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Wood Products Prices in The UK & Holland

01-15th February 2007

Report from the UK

TTF regards WWF report methodology as ¡°nonsense¡±
The UK Timber Trade Federation (TTF) regarded the WWF report ¡°Cut it Out¡± as calculating figures largely based on assumptions and making use of headline grabbing data. According to the report, after China and Japan, the UK was the world¡¯s third largest importer of illegal wood with 3.2 million m3 worth ¡ê712 million every year. The report added that more than 65% of this timber went into the construction sector and the majority of it originated from or came through Sweden, Finland, Russia, Estonia and Latvia. The WWF study focused on 17 exporting countries, assumed that 10% of each country¡¯s timber exports were illegal and that 10% of the UK¡¯s timber imports from those countries were also illegal.The report presented the following breakdown of illegal timber entering the UK: softwood sawnwood (1.7 million m3), the paper sector (800,000 m3), plywood (220,000 m3), hardwood sawnwood (170,000 m3), furniture (100,000 m3) and particleboards (15,000 m3).

In a letter to The Times, TTF chief executive, John White, said the report methodology did a ¡°disservice¡± to the UK¡¯s efforts to reduce the amount of illegal timber entering the supply chain. He said that assuming a rate of illegal timber production and assuming that percentage applies to all imports was statistical nonsense and had no place in a serious report. Mr. White added that an independent report commissioned by the TTF (see below) found that more than 50% of timber entering the UK was certified as legal and sustainable.

Over 55% of imported wood in the UK is certified
A study commissioned by UK Timber Trade Federation (TTF) concluded that 56% of wood and wood products imported into the UK in 2005 were certified. However, demand for certified timber was only 10%. The study is the first in a series of four studies. Sawmilling, Panel Production, and Harvesting Reports will follow shortly. The proportion of certified wood across different products varied considerably with certified sawn softwood imports recording a 58% market share, some 4.4 million m3. Certified hardwood imports were however much lower at 11%, although on much smaller volumes, reflecting the
diversity of supply and the relative lack of penetration of certification schemes in tropical areas. Plywood mirrored this with certified softwood plywood showing 46.5% market share and certified hardwood plywood 23.8%. Among other panel products, the figures were much higher, with certified OSB reaching nearly 100% certified status and MDF not far behind on 88%.

The Report identified the performance of the different certification schemes. FSC and PEFC dominate the certification market with 50% each in their share of certified products. However PEFC dominates the sawn softwood sector, primarily due to its success in certifying forests in Scandinavia. About 36.5% of imported certified sawn softwood is PEFC while 21.2% is FSC. FSC however has a slightly broader spread of products covered. On the other hand, FSC dominates the OSB and MDF markets. Among softwood plywood, PEFC and FSC have 28.5% and 17.0% of the market, respectively, with CSA catching another 1%. On the hardwood plywood side, FSC is slightly ahead with 8.9% of the market; PEFC has 7.9% and the MTCC 7.1%.

UK house prices still on the rise
UK house prices are still rising strongly despite recent interest rate rises according to the Halifax, the country¡¯s biggest mortgage lender. In its monthly survey they report that prices rose by 1.3% in January keeping the annual rate of house inflation at about 10%. Barratt Developments has agreed to buy house builder Wilson Bowden in a ¡ê2.2 billion deal. The combined firm will become the UK¡¯s largest house builder with a stock market value ¡ê4.3 billion. Barrett says the deal will create a market leader in ¡°geographic coverage and product offering. House builders Galliford Tey and Crest Nicholson have been chosen as preferred bidders for a redevelopment of a 133 acres hospital site in the county of Surrey, near London. Meanwhile, builders merchant Travis Perkins has bought an insulation and drywall specialist group of companies comprising five outlets.

UK manufactures had a good January according to the purchasing managers¡¯ survey. The index rose 0.8 points to 52.8. Output, new orders, exports and employment were all strong, although pressure on prices increased.

Members of Parliament support sustainable role of timber
TTJ reported that over 100 Members of Parliament have signed an Early Day Motion (EDM) supporting the sustainable role that timber can play in the construction element of the 2012 Olympic Games, which could become a showcase for the international industry.

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Abbreviations

LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source: ITTO'  Tropical Timber Market Report

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