In 2020 Russia exported around 15 million cubic meters of logs which accounted for 12% of the Roundwood that is globally traded. Russia’s President Vladimir Putin, however, has proposed a new log export ban that will stop the exportation of hardwood logs of high-value and softwood logs from 1st January 2022.
The Government of Russia, at present, is also considering several new regulations that aim to reduce the green softwood lumber exportation. These regulations might also start in 2022 to increase investments in kiln-dried lumber for exports.
Currently, lumber dried in Russian sawmills is 20% whereas, in the US and EU, it makes for almost 80-100% of the exports. The ban would mean complete processing within the Russian companies, thereby ensuring more investment within the industry. It will give better oversight of logging within Russia along with the ability to trace wood sourcing.
The reduction of green lumber and log exports are meant to control illegal logging better and stimulate value-added processing within Russia. When enacted, the law will impact the Eastern parts of Russia, where around 10% of the total harvest of timber is exported in the form of logs. In the short term, however, the lumber industry of China will be impacted the most since the export of softwood logs from Far East Russia will be prohibited.
In 2019, 79% of the softwood export from Russia went to China, where paper, sawmills, and pulp depended on this supply. Thus, China will have to start sourcing more sawlogs from various regions of the world, including Oceania, the US, and Europe.
Even though 10% of the China softwood imports still come from New Zealand, among other places, a majority still comes from Russia. The just-released Russian Log Export Ban 2022 study expects China to evolve to the importation of lumber from the importation of Roundwood. This massive shift will make way for lumber manufacturers in Russia and Europe to increase their shipments to China.
Since China will be unable to import from Russia, they would have to import from elsewhere, increasing the global demand and putting strain on the wood industry. This would increase the process and lead times, making already struggling markets suffer further. The increased competition of logs will put upward pressure on the sawlog prices in those markets.
With this export ban in place, Russia is certainly looking at long-term implications. You can track the market condition through real-time updated news, wood production, inventory, export/import, timber price index, US grading rules, container line performance, and logistics available at Timber Exchange. To know more, check out https://www.timber.exchange/market-data-hub.