Record start to the year for UK tropical imports

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ITTO/Fordaq
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The import value of tropical wood and wood furniture into the UK in the opening two months of this year were at record levels. In the January to February period, import value totalled US$270 million, 47% more than the same period in 2021 when imports were also high following a strong rebound after the downturn during the first COVID lockdown in 2020.

In fact, this was by far the highest value import of tropical wood and wood furniture products into the UK in any two month period since at least before the 2008 financial crises.

The strong performance in the first three months of this year reflect both high consumption in the UK, still supported by post-COVID government stimulus, and the late arrival of delayed shipments from the previous year.

Demand has remained particularly good in housing repair, maintenance, and improvement, always a big driver of hardwood demand and the fastest growing part of the UK construction sector following the initial COVID lockdown.

Meanwhile, the availability of hardwood and furniture products from the UK's traditionally largest suppliers in Europe and the United States was very tight even before Russia's invasion of Ukraine in the last week of February, encouraging importers to look more to tropical products.

Importers also tend to thrive when prices are high and margins wide, so there has been a strong incentive to look around for supplies and build stock.

The high level of UK import value in the opening months of the year is also partly owing to high material prices and freight costs. Although hardwood product prices were declining steadily from the middle of last year to February this year, they are still very high compared to the beginning of last year. Freight rates also declined from the heights reached in the third quarter of last year but were still at a historically very high level at the end of February.

The downward trend in hardwood prices has reversed since Russia’s invasion of Ukraine. This event seriously disrupted all supplies of European and Russian hardwood products, partly because of the direct effects of sanctions against Russia, partly the immediate effects of the war on Ukrainian supply, and partly because of the large numbers of Ukrainians, who contribute a disproportionately large number of truck drivers operating in Europe, who returned home during the conflict.

The war has also driven up energy costs, filtering through into rising prices for all European manufactured products, including for wood and furniture.

According to statistics provided by the UK Department for Business, Energy & Industrial Strategy (BEIS), timber prices in the UK have been significantly affected by the war in Ukraine. The price of sawn or planed wood imported into the UK increased on average by 2.5% in March this year following five months of steady decline.

The price was also 11% more than in March 2021. The price of imported plywood also increased 2.5% in March this year and was up 28% compared to March 2021.

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