Often described as the barometer of the economy in general, the UK pallet industry is indicating decidedly squally times ahead as leading consumers look to reduce their volumes and their purchasing prices.
Manufacturers are having to swallow substantial price reductions as major users – notably from within the building trade – are generally well stocked in relation to their internal needs and so are placing far fewer orders. Many pallet makers have already signalled their intention to start their Christmas breaks earlier in December as a response to thin order files.
“Pallet manufacturers are driving their prices down to try to win business but they are only devaluing their product. They are throwing away the gains they have tried so hard to earn in recent years,” said one contact.
In a lot of cases, manufacturers’ pallet wood suppliers are preparing to extend their Christmas breaks to take account of the steep slide in demand. Prices of pallet boards have slumped in comparison to their 2007 peaks and are continuing to weaken. Regular exporters of pallet timber to the UK are dismissing price levels over here as “absolutely impossible” to match.
ISPM 15 revision
In related news, an “overwhelming” number of comments have been received as a result of consultation on the revision of the ISPM 15 phytosanitary standard for wood packaging, according to a UK-based expert. These comments were reviewed at a meeting of the Standards Committee of the UN’s International Plant Protection Convention (IPPC) in Brazil earlier this month.
The current document incorporates a number of proposed changes including: improved guidance on the make-up of the ISPM 15 mark on wood packaging; a requirement to make wood largely free from bark prior to treatment (although a tolerance level of around 50cm² has also been introduced into the text); and a requirement for wood used in a repair to be treated in accordance with the standard if there is any doubt as to whether treatment has previously taken place. Previously, it was necessary to state the treatment method but this requirement has been removed from the revision.
If the IPPC’s Standards Committee considers a workable text has been developed, the revision could well be approved in the first half of next year.
Meanwhile, an outbreak of pinewood nematode in Spain was confirmed in early November. Earlier this year, the spread of pinewood nematode in Portugal led to the implementation of a ban on all of the country’s exports of untreated conifer wood. According to the same UK-based expert, Spain will almost certainly be required to demarcate an area from which only heat-treated conifer wood will be allowed to emerge.
A UK importer of pallet timber from Portugal acknowledged that the new arrangements are putting pressure on the country’s limited heat treatment capacity, as well as on local producers’ costs at a time when their export opportunities are already severely restricted.
