At this year's International Hardwood Conference in Lyon, Maria Kiefer-Polz, President of the Hardwood section, presented the point of view of European hardwood producers. The EOS Hardwood members expect a sawnwood production decline of at least 3% this year following a double-digit increase in 2021. After a good 2021 and a bright first half of the year 2022, demand has slowed over the last few months and production has adapted to weakening sales, both in home European markets and in overseas markets.

The situation at present is quite challenging with high energy prices taking a toll on the industry, particularly in the more energy-intensive beech sector. Hampered by high inflation and increasing mortgage rates, demand from European consumers is now much weaker. Stocks at sawmills are high and many producers expect a difficult few months ahead. Lack of labour is also reported by many countries.

According to Ms. Kiefer-Polz, this challenging situation is compounded for European sawmills by increasing export of oak logs, particularly to China. Exports of European oak logs to China have been increasing for many years and that China’s appetite for European oak sawlogs continues to grow. This is particularly the case now that Russia has implemented a log export ban, increasing China’s reliance on imports from Europe.

Of China’s total imports of oak logs of 1.35M cu.m in 2021, 52% derived from the EU. China’s imports of oak logs from the EU increased from 561,000 cu.m in 2020 to 702,000 cu.m in 2021. Imports from EU in the first nine of this year were 689,000 cu.m, a 30% increase on the same period in 2021. So far this year, over two thirds of total Chinese imports of oak logs have been sourced from the EU.

Ms. Kiefer-Polz suggested that the current level of oak log exports from Europe is unsustainable. As a result EOS together with the European Furniture Confederation (EFIC), the European Panel Federation (EPF), the Italian umbrella association Federlegno , and the European Parquet Federation (FEP) have joined forces to form a coalition with the advice of a legal study to consider options to reduce oak log exports.

The coalition is working with DG Trade of the European Commission. However, according to Ms. Kiefer-Polz the EC is reluctant to put in place any formal trade restrictions for several reasons. First, there is concern about a risk of retaliation as China could impose measures in response to such action by the EU. Second, the EU has itself challenged at the WTO and in bilateral discussions log export bans introduced by many neighbouring countries. If the EU put in place a similar log export ban, that would be inconsistent with its own actions on this issue.

DG Trade has also pointed out that the rise in European log exports is a market outcome that, while bad for the European woodworking industry, is good for forest owners. By selling into a large global market, European forest owners achieve better prices for their logs. For these various reasons, EC DG Trade are advising the European woodworking sector to negotiate and find solutions locally with forest owners, according to Ms. Kiefer-Polz.