Growing volumes of timber traded into the Middle East and North Africa could be slowed to a crawl due to the Israel-Iran conflict, with the Baltic and International Maritime Council warning that goods transported through the Strait of Hormuz and the Gulf could face significant disruptions.
“Before the US attack (on Iranian facilities on Sunday), the impact on shipping patterns was limited. Now, after the US attack, we have indications that the number of ships passing is reducing. If we begin to see Iranian attacks on shipping, it will most likely further reduce the number of ships transiting through the Strait of Hormuz,” according to Jakob Larsen, the BIMCO Chief Safety & Security Officer.
While the vast majority of shipments are connected to crude and refined oil, uncertainty is also having an impact on timber traders, like Mike Cardin from Cardin Forest Products, who has re-routed hardwood exports to the Middle East: “If it keeps escalating, there won’t be any orders coming in the next, who knows how long,” Cardin told Fox Business. According to Cardin, the vast majority of global markets have slowed on US exports amid growing fears that Trump’s national security prob on lumber imports – now due in November – will lead to blanket reciprocal tariffs placed on timber traded both in and out of the US.
“Right now, it’s a little painful. We’re stuck with warehouses full right now.”
The problem for Cardin and other timber businesses is the lack of stability and consistency in policy: “If there’s some constant, then people will buy. They can adjust the pricing. Right now, no one knows what’s going to happen. So, it’s shut down that export market pretty much. At least it’s put on hold,” said Jarrod Cardin, also from Cardin Forest Products. And then there is inflation, with Fox Business reporting that wood product inputs now cost 30% more today than they did before the pandemic, putting further strain on sawmills already struggling to stay afloat.
Why the Middle East is a growing market for hardwoods
Last year, the American Hardwood Export Council (AHEC), the United States leading international trade association for American hardwoods, revealed that the United Arab Emirates (up 27%), Saudi Arabia (up 8%), and Egypt (15%) were driving a spike in exports of hardwood lumber to the region – driven by extremely ambitious construction projects. Earlier this year, Wood Central revealed that Australian-based Weathertex was selling weatherboards, wall panels, and cladding (made from pulp logs in sustainably managed New South Wales forests) into several regional countries, including both Iran and Israel.
- To learn more about the growing appetite for timber in the MENA region, click here for Wood Central’s special feature.
