Continually increasing costs of raw materials are now impacting on the price of wooden pallet and packaging products from the UK and Ireland, says the Timber Packaging & Pallet Confederation (TIMCON).
The Markit/CIPS report released at the start of October shows the price of pallet timber has increased for the 14th consecutive month, the price of nails has risen for 16 months running and the price of both new and recycled wooden pallets is also now rising.
Stuart Hex, TIMCON general secretary, said buoyant alternative markets creating a scarcity of imported timber and an unfavourable exchange were two causes of the problem. He added that with no nail manufacturing industry left in the UK, domestic manufacturers are sourcing nails from the EU and even further afield, which has compounded the exchange rate effect further.
“TIMCON monitors the market continuously and we’ve seen timber prices escalating since the start of 2016,” he said. “This year alone, UK and Irish pallet timber has increased by more than 10 per cent and the Baltic by even more.” In the long-term, the price of timber has been modest and increases usually ease off in the winter
months, but the price has continued to rise during this period, he added.
“Approximately 70 per cent of pallet costs are timber, so these unrelenting increases are now clearly having to be fed into the selling prices of timber pallets and packaging. These increases not only affect new pallets, packaging and repairs, they also increase demands for reconditioned pallets which is leading to supply issues.
“As exchange rates and inflation continue to have an effect, price rises are currently occurring across many other industries, in alternative materials, for example. This is a general problem, but the very high cost of materials in the pallet industry makes it impossible to fully absorb increases on this scale. The wooden pallet and packaging industry is working closely with its customers to manage this situation. “Wooden pallets and packaging remain by far the most economic choice, not to mention the most environmentally sustainable.
Timber pallet and packaging industry issues warning over sustained price rise in raw materials
OCTOBER 2017