The destabilising effect of Brexit for the UK and Europe more widely is expected to grow as the deadline date of March 29 for the UK to leave the EU approaches.
In the event of a no-deal Brexit, plywood trade between the UK and the rest of the EU would become subject to duty equivalent to the current external tariff on EU imports – that is between 6% to 10% depending on the product.
UK customs have said they will allow cargo to be temporarily ‘waved through’ 20 ports without checks in the event of a no-deal Brexit to avoid hold-ups, with importers then having to complete an electronic customs declaration within 24 hours. But businesses are clearly concerned there will still be at least medium-term disruptions as systems adapt to new trading arrangements and an importer saw signs of the UK plywood trade preparing.
“The European softwood plywood import quota reached a balance of 275,000 m3 several weeks earlier than in 2016 and 2017,” they said. “One factor could be UK buyers building up stocks to hedge against anticipated import disruption.”
Overall plywood companies said they were less optimistic for business than at the start of 2018. “There are already many uncertainties affecting consumers and businesses and I think the plywood market will be a lot more volatile,” said one. “Importers as a result may become more cautious about holding stocks. And profit margins will be under pressure for sure.”