The take-up of the UK’s coniferous plywood duty free quota is the slowest its been for at least five years, reflecting poor market demand and related changes in sourcing patterns.
In most years recently, the 650,000m³ all-softwood plywood quota has been exhausted by May. The Timber Trade Federation’s trade spokesman Nick Llewellin reported last week that there was still over 29,000m³ left.
“We do expect that to go in the next week, as historically the graph always dips when there’s under 30,000m³ with companies buying to make sure they don’t miss out,” he said. “But this has been the slowest [take-up] of quota material that I’ve seen – it is unprecedented.”
The UK recession, he said, was seen as the main factor behind the quota slow-down. But also playing a part may have been a downturn in supplies from Finland, due to manufacturers’ overall production cut-backs. This might have led to importers switching to Chilean material, which is always duty-free so outside the quota.
International Plywood managing director Ian Attwood agreed that the fact that the market “is buying less plywood overall” was the main reason for the slow quota take-up.
“But we may also have seen more people buying Chinese poplar-cored plywood on price,” he said. “Even though it’s charged at 7% duty, it’s still been cheaper than Brazilian at 0% in the quota.”
