How do Russian forestry companies survive
The current situation of Russian timber export development is already in a critical season. In the first 11 months of 2022, Russia exported about 21.6 million cubic meters of sawn timber to the world market, which is huge but 22 percent less than the same period in 2021, according to Russian analyst WhatWood.
The first is the collapse of European markets as a result of the conflict between Russia and Ukraine, but it goes beyond that. In November, exports to Uzbekistan faced the same pattern: they plunged almost threefold, to 90,000 cubic metres, compared with the normal monthly figure of 200,000-250,000 cubic metres. The reason is that transit of sawn timber through Kazakhstan to Uzbekistan and other Asian countries is restricted.
Optimized timber exit plan in Russia
At the same time, Russia is also actively helping itself, optimizing the timber exit plan. From the end of January 2023, timber, sleepers, logs and roughed timber can be exported by road. Earlier in November, the government restricted the export of sawn timber and ties to railway checkpoints.
It will also be possible in the future to export timber from Russia to Eurasian Economic Union countries or through their territories to third countries, while it will also be possible to transport timber industrial complex (TIC) products from one Eurasian Economic Union country to another through the territory of Russia or by road to third countries.
Meanwhile, Russian authorities have made it easier to export timber abroad, Kommersant reported. Additional aid measures were discussed, including financing, priority timber shipments and new routes.
The aid will be used to subsidize the cost of shipping industrial goods to China, and the maximum subsidy will be increased from 300 million rubles to 500 million rubles.
Russia's transport sector and Russian Railways have been instructed to consider prioritising exports of wood products, which are widely used.
At the same time, the process by which the Russian forest department calculates the rent it pays to use forest areas will be changed. It will be determined provisionally based on the timber actually harvested by the lessee in 2023.