Tropical trials and tactics

The business has firstly been hit by the recession, especially the EU-wide construction slump. According to the International Tropical Timber Organisation in our special report this week, this led to a further 30% drop in EU tropical timber imports in 2012.

Latest Timber Trade Federation statistics also show the contraction in the UK continuing into 2013. In the first five months they report total hardwood imports down 16.3% year on year, and tropical imports 29% lower.

And UK importers are not expecting much imminent comfort from the budding building recovery, with hardwood generally the last timber to benefit from an upturn, they say.

By general consensus, the tropical sector has also faced the biggest challenge coming to terms with the EU Timber Regulation (EUTR). The often complex supply chains and lower levels of forestry governance in tropical countries clearly make satisfying EUTR due diligence illegality risk assessment tougher. So, it was little surprise that the recent BBC Panorama probe into alleged EUTR offences at a French importer focused on tropical timber.

This week we also report investigations into suspected breaches of the regulation in Germany. Here the logs are wenge.

These cases also highlight that the tropical trade faces additional EUTR scrutiny from the media and environmental NGOs. In both instances, Greenpeace first raised the alarm.

The ITTO says fears of this sort of exposure may understandably be leading to some avoiding tropical sources without further ado. At the latest Chatham House Illegal Logging Update, TTF head of sustainability Anand Punja said that the due diligence process itself had also led to some tropical suppliers being weeded out by importers. Although he stressed too that the trade's primary goal is to work with suppliers to raise legality levels and avoid their exclusion from the EU.

But despite the challenges, there are also major initiatives being developed and opportunities explored for tropical timber which should help it claw back EU market share and ensure end users continue to benefit from its unique aesthetic and performance qualities - and in so doing incentivise suppliers to improve forest management.

Individual EU importers maintain they are working closely with suppliers to coach them through the EUTR due diligence process.

Both they and industry/NGO projects are also focused on developing markets for lesserknown tropical species. Potentially these can increase supplies of legally and sustainably verified timber and reduce growing global demand pressure on more popular species.

Also evolving is the EU Forest Law Enforcement, Governance & Trade Voluntary Partnership Agreement (FLEGT VPA) scheme. This entails supplier countries setting up legality assurance systems, in return for which they can supply FLEGT-licensed timber that will bypass the EUTR due diligence process.

FLEGT does raise sceptical trade eyebrows as, after 10 years in development, no VPAs are finally in place. But, in an article in the next TTJ, those involved say the initiative is making progress. A total of 25 countries (all tropical) are now in the VPA process, and the first licensed timber should ship next year. In the meantime, suppliers have already made major legality assurance strides under the initiative which should in themselves boost tropical timber market acceptance. And, as our vox pop of leading UK timber providers and buyers shows, they still want to sell and use it.