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Ukraine-Russia conflict to shrink global sawn timber market
Posted on May 11, 2022 |
- The immediate consequence of the conflict in Ukraine and Western sanctions is a sharp drop in timber exports from Russia, Belarus, and Ukraine.
- The disturbance in the trade had a significant impact on global markets as these three countries accounted for 25% of global sawnwood trade last year.
- The most notable impact was the termination of lumber supplies to Europe and some Asian countries but trade with non-sanctioned countries will also change as Russian and Belarusian companies struggle to transact finance and obtain credit because their timber is considered “conflict timber”.
- In 2021, Belarus, Russia, and Ukraine collectively exported 8.5 million m³ of sawn softwood to Europe, which is 10% of the total demand on the continent.
- In the longer term, some sawnwood companies may invest in new production capacity, although log supplies are limited in many parts of Europe.
- In addition, the main overseas markets, China, the US, Japan, and the MENA region (the Maghreb and the Middle East) vary in terms of product demand, affordable prices, exchange rate volatility, political stability, and consumption prospects, which may limit European exporters overseas presence to fewer markets that are consistent with their product mix and risk tolerance.