Tellerreport – The forest industry was disappointed with Russia’s ban on exporting unprocessed wood abroad. Most of Finland’s imported wood comes from Russia.
The Finnish forest industry considers the ban on the export of softwood timber in Russia to be a very unpleasant decision, which creates uncertainty in the market.
According to the Kremlin website and Russian state media, President Vladimir Putin plans to ban the export of unprocessed raw wood from Russia abroad from the beginning of 2022.
Taloussanomat reported on the issue on Wednesday.
- Read more: Putin bans exports of raw wood from Russia – order also punishes Finnish forest industry
How big is the notch?
According to Palokangas, Putin’s ban applies to logs and pulpwood, but not wood chips.
According to Luke, the Finnish Center for Natural Resources, Russia’s share of Finland’s wood imports was 74 per cent last year.
Russian raw wood accounts for ten percent of the forest use of the entire Finnish forest industry.
– It’s quite a lot, but it must be remembered that the ban only applies to round softwood.
Most birch wood is imported from Russia, which is also not covered by the export ban.
About half of the less than nine million are this birch.
Who is harmed in Finland?
Russia’s decision is affecting Finland’s mechanical forest industry, ie sawmills and plywood mills that use Russian logs.
– These have a long tradition of importing Russian wood from the post-war period.
With regard to the ban on pulpwood, the pulp and paper mills will also be harmed.
There are less than ten companies importing large quantities of Russian wood, including Stora Enso, UPM and Metsä Grup, which also have their own wood processing in Russia.
– Of course this is a sad thing.
In general, wood procurement always relies on several sources of supply.
When one gets caught, it puts pressure on other private traders and Metsähallitus trees.
Why did Russia do this?
The ban has been mediated in Russia for years, so it did not come as a complete surprise.
According to Putin, the ban is intended to address illegal logging in Russia.
The argument does not seem entirely plausible.
According to Palokangas, the country’s timber harvest is less than five times the Finnish harvest.
– There may be some problems on the European side as well, but not at least in the areas where Finland procures its wood, Palokangas says.
Palokangas sees protectionist features in the decision.
Russian industry has easier access to raw materials when its own exports are banned.
– It is sure that many companies will fail when there are no more buyers.
According to Palokangas, the decision may be directed at China, which has increased exports very strongly.
EU exports, where Finland is the largest exporter, have instead been stable.
Export bans always have a price.
Russia has received income and Western currency from the wood sold out.
The economic situation is also weak, and at least not with forest exporters.
In addition, the decision easily appears again as a new example of Russia as an uncertain investment environment.