WhatWood: the tremendous increase in the volume of wood in 2018 led to the imbalance of supply and demand of timber on the domestic market of Russia

The consultant of WhatWood agency Marina Zotova made a report on «Forest balance of Russia» in the conference «Timber & sawn wood market», organized by MaxConference on the 25^th of April  in Moscow.

The volume of timber harvesting in 2018 increased by 12% to 239 million m3 – this is the maximum volume of modern Russia. The area of forest land leased did not grow: 242 million hectares were transferred to long-term forest management. Rosleskhoz this effect is due to the fact that business comes out of the shadows as a result of a set of measures taken against illegal logging and wood trafficking. Thus, the additional volume of wood raw materials, which was offered by loggers to the woodworking market, compared to 2017, amounted to 27 million m3 or almost 13% additional to the capacity of the timber market in 2017.

As a result, the following trends were observed in the market in 2018-early 2019:

1. In the market of round wood (especially birch of a range of firm) saw an excess of supply over demand.
2. Russian plywood mills are fully provided with high-quality raw materials.
3. Before the loggers face issues: where to implement a range of firm whether to take it out of the woods whether to go in birch plots.
4. The surplus supply of raw materials led to lower prices not just for the birch range of firm, but the timber of other species.
5. Reduced profitability from the loggers.
6. Prices for all sorts are reduced.

In terms of roundwood equivalent, the consumption of raw materials for the production of wood boards increased by 2.5 million m3, sawn timber – 3.5 million m3, pulp – per 1 million m3, other products and wood energy – by 2 million m3. The rest of the raw materials remained on the market: the upper, winter, intermediate warehouses and remained not exported from forest areas. The available stock has led to price pressure on the market.

Detailed information on the market of raw materials in Russia, read the new information product WhatWood monthly report “Market of raw materials in Russia”.