A survey of over 130 companies in the EU+UK, including
a significant proportion of the region’s largest importers of
tropical timber products, highlights that FLEGT licensing
has helped boost market prospects for Indonesian
products. It also shows that implementation of the EU
Timber Regulation (EUTR) and associated rising
dependence on certified products has led to a narrowing in
the range of tropical companies supplying the region
overall.

But while EUTR contributed initially to the fall in share of
tropical timber products in the EU+UK market, the survey
reveals that this effect may be moderating and a significant
minority of respondents now suggest that the existence of
EUTR is helping to reduce reputational problems
surrounding trade in tropical timber.

The survey was undertaken in 2020 by the FLEGT
Independent Market Monitor (IMM), the ITTO project
supported by EU funding, and covered tropical timber
trading companies in six countries (Belgium, France,
Germany, Italy, the Netherlands and the UK) which
together account for over 90% of EU+UK timber imports
from VPA partner countries.

The 2020 survey built on earlier IMM surveys undertaken
each year between 2015 and 2019 and covered a broad
range of private sector players, including importers and
agents as well as manufacturers, retailers, wholesalers and
building contractors.

In response to a question on which country respondents
believed would be the most important supply country for
tropical timber five years from now, Indonesia received by
far the most individual votes in the 2020 survey,
overtaking all four countries identified as potentially more
important when the same question was asked in 2018
(Cameroon, Brazil, Malaysia and Congo Republic).

Indonesia received 45 out of a total of 293 votes in 2020
(survey respondents were allowed multiple answers),
compared to 38 votes for Malaysia, 36 votes for
Cameroon, and 32 votes for Brazil. Vietnam ranked only
9th in the 2020 survey, a result likely due to the fact that
most respondents are importers of HS44 wood products,
rather than furniture which dominates imports from
Vietnam.

India (3 votes) emerged for the first time as a potential key
supplier in the 2020 survey. Over the last decade, Indian
exports of wood products and especially furniture
increased substantially to a number of countries in the
EU+UK including Germany, the Netherlands, the UK and
France.

Brazil made a sharp recovery in 2020, after a drop to just
12 votes and 9th place in the ranking in 2019.

However, according to survey respondents, doubts still
persist regarding the political situation in Brazil and the
implications for timber legality and EUTR due diligence.

Several other South American countries were mentioned
as having potential to gain in importance as suppliers to
Europe, including Peru (8 votes), Bolivia (3 votes) and
Suriname (3 votes). Among South American VPA partner
countries, Guyana (3 votes) was considered to have
slightly more potential as a supplier than Honduras (1
vote) in 2020.

Surveyed companies were asked whether FLEGT
Licensing and the introduction of the EUTR has had any
direct impact on the share of tropical timber in their
overall timber imports.

Two thirds of respondents confirmed fully or partially that,
where possible, they would give preference to FLEGTlicensed
timber from Indonesia over unlicensed timber
from competing sources. The proportion of respondents
reporting small increases in Indonesian timber product
imports due to introduction of FLEGT-licensed timber
rose sharply to 28% last year; this compares to 12% in
both 2018 and 2019. A few respondents indicated that
Indonesia had gained market share from South American
and Malaysian suppliers.

Nevertheless, a significant majority (71%) of respondents
reported that FLEGT-licensing has led to “no change” in
the share of Indonesian products in their purchases, a fact
at least partly due to Indonesia supplying limited, even
negligible, volumes of some key timber products (notably
rough sawn hardwood).

The 2020 survey also showed that 60% of respondents
found that the administrative process of importing
FLEGT-licensed timber was easily understandable and
manageable, a rise from around 50% in 2019 and less than
20% in 2017 survey. The number of respondents
highlighting challenges in the FLEGT licensing procedure
stabilised at a low level in 2020, after declining sharply in
2018 and again in 2019.

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