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July 22, 2019

Slowing pace of EU wood furniture imports

Slowing pace of EU wood furniture imports

The generally slow development of the EU wood furniture market in 2018 is also apparent in the import data. After rising 7% in 2017, the value of EU imports of wood furniture from non-EU countries fell 1% to €6.21 billion in 2018.

Imports from China, by far the largest external supplier, fell 4% to €3.1 billion in 2018 and imports from tropical countries fell 0.5% to €1.69 billion. However, there was a 7% rise in import value from non-EU temperate countries, to €1.46 billion, notably Ukraine, Belarus and Turkey .

While the total value of EU wood furniture imports fell in 2018, import tonnage increased indicating a decline in the price and/or a change in the mix of products. Total import tonnage increased 5% in 2018, to 2.26 million metric tonnes (MT).

Import tonnage increased by 1% from China to 1.12 million MT, and by 4% from tropical countries to 609,000 MT. However, continuing the trend of recent years, there was a sharper increase in imports from countries bordering the EU, including Ukraine (+30% to 97,000 MT), Belarus (+22% to 85,000 MT) and Turkey (+16% to 82,000 MT).

These broad trends have continued in 2019. In the first quarter of this year compared to the same period in 2018, EU wood furniture imports from tropical countries increased by only 1% to 171,000 MT and imports from China were up 2% to 302,000 MT.

Meanwhile, imports from non-EU temperate countries increased 16% to 148,000 MT, with imports rising 35%, 23% and 16% respectively from Ukraine, Belarus and Turkey.

While China remains the largest external supplier of wood furniture to the EU, the overall decline in EU imports from China between 2015 and 2018 is notable. In recent years China’s competitiveness in the EU wood furniture market has been impeded as prices have risen on the back of growing domestic demand and new laws for pollution control pollution in China.

EU furniture importers also continue to question the variable quality of product imported from China and some have struggled to obtain the legality assurances required for EUTR conformance when dealing with complex wood supply chains in China.

Of tropical countries, Vietnam is the leading supplier of wood furniture to the EU. EU imports from Vietnam increased 6% to 233,000 MT in 2018, but were slow in the first quarter of 2019, falling back 6% compared to the same period last year, to 70,000 MT.

The trends are different in euro value terms. EU import value from Vietnam was flat in 2018, at €723 million, but increased 2% to €230 million in the first quarter of 2019.

In the EU, the Vietnamese furniture sector has gained a reputation for supply of large volume mid-range products, both for exteriors and, increasingly, for interior use.

The Vietnamese furniture industry is regarded by EU importers as technically more evolved than most other Asian producer countries and increasingly able to supply products to high European quality standards.

EU imports of wood furniture from Indonesia declined 3% in tonnage terms to 99,000 MT in 2018 but increased 2% to 27,000 MT in the first quarter of 2019 compared to the same period last year. In value terms, imports from Indonesia declined 2% to €301 million in 2018 and increased 7% to €89 million in the first quarter of 2019.

The relative lack of growth in EU furniture imports from Indonesia since the start of FLEGT licensing in November 2016 may seem disappointing, but the trend is influenced by wider stagnation in EU furniture market growth and by intense competition in the sectors targeted by Indonesian manufacturers.

Indonesia’s furniture exports to the EU are dominated by outdoor products, particularly due to relatively abundant plantation teak supplies.

However, there is now intense competition in this sector from a wide range of modified temperate wood and nonwood products which are taking share from tropical hardwoods.

Indonesia's long woodworking tradition has also meant it has gained a reputation for supply of good quality specialist hand-made furniture, a niche market in the EU where it competes most directly with India.

In 2018, EU imports of wood furniture from India increased 21% to 81,000 MT, and the rising trend continued in the first quarter of 2019 with a further increase of 10% to 23,000 MT. In value terms, EU imports from India increased 18% to €238 million in 2018, and by 15% to €66 million in the first quarter of 2019.

Imports of wood furniture from Malaysia increased 5% to 101,000 MT in 2018 and by a further 20% to 29,000 MT in the first quarter of 2019. In value terms the trend was slightly different, with imports from Malaysia falling 1% to €197 million in 2018 but recovering 19% to €57 million in the first quarter of this year.

Malaysia is supplying the EU market with high quality furniture products but a much smaller range than Vietnam with a heavy focus on rubberwood and other plantation species.

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