How big is the impact of the conflict between Russia and Ukraine on the timber industry?

The conflict between Russia and Ukraine has not been completely resolved for a long time. As a country with large timber resources, this undoubtedly brings economic impact to other countries. In the European market, France and Germany have a large demand for wood. For France, although Russia and Ukraine are not major wood importers, the packaging industry and pallet industry have experienced shortages, especially construction wood. The cost price is expected to be There will be an upswing. At the same time, due to the rising impact of oil and natural gas, transportation costs are higher. The board of directors of the German Wood Trade Association (GD Holz) said that almost all official activities have now been suspended, and Germany is no longer importing ebony wood at this stage.

With many goods stuck at the port, the production of Italian birch plywood is almost at a standstill. About 30% of imported wood comes from Russia, Ukraine and Belarus. Many Italian merchants have begun to purchase Brazilian elliotis pine as an alternative. More affected is the Polish timber industry. Most of the timber industry relies on raw materials and semi-finished products from Russia, Belarus and Ukraine, so many companies are very worried about supply chain disruptions.

India's export packaging is more dependent on Russian and Ukrainian timber, and export costs have increased due to the increase in materials and transportation. At present, in order to conduct trade with Russia, India has announced that it will cooperate with a new trade payment system. In the long run, it will stabilize India's timber trade with Russia. But in the short term, due to the shortage of materials, plywood prices in India have risen by 20-25% in late March, and experts predict that the rise of plywood has not stopped.

This month, shortages of birch plywood in the United States and Canada have left many real estate and furniture makers struggling. Especially after the United States announced last week that it would increase the tax on imported Russian wood products by 35%, the plywood market has experienced a large increase in the short term. The U.S. House of Representatives passed legislation to end normal trade relations with Russia. The result is that tariffs on Russian birch plywood will increase from zero to 40-50%. Birch plywood, which is already in short supply, will rise sharply in the short term.

While the total production of wood products in Russia is expected to fall by 40%, possibly even 70%, investment in the development of high-tech enterprises may almost completely cease. Broken ties with European, American and Japanese companies and consumers, with several foreign companies no longer cooperating with Russia, could make the Russian timber complex more dependent on the Chinese timber market and Chinese investors.

Although China's timber trade was initially affected, the Sino-Russian trade has basically returned to normal. On April 1, the first round of Sino-Russian Wood Industry Business Matchmaking Conference sponsored by the China Timber and Wood Products Circulation Association Timber Importers and Exporters Branch was successfully held, and an online discussion was conducted to transfer the original European export share of Russian timber to the Chinese market. It is very good news for the domestic timber trade and processing industry.

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Post time: Apr-06-2022