Guest Column

European Union Aims to Increase Softwood Log Imports from U.S. in 2017

By Eugene Gerden

The European Union plans to significantly increase the volume of imports of wood and wood products from the U.S. during the next several years, according to recent statements by an official spokesman of the European Commission.

That will be mainly due to the ever-growing volumes of housing construction in the EU and the early confirmed plans of the Union to derive up to 20 percent of its energy needs from renewables by 2020.

To date, the EU has been one of the largest suppliers of softwood lumber to the U.S., which is reflected by statistics that show the U.S. significantly increased its imports of European softwood lumber in 2015. The volume was up by 67 percent, compared to 2014, while the value of exports increased by 70 percent (116.9 million EUR). However these figures will significantly decline this year, due to a significant growth of the demand for softwood within the EU.

EU Challenges

In recent years, wood production in the EU has faced serious challenges, which were reflected in the tightening of the local legislation in the field of forestry and the introduction of a complete ban on the cutting of old growth and wetland forests within the territory of the European Union.

This has posed the threat of a lumber shortage in the EU in the coming years and forced the European Commission to activate negotiations with potential suppliers.

As part of these plans, negotiations have started with the U.S. government and the largest U.S. lumber producers, regarding the possibility of a significant increase of their supplies to the EU.

According to European media reports, a particular interest of European customers is related to the supplies of softwood lumber and logs from the U.S.

Housing Industry Plays a Role

The growth of the European demand is driven by the ongoing recovery of the housing industry in the EU, which has been stagnant since 2012. The decline in housing construction in the European Union resulted in a significant reduction in the consumption of softwood lumber within the territory.

According to statistics recently published by the European Commission, the consumption of softwood lumber in the EU has declined by almost 35 percent since 2010; however, there is a possibility that the situation will start to improve in the coming months.

Canadian and Chinese Markets

Prior to 2014-2015, a significant part of the EU annual demand in lumber was met by the exports from Canada; however, due to re-orientation of the Canadian producers to Asian markets in recent years, the EU has started to pay more attention to the supplies from the U.S.

In recent years, China has become one of the largest destinations for U.S. exports of softwood logs; however, according to predictions by analysts of the Russian Association of Wood Producers, the EU may take the lead next year.

At present the annual value of exports of U.S. softwood logs to China is estimated at about $1 billion, and there is a possibility that part of this volume may be re-oriented to the EU by the beginning of next year, as the Europeans are ready to pay more.

Due to all these factors, the forecast is that the demand for U.S. softwood lumber will continue to grow in the EU, with the biggest increase expected in the UK and Germany. According to predictions by analysts of the Russian Association of Wood Producers, the UK economy will be actively recovering from the consequences of BREXIT (British exit from European Union) in 2017, which will contribute to the increase of housing construction volume in the country.

Eugene Gerden is a forestry freelance writer working out of Russia.