TTF Tropical Timber Market Webinar forecasts the sector will bounce back in 2021

TTF Tropical Timber Market Webinar forecasts the sector will bounce back in 2021

ARTICLE · BY CHRISTOPHER DEMETRIOU · 30 NOVEMBER 2020

The pandemic and worldwide lockdowns may have detrimentally affected the tropical timber market in 2020, but in 2021 the market is projected to rebound back and even above pre-pandemic levels. 

The TTF Tropical Timber Market Webinar brought together speakers from top tropical timber countries across Africa and Asia to speak to almost 100 attendees on the current market, progression on FLEGT & VPA, and next year’s COP26.

IMM Trade Analyst, Rupert Oliver, stated that since 2015 the tropical log trade has been on the decline. The pandemic has accelerated this as primary tropical wood products are down -17% (-$2.5 billion). The fall can be attributed to China as they usually account for approximately 80% of tropical logs. However, since the start of January 2020, they have imported fewer logs compared to 2019.

Going into next year, the tropical market is projected to rebound back and even above pre-pandemic levels, with the Asian market forecasted to recover the strongest in 2021.

On the ground in Indonesia, the picture was less optimistic. Budi Hermawan from PT Kayu Lapis Indonesia reported that the industry is suffering as a result of the high freight rates and prices for containers. Seasonal rain has also led to a 10% price increase per month for logs, because of the short supply.

Looking across to Africa, Eric Abberquaye from the Timber Industry Development Division of the Ghana Forestry Commission and Blandine Ouoguia from GFBC for Cameroon gave a hard picture of the current market. Eric Abberqauye stated that Q2 2020 saw a -48% drop in export volumes compared to 2019. However, Q3 2020 saw a slightly improved fall of -28% compared to the same time last year, and that there was a +5% increase in exports to the USA.

In Cameroon, production dropped -20% because of cancelled orders. Looking forward they anticipate strong future demand, driven mostly by the Asian market, particularly China.

Despite the current market picture, the panel, consisting of George White from Global Timber Forum, Mark Hogg, and Mark Rawlinson QC from Mere Plantations was buoyant that 2021 will be a super year for the tropical timber industry. COP26 will showcase the incredible progress the tropical timber market has made towards legal, sustainable timber production and more countries will edge closer to obtaining FLEGT & VPA certification, creating more jobs, and helping combat climate change.

The market might seem unstable at the moment, but this crisis has shown the tropical timber market is resilient and remains determined to produce legal and sustainable timber. And with the tropical timber market forecasted to rebound and grow above pre-pandemic levels in 2021, there should be plenty of reasons to be optimistic going forward.