love of tropical hardwood which is reignited by greater traceability.
After a period where European joinery ie doors and windows ( but not flooring), was suffering from low levels of demand it is of some comfort to report that during 2014 production increased albeit by a small percentage and stabilised by the end of the year.
As an industry we are aware that purchasers and consumers in Europe and the Americas are concerned about the sustainability of forests throughout the world and the legality of the wood that is harvested. It is a fact of life that the developed world has a growing consciousness of environmental issues and whereas as little as ten years ago this was dismissed as ‘hippy crack pot ideals’ today it is mainstream.
The old adage ‘When America sneezes the world catches a cold’ needs to be put into a new twenty first century context. So how about ‘When China coughs a fever breaks on the world’s brow.’ If suppliers rely too much on a particular customer, in this case China, and customer demand goes down then it is unsurprising that suppliers and exporters will suffer.
As reported last week one of the good news stories is the rise of tropical hardwood imports into the EU. It might be the case that with the drive by the market to show end users that the wood and wood products they are buying comes from sustainable and traceable sources the ‘love affair’ with tropical hardwood by Europe has been ignited again.
After reporting on poor or negative sales figures it is good to be able to talk about success. The success in question is the rising demand and therefore rising imports in the European Union of tropical wood products. The heartening aspect about this is that is a continuing trend that started in the third quarter of 2014.
What is good for one part of an economy is invariable bad for another.
Take Switzerland for example: the Swiss Franc is very strong, good news for the importer but not if you are trying to expand business into the euro zone. Your goods, in our case timber and wood products, will just be too expensive. Another blow to the Swiss market has been the slowing of demand from China due to their economic problems.