The storms and floods affecting the UK are likely to compound the pressure on the forest-based industries, according to the Timber Packaging & Pallet Confederation (TIMCON). Increased demand for timber in the aftermath of the adverse weather could see already tight supplies diverted away from the sector.
TIMCON general secretary Stuart Hex said: “Widespread damage caused by the recent storms and flooding means we are anticipating much stronger demand than usual for fencing and construction timber. This will potentially have further impact on the availability of timber to the pallets and packaging industry and as well as other sectors.”
Availability of timber is already undergoing a squeeze as demand from the construction sector has increased; as a combined effect of Government financing incentives and a recovery in the UK economy.
Hex said: “We are seeing more pallet timber imported, especially for pallets for the construction sector and this will erode the dominant market share of 70%-80% of the UK pallet market enjoyed by the UK sawmills.”
The latest Markit PMI Prices and Supply Monitor report states that out of all raw material inputs, it is timber that is by far experiencing the severest supply shortages and, as a consequence, upward pressure on price.
“Independent sources such as the Markit and Poyry reports corroborate what our members have been reporting for some time on the availability of raw material for the production of pallets and packaging,” said Hex. “Non-standard sizes of timber have been most affected, as sawmills have the alternative improved yield and higher prices in alternative sectors and we’re already seeing significant and concerning shortages. The sawmills are reporting that log prices are also rising strongly, especially for small roundwood.
TIMCON, in partnership with the Forestry Commission, has recently given the go ahead to continue the annual Timbertrends survey, which will give an overview of the UK pallets and packaging sector for the fifth consecutive year.
“It’s extremely important for us to have up-to-date and accurate data about our sector, particularly for our dealings with Government and Europe, and also in the light of major changes being considered by Brussels to the ISPM 15 phytosanitary regime,” said Hex.
“We are continually working to keep our members and their clients informed about these important developments in the market as part of TIMCON’s activities, which also include campaigning to Government for a removal of the existing regime of subsidising biomass.”
Hex added: “Although there are short-term issues, UK pallet and packaging manufacturers have shown in the past their flexibility and resilience in maintaining supplies to their customers of their products, which as we know are critical to the UK supply chain.”