EUTR impacts demand

16 June 2014

Sheam Satkuru-Granzella, director of the Malaysian Timber Council in London, raises concerns over the EUTR’s impact on demand for tropical timber

The first few months of 2014 have seen the demand for tropical timbers slip even further in key EU markets. The biggest question is: has the EU Timber Regulation had an impact on demand for tropical timbers or is it purely down to the economic doldrums in the EU?

It is difficult to gauge but it's reasonable to say that it is probably due to a combination of both these critical factors, as well as changing consumption patterns in their EU markets.

If we focus on the EUTR, it is an unfortunate consequence of this piece of legislation that trust in sources of tropical timber, whether certified or not, has significantly decreased. We have definitely witnessed industry members on both sides of the world scrambling to make sense out of what was required of them.

This was initially incredibly discouraging for tropical countries like Malaysia, which is a major supplier of certified tropical timber products, and to others who are currently pursuing certification of their forests.

In order to overcome this problem, the Malaysian Timber Council (MTC) and several of our parallel partners have stepped up communications efforts, which is critical in order to regain the confidence and trust that we thought had been well established until two years ago.

Our industry members have been wonderfully supportive (although sometimes also disgruntled!) in taking serious steps towards complying with the requirements of the EUTR in order to maintain their market share and access to their buyers in Europe - all at additional effort and cost to each respective company. It is inaccurate to think that only the industry within the EU has struggled

with financial, administrative and human resources in facing the challenges of the EUTR. These challenges and costs have also been higher for producing industries like Malaysia.

In its communicating and marketing over the years the MTC has always endeavoured to take constructive measures to keep the industries in Europe and Malaysia fully informed of all the latest developments on the ground in both locations.

The results have been gratifying, but it has now reached a worrying stage where select buyers of all products, whether tropical or not, who used to purchase certified timber products are now opting instead for legally sourced products. The demand for certified products is reported to have decreased. Is this another consequence of the EUTR?

Legally sourced products will obviously come at a lower price compared to certified sustainable - to the peril of market share being lost to 'legal' products?

The only solution is to continue demanding the use of products that are sustainably produced and to formulate measures to stimulate the use of tropical timber products. This will be the only way to save tropical forestry from further destruction and deforestation.

Several discussions are ongoing on how this should be done and the MTC will definitely continue its efforts at promoting both sustainable and legal timber to our varying end users.

However, unfortunately, the slight improvement in the UK and German economies alone will not be enough to sustain the existence of sustainable tropical forests and timber industries worldwide. We need far more demand and consumption than these two markets, if only to ensure the continued investment into and the survival of certified tropical forests and industries alike.

Sheam Satkuru-Granzella