The duties will be drunk dry – Newspaper Kommersant No. 86 (7048) of 05/22/2021

by time news

The introduction of duties on raw, roughly processed wood in half a year from July 1 will not have time to significantly affect the situation on the domestic market, according to the players of the timber market and consumers. But, if the measures are extended, this could lead to a reorientation of producers to dry products, as well as to an almost inevitable further rise in the price of timber. First of all, experts and companies note that the restrictions will negatively affect small and medium-sized producers, but will play into the hands of large wood processors who export only dry products.

In Russia, from July 1 until the end of 2021, by decision of the government, export duties will begin to apply on certain types of roughly processed wood with a moisture level of over 22%. In particular, for conifers and oak, the export rate will be set for the first time at 10%, but not less than € 13 and € 15 per cubic meter, respectively. In addition, export duties on beech and ash will increase to 10% (but not less than € 50 per cubic meter), now amounting to € 10 and € 12 per cubic meter, respectively. According to the government’s calculations, such measures will limit the export of unprocessed and roughly processed wood under the guise of sawn timber, as well as curb the rise in prices, which have grown significantly since the middle of last year (for some types – by half).

The Arkhangelsk PPM noted that the company will not be affected by the new restrictions, since it produces only dry sawn timber at its three plants. But this may have a positive effect on the market as a whole, the company believes, by increasing the supply of raw materials.

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Nikolay Ivanov, Managing Director for the Implementation of State Development Programs and Forest Policy of the Segezha Group, noted that such a step would help to fight more effectively the gray schemes of exporting roughly processed timber abroad. “This is undoubtedly beneficial for manufacturers of high value added products, including the Segezha Group,” he said. In his opinion, efforts to reduce administrative barriers for loggers, primarily small and medium-sized ones, would be useful as additional measures to curb prices for sawn timber in Russia. Logging capacities in the country are sufficient, they can and should be used to meet the growing domestic demand. Mr. Ivanov recalled that over the past three years, the stock fell by almost 10%.

Vadim Fidarov, director for work with government agencies of the Association of Wooden Housing Construction, believes that with the help of new measures, the state is signaling to business about the need to create and increase drying capacities. “It is likely that after several years export duties on dry lumber will be introduced in order to create production facilities for the production of timber structures, such as glued beams and beams, construction trusses, house kits, parts of buildings and structures, etc.,” he believes … At the same time, Yulia Yurlova, co-chairman of the board of the association, considers the measures taken to be insufficient. “The market cannot be calmed down by the introduction of duties,” she says. “We would like to propose introducing quotas so that some of the sawn timber remains in Russia.” She proposes to change the size depending on the level of domestic prices, and to establish duties without taking into account the degree of humidity. Otherwise, says Ms. Yurlova, domestic prices will tend to world prices, which will cause stagnation in the construction market.

WhatWood analyst Danil Parygin notes that the introduction of duties is quite expected against the background of a certain shortage of sawn timber on the domestic market. Many large and medium-sized players, the expert says, have taken preventive measures and invested in drying facilities. By and large, duties of 10% on lumber with a moisture content of 22% and above will be accepted by the market at the current extraordinary prices on world markets, he believes. At the same time, according to Mr. Parygin, the demand for drying chambers and for outsourcing of drying capacities may increase.

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Olga Mordyushenko

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