Tropical hardwood market overview 2004 to 2014

Rupert Oliver,

ITTO/EC Independent Market Monitor for the VPA process

FLEGT Independent Market Monitoring

• Required in the text of some Voluntary Partnership Agreements (VPAs)

• Market impact of Timber Legality Assurance Systems

• Hosted by International Tropical Timber Organisation (ITTO)

• Funded by EC through DG International Cooperation and Development

• Budget: €4.4 million over 5 years (2014-2018)

2

3

FLEGT Voluntary Partnership Agreements

Source: ITTO IMM analysis of FAO 2010 Forest Resource Assessment

IMM Baseline Report

• Considers VPA partner role in global timber trade

• Reviews competitiveness of VPA partner timber in EU market

• Share in different market segments (logs, sawn, decking, plywood, flooring, furniture etc.)

• Systematic analysis of factors impacting on EU trade in timber from VPA countries

Sample output: “cleaned” data for 440799 “other sawn hardwood”

IMM-EFI “Reproducible analysis and on-line database of world trade flows”

6Source: ITTO IMM analysis of Global Trade Atlas & UN COMTRADE

7Source: ITTO IMM analysis of Global Trade Atlas & UN COMTRADE

8Source: IMM analysis of Global Trade Atlas

Reported Source of Timber Consumed by Large Industry in Indonesia between 1991 and 2014

Source: Forest Trends analysis of Indonesia MoF data

9Source: ITTO IMM analysis of Global Trade Atlas & UN COMTRADE

10Source: ITTO IMM analysis of Eurostat COMEXT

Barriers 2004-14

Barriers 2015-24

• Financial crises & fall out

• Product innovation in non-wood materials

• Shift in global economic activity to emerging markets

• Less availability of ‘big name’ tropical hardwoods

• Freight & transport factors

• EU production of panels & new surfacing technologies

• More hardwoods from Europe and N. America

• Global plantation expansion

• Wood modification

• Prefabrication in construction

• Exchange rate movements

Barriers 2004-14

Opportunities 2015-24

• Interior design trends

• Forest certification

• Environmental campaigns

• Marketing initiatives

• Architect and structural engineer’s timber knowledge

• Technical performance standards & CE Marking

• Green building

• Public procurement

• Corporate Social Responsibility

Neutral 2004-14

Opportunities 2015-24

• EU Timber Regulation (EUTR)

• FLEGT VPA process

• GSP and timber import tariffs

• Climate change/carbon footprint

• Hardwood use for higher value structural applications

IMM Baseline Report Systematic Review of Factors Impacting on EU market for timber from VPA countries