War sanctions cut Russian timber exports by over 30%, straining economy

Posted on February 14, 2025   |  

Sanctions and rising interest rates have cut Russia's timber exports by more than one-third, reducing a significant source of national income.

The timber industry, contributing 1% to Russia's GDP, is facing major difficulties.

Russia's Central Bank raised interest rates to 21% last year, putting pressure on major pulp, paper, and lumber companies.

Before the war, Russia was the world’s second-largest lumber producer, with 82 billion cubic meters of forest resources.

Sanctions have pushed Russia to rely more on China, India, Japan, and South Korea to recover its £5 billion export losses.

The Segezha Group, which produces a significant share of Russia's forest products, plans to increase timber-based exports to India.

The company aims to grow India's share of Russian lumber exports from 3% to over 25% by focusing on prefab construction, biofuel, pellets, and plywood.