By Eugene Gerden
By Eugene Gerden
May 27, 2019 – Leading Russian timber companies plan to significantly increase exports of their unprocessed timber and pulp to Canada and the U.S. during the next several years, according to recent statements made by an official spokesperson of Russia’s minister of industry and trade.
Due to the current economic crisis in Russia and devaluation of the national currency – the ruble – caused by Western sanctions, timber and pulp exports to the domestic Russian market in recent months have become no longer profitable for local producers. Many have re-directed their supplies to North America, and especially Canada, in recent years.
Suppliers are currently carried out directly, as well as through third-party countries, such as China, whose government imposed a ban on the felling of forest about 10 years ago due to ecology issues.
The range of exports includes plywood along with lumber produced from Russian hardwood. A significant part of the exports also accounts for pine, as well as pulp as a separate item.
According to Denis Manturov, the Russian minister of industry and trade, the devaluation of the Russian ruble has led to prices for Russian wood products becoming very attractive for major customers from both Canada and the U.S. This, according to the minister, provides a competitive advantage to local producers in North American market.
Manturov also added that Russia plans to gain significant benefits from the exports of its timber and pulp to both the U.S. and Canada due to the ever-growing local demand for these products, caused by increasing volumes of their local consumption as well as the reduction of competitors from China observed in recent years.
In the meantime, in order to ensure large-scale export volumes, the Russian government is providing subsidies for the exports of Russian wood products to the North American region. In addition, the government may reduce the existing duties on the exports of domestic range of wood products to the North American region, despite the fact that such measures will be contrary to Russia’s WTO obligations.
According to data of the Russian Ministry of Industry and Trade, total exports of Russian timber to the U.S. in 2018 reached about US$150 million, and there is a possibility that these figures may significantly grow this year. In the case of pulp, these figures are varied in the range of US$80-100 million.
Overall, the annual exports of timber from Russia is estimated at 30 million cubic metres, the majority of which so far have been exported to the EU states. However, due to the deterioration of relations between Russia and the European Union and the current weakness of the euro caused by the stagnation of EU economy, the majority of Russian timber producers will consider the North American region as one of the priorities for their further development in the years to come.