Impact of COVID-19 on the EU tropical wood market

September 16, 2020 Latest Trends / Market Analysis / Forestry / Sawmilling / Africa / Asia & Middle East / Europe / South AmericaImpact of COVID-19 on the EU tropical wood market

The impact of COVID-19 on imports of tropical wood and wood furniture on individual EU27 countries has varied widely, dependent on underlying economic and trade trends before the onset of the pandemic, the differing level of each country’s exposure to the pandemic, and variation in the timing and scope of the policy response.

Due to the integrated nature of the EU market, for those countries like Belgium and the Netherlands which distribute a significant proportion of products to other EU countries, the trends are not necessarily driven by the domestic market situation.

The Netherlands is currently the largest destination for tropical wood and wood furniture imports. Imports into the country were less affected than most other major destinations during the lockdown period.

The Dutch government won plaudits earlier in the pandemic for a so-called “intelligent lockdown” strategy that relied on people abiding by social-distancing measures while keeping large parts of the economy open.

Netherlands imports of tropical wood and wood furniture were down 11% in the second quarter of this year compared to the average for the same period in the previous 5 years. In total, Netherlands imports of tropical wood and wood furniture were US$299 million in the first half of 2020, 21% less than the same period in 2019.

This is a large decline, but it follows a particularly buoyant year for tropical wood imports in the Netherlands in 2019.

Particularly sharp fall in French imports in May

France imports of tropical wood and wood furniture started the year quite strongly before falling very sharply in May. In June there were signs of a robust rebound. France’s lockdown was imposed on 17 March, but restrictions began to ease from 11 May.

Overall, France imports of tropical wood and wood furniture were down 19% in the second quarter of this year compared to the average for the same period in the previous 5 years. In total, France imports of tropical wood and wood furniture were US$290 million in the first half of 2020, 15% less than the same period in 2019.

Signs of weakness in the German economy contributed to slowing German imports of tropical wood and wood furniture in 2019. A partial recovery in trade in the opening weeks of 2020 was halted with the onset of the pandemic.

German imports of tropical wood and wood furniture fell very sharply in May and were yet to show any real recovery in June. In total, German imports of these products were down 27% in the second quarter of this year compared to the average for the same period in the previous 5 years.

For the first half of 2020, German imports of tropical wood and wood furniture were US$234 million, 20% less than the same period in 2019.

This is despite Germany managing to keep the number of corona cases relatively low compared to many European neighbours and the easing of lockdown measures since April.

Belgium was hit particularly hard early in the pandemic, encouraging the government to introduce tougher restrictions than many of its neighbours. Nevertheless, trade has continued to flow and, in terms of tropical wood and wood furniture imports, Belgium has seen less of a downturn than most of its neighbours.

Belgium imports of tropical wood and wood furniture products were down 18% in the second quarter of this year compared to the average for the same period in the previous 5 years. In total, Belgium imports of tropical wood and wood furniture were US$213 million in the first half of 2020, 16% less than the same period in 2019.

Like Belgium, Italy was hit early and hard by the pandemic leading to imposition of a tough national lockdown starting on 7 March. The three-month lockdown took a heavy toll on the economy. The Italian government forecasts that GDP will contract 8% in 2020, while analysts see a 10% decline. Italy’s imports of tropical wood and wood furniture fell sharply in May and continued to slide in June.

Imports were down 27% in the second quarter of this year compared to the average for the same period in the previous 5 years. In total, Italy’s imports of tropical wood and wood furniture were US$117 million in the first half of 2020, 16% less than the same period in 2019.

Spain is another European country hit particularly hard by the pandemic. Spain started easing the lockdown, one of the strictest in Europe, in phases from 4 May. Spain’s imports of tropical wood and wood furniture fell steeply in May and this trend continued in June.

Overall, Spain’s imports of tropical wood and wood furniture were down 30% in the second quarter of this year compared to the average for the same period in the previous 5 years. In total, Spain’s imports of tropical wood and wood furniture were US$80 million in the first half of 2020, 16% less than the same period in 2019.

Denmark is unusual for experiencing a rise in tropical wood and wood furniture imports this year, despite the pandemic. In total, Denmark’s imports of tropical wood and wood furniture were US$63 million in the first half of 2020, 2% more than the same period in 2019.

Imports remained strong even as much of the rest of Europe went into lockdown. Danish imports of tropical wood and wood furniture products were up 12% in the second quarter of this year compared to the average for the same period in the previous 5 years.

Denmark’s imports from Vietnam, the largest supplier, increased 10% in the first 6 months of this year, while imports from Ecuador were up 50%. Ecuador overtook Brazil and Indonesia to become Denmark’s second largest tropical wood supplier in the first half of 2020. Denmark is a primary location for manufacture of wind turbines in the EU creating demand for Ecuadorian balsa wood.

Denmark was one of the first countries in Europe to emerge from lockdown. According to a recent international survey by the Pew research Centre, 95% of people in Denmark believe their government did a good job in handling the crisis. That is the highest rating for any country in the analysis, which encompassed 14 advanced economies.

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