In 2009 woodworking and timber products production index made up 82.3% against indicator in 2008. Index for pulp and paper, publishing and printing reached 87.5% (to 2008), incl. publishing, printing and replication of written media – 76.4%, pulp, pulp wood, paper, cardboard and related products manufacture – 98.0%.

The main reason for decline in timber products manufacture is a sharp drop in demand in 2009 from construction market (woodworking products are mostly used by construction industry) and foreign markets.

Export of basic types of timber products has significantly decreased in Russia in 2009 as compared to the previous year. Annual average prices for unprocessed timber went down to 118.5 USD / m2 for the first time in 10 years.

Most share of timber export fall on “grey” export. Experts hold different views on volume of illegally exported Russian timber – 20-50% of total harvesting volume. As for export of illegally harvested timber, this figure amounts to 15-25% of total exported timber and related products.

According to participants in the woodworking market, 2009 was characterized by a tendency of closing down of unprofitable and inefficient productions, which led to withdrawing of some players from the market and formed a basis for further branch consolidation and a number of amalgamations that are to happen this year.

2009 watched a decreased demand in the domestic market. According to branch experts, the situation in 2010 will not differ significantly from what we have in 2009, however, increase in demand is expected by 2011. At the same time low but stable demand will be kept already in 2010.

In the world market the Russian timber industry still remains a competitive producer due to low production costs with gradually losing this advantage.  The Russian market has  many perspectives for development, but  there should be taken a complex of measures (including state support) in order to overcome crisis consequences and solve other urgent issues. 

Business Support Bureau "Runa"  www.runa.info 

For more information about Russian timber industry, please see MOST  (Market Overview. Statistics. Trends) - regularly updated digest of the situation in the Russian timber industry! New edition in December 2009!