The supply of wooden packaging and pallets will come under pressure as the conflict in Ukraine impacts on the supply of wood, according to the European Federation of Wooden Pallet & Packaging Manufacturers (FEFPEB).
Expressing ‘deep sympathies and support for the people of Ukraine’, the organisation, which represents manufacturers in the EU and UK, said the virtual stop on the Ukrainian economy would have ‘serious direct impacts on countries such as Hungary, Italy and Germany (the three most prolific softwood importers from Ukraine); and an indirect impact across Europe by unbalancing the market and increasing competition for more limited wood supplies and putting upwards pressure on prices.’
Ukraine exported more than 2.7 million m3 of sawn softwood timber last year, a significant amount of this for wooden pallets and packaging manufactured in European markets including France, Germany, Italy, the Netherlands and Poland. It also produced and exported an estimated 15 million pallets, mainly to Europe.
Meanwhile, with Russia exporting approximately 4.5m m3of softwood timber into the EU and Belarus exporting approximately 3.1m m3, Europe will be significantly impacted by trade sanctions that have been introduced against the two countries.
Some countries source up to 25 per cent of their pallet and packaging timber from the three countries. Alternative timber sources including Scandinavia, Germany and the Baltic States are only capable of covering a small proportion of the shortfall.
Energy supplies have also been severely disrupted by the conflict, with growth in the price of petrol of more than 30 per cent, and the cost of a barrel of oil now more than US$110. FEFPEB said this would a significant effect on the overall cost of production – leading to inevitable price rises.
FEFPEB Secretary General Fons Ceelaert said: ‘The usual supplies of timber needed for the production and repair of wooden pallets and packaging have had been hit hard, and availability has been significantly reduced. Alongside the sizeable ongoing international challenges that already exist in the market, we expect to see a general upward trend in the price of all commodities, including wood. In the meantime, our member associations’ businesses around Europe are working hard to secure supplies from their partners in order to maintain continuity of pallet and packaging production.’
In the UK, the Timber Packaging & Pallet Confederation (TIMCON) said that while some seasonal trends had begun to return to the market, the conflict has caused instability – and it was closely monitoring impact on supply and prices of its raw materials.
TIMCON President John Dye said: ‘The tragic events in Ukraine have added a further challenge, with closed sawmills and generally disrupted trading with this source country impacting on usual wood supplies into Europe. Meanwhile, economic sanctions will have a significant effect on Russia and Belarus.’
