UK hardwood imports slow dramatically as recession looms

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ITTO/Fordaq
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UK imports of hardwood products were rising strongly both in volume and value terms during the second half of 2021 and first half of this year as importers were building stocks on a rising market.

However, in the third quarter this year the market has changed dramatically as import prices have fallen and UK importers are sitting on a lot of wood bought earlier at higher prices. This has occurred just at a time when consumption has weakened as the UK heads into recession and the GBP has fallen to the weakest ever level against the USD and is also declining against the EUR.

Reports from UK hardwood importers suggest that trade has slowed dramatically this month with little prospect of any significant improvement for months ahead. A change of economic policy following installation of a new Prime Minister in the first week of September, including dramatic, and largely unfunded, cuts in income tax in a high-risk effort to boost short-term economic growth has done little to boost confidence.

Both the volume and value of imports increased sharply in the two years following the lows of the first COVID lockdown in June 2020 to reach well above the pre-COVID level in the first half of this year.

Monthly import volume of sawn hardwood was averaging over 35,000 cubic meters in the second quarter of this year compared to the long-term pre-COVID average of around 28,000 cubic meters.

In terms of value, the increase in UK sawn hardwood imports in the period to end June this year was even greater, from around US$28 million per month preCOVID to over US$40 million in the second quarter of this year. Average unit value of sawn hardwood imported into the UK was around US$1150 per cubic meter in the second quarter of this year, compared to around US$1000 per cubic meter pre-COVID. Due to the weakness of the of the GBP, this rise in US$ values is felt even more acutely by UK importers.

While there was a significant increase in UK imports of tropical sawnwood in the first quarter of this year, particularly from Cameroon and Malaysia, tropical wood’s overall share of UK sawn hardwood imports has been sliding in the last two years. During this period share has principally been lost to European hardwoods imported mainly from France and Italy.

The overall trend in UK imports of hardwood plywood has been similar, with both volume and value rebounding dramatically after June 2020 to well above the pre-COVID level.

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