MOSCOW, August 7, Natalia Dembinskaya. The production of sawn timber has sharply decreased, enterprises are closing, prices are breaking records — these are the consequences of the fact that the Finns have refused Russian timber. Neither the felling of their own forests nor supplies from other countries helped. What Helsinki is counting on is in the article .
Prices have soared
Logs have risen in price to a 15-year high. As a result, raw materials and the final product — sawn timber — cost almost the same. The Sawmill Industry Association is sounding the alarm: production has fallen from 12 million cubic meters to ten.
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Experts expect a severe shortage. Thus, Jakob Donner-Amnell from the University of Eastern Finland predicts a long period of high prices. According to him, there «may not be enough wood for everyone.»
Punishing Yourself
This embargo was introduced in the EU as part of the fifth package of anti-Russian sanctions in 2022. Previously, Russia was the second largest supplier after China.
According to the Federal Customs Service, timber exports to currently unfriendly countries reached 504 million euros in 2021. Of these, 374.5 million went to Finland.
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«The Finns have deprived themselves of 2.8 million cubic meters of fuel wood, 4.8 million of unprocessed timber and 0.5 million of sawn timber. In total, more than eight million cubic meters,” notes Anastasia Prikladova, associate professor of the International Business Department at the Plekhanov Russian University of Economics.
Interests Diverged
We will have to cut down our own forests, local industry organizations warned back in 2022. It would seem that there are resources. According to estimates by the Finnish Institute of Natural Resources, forests account for 77% of the country's territory. This is half a percent of the world's timber reserves, the largest in Europe.
According to various estimates, Finland harvested 69-73 million cubic meters of timber in 2023, which is 86-91% of the maximum permissible level. That is, almost all Russian imports can be replaced, Prikladova points out.
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“This means that problems arose at the corporate level. For example, with purchases, where the share of households is high (about 60% of forests are owned by the population). Also, Finnish enterprises are switching to alternative energy sources, which is at odds with the objectives of timber processing. Apparently, the interests of the state, business and the population did not coincide,” the economist reasons.
In addition, the Finns are forced to use the forest not for processing, but for heating — in the form of chips or pellets. After all, there is no Russian import, and thermal power plants have refused peat and coal.
In general, logging is difficult due to the EU's commitments to absorb carbon. And forests grow slowly and are unlikely to recover to their previous level, the media write.
The wrong raw materials
Supplies from other countries are very expensive, the quality is not right, and the range is incomplete.
Thus, Finland imported mainly unprocessed and sawn timber, as well as fuel wood, from Russia. And while the Baltics, Sweden and Denmark helped with fuel wood, there are problems with timber, notes Prikladova.
As a result, the industry is in crisis, and timber processing plants are closing. Last fall, the Sunila pulp mill in Kotka, as reported by the owner, Stora Enso, became unprofitable.
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In August, Metsä Fiber laid off staff at the pulp mill in Joutseno on the border with Russia. Operating losses for the first half of the year are 64 million euros. They will have to “adapt production to low supplies,” the company clarified.
New markets
Russia, however, has found other markets by increasing exports to friendly countries.
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Thus, in 2023, China purchased 14 million cubic meters, Uzbekistan — two million, Kazakhstan — 1.1.
Turkey, Kyrgyzstan, South Korea, Egypt, and the UAE are buying timber. Sales to Lebanon, Iran, Iraq, Syria, Israel, and Afghanistan have grown significantly, notes Petr Shcherbachenko, associate professor at the Financial University under the Government of the Russian Federation.
The market share in Japan (15%) has been preserved, and Helsinki is extremely unhappy with this.
In March, the Finns turned to the European Union, demanding that Tokyo be persuaded to stop importing sawn timber and laminated veneer lumber from Russia. Their own exports to Japan have fallen by half.