Fears over EUTR’s effect on European plywood market

Before the EUTR was introduced in March 2013, many were worried about how it could impact particularly heavily on the plywood sector in europe, but these fears now appear to be unseen. The EUTR has made it illegal to place unlawfully harvested timber and wood products on the EU market. It affects all of those that first place these goods on the market and traders further down the supply chain who import plywood from China and other countries.

Since its inauguration, there has been relative stability between the different available types of plywood, according to timer network Fordaq. Those who showed concern over the EUTR believed there would be difficulties in obtaining assurances of legality in the complex supply chains that prevail in China’s plywood sector, which would have led to a loss of market share.

The biggest beneficiaries of the regulation were thought to be the domestic suppliers and tropical countries with simpler supply chains, as well as regions where far-reaching steps were being taken to implement third-party certification or legality verification systems.

However, EU plywood imports from tropical countries have stabilised over the last 18 months in part due to these efforts in combination with the EUTR.

Plywood exported into the EU from Malaysia is mostly certified to the Malaysian Timber Certification Scheme, while imports from Indonesia are validated by the Sistem Verifikasi Legalitas Kayu (Timber Legality Verification System) and those from Gabon are primarily Forest Stewardship Council certified.

At the same time, import data from the EU suggests that a significant number of Chinese plywood suppliers have been able to adapt to the new demands of the EUTR, either by swapping to locally produced face veneers or by sourcing tropical veneers from certified legal sources. This indicates that measures created by EU countries to implement the regulation have been sufficiently rigorous enough the change to behaviour of suppliers.

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The EUTR Competent Authorities and EU trade associations claim that there have been far-reaching measures to roll out the policy in most of the largest plywood importing countries, particularly in the UK and Germany. According to Fordaq, anecdotal reports from the European timber trade press also highlight the growing emphasis on legality verification in the EU plywood sector and how it is effecting supply chains.

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