Japan significantly reduced imports of Russian veneer logs

The Russian government has been promoting wood processing in the Russian Far East region and log export duty has been raised step by step, which reduced supply of larch logs for plywood manufacturing in Japan. The duty was 25% until 2018 then increased to 40% in 2019 and 60% in 2020.

The import of Russian larch logs in 2018 was about 102,000 m³, in 2019 was about 77,000 m³, 25.2% less than 2018. First five months import in 2020 is about 14,600 m3, 52% less. High export duty is prohibitively high so that many larch log exporters quit in 2019. Export prices of Russian larch are about US$190 per m³ (C&F), which costs over 20,000 yen per m³ so again like Canadian Douglas fir logs, the prices are not competitive with domestic larch logs.

Larch veneer is another major export item from coastal Russia. The supply needs to be adjusted to reduced production of Japanese plywood mills but larch veneer helps simplify plywood processing at the mills and it can be used for face and back to guarantee enough strength so it is valuable material for plywood mills.

According to the wood statistics, logs supplied for plywood manufacturing are 5,4 million m³ in which share of imported logs is 12.9%. In 2015, the volume was 4,2 million m³ in which share of imported logs was 20.5% so in four years, share of imported logs decreased.

Reasons that domestic plywood manufacturers look for domestic logs for plywood manufacturing are long term supply stability and no risk of exchange rate, which changes cost of logs from time to time. Domestic larch and cypress are higher in cost compared to cedar but lower than imported species.