Monday, 07 August 2017 16:34

How is the Euro Impacting Imported Tropical Hardwoods?

If you have been following the change in the Euro the last few months you would have noticed that is has strengthened by approximately 12% since April.  Back in April 1 Euro cost approximately USD1.05 and today that price is roughly USD1.18.

For organizations that import hardwood lumber from Africa that equates to more than a 10% cost increase since lumber is purchased in the Euro currency.

sapele 44Hardwood supplier inventories of African species that have already landed and been in warehouses in the United States are generally lower than in previous years. Across much of the industry much emphasis has been put on managing tropical lumber inventories in warehouses over the past couple of years. What that means is that the cost increase due to the stronger Euro will have an effect fairly quickly, and therefore importers will probably be forced to also react promptly on the sales side to keep up with the rising costs.

In light of this we have been advising customers to keep a few things in mind regarding African hardwoods: 

  1. Take note of your existing inventories.  If you can replace recently used stock now before the likely price increases take effect, consider doing so. There is a good chance there will be multiple increases throughout the fall to keep up with the rising cost of the product.
  2. If you are quoting jobs that are 2 or 3 months down the road be sure to talk to your hardwood supplier about his views on price direction and make sure to take that into account when submitting bids.

As we come out of the summer months chances are the Euro will continue to climb. Even though prices in Africa have been stabile most of the year, increases on African lumber should be expected for companies in the United States this fall, and they could be in the double digit percentage range.  If there is anything we can do to help you with your tropical hardwood needs, please let us know.

Jesper Bach
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