Russian lumber export prices have plummeted by nearly 50% in US dollar terms from $310/cum in early 2022 to $163/cum in the third quarter (Q3) of 2023, primarily due to the European boycott, reduced Chinese demand, and Ruble depreciation against the US dollar.

 

The most significant price declines were observed in exports from Russia's Northwest, followed by Russia's Far East and Siberia, said Hakan Ekstrom, Director, International Forest Products Sector, in WRI Market Insights.

 

Russian lumber exports have sharply dropped due to boycotts and reduced demand in key markets. In 2022, Russia's invasion of Ukraine led to boycotts in Europe, North America, and Asia, resulting in a dramatic decrease from 31 million cum in 2020 to about 23 million cum in 2022. Shipments further declined in 2023, estimated to be under 21 million cum for the year, with a significant 4.6 million cum drop in exports to Europe alone.

 

Redirecting shipments

Despite hopes of redirecting lost shipments to other regions like Asia, CIS states, or Mena countries, Russian lumber exports to traditional markets continued to decline over the past two years. About 25% of total export volumes have been lost since 2021 due to Europe's boycott and China's weakened economy.

 

During the first seven months of 2023, most Russian export lumber was directed to China and CIS countries, constituting 85% of total exports compared to less than 70% in 2021. Concurrently, the Russian domestic market also saw weakened demand for forest products.

 

This decline in demand and export volume led to a nearly 20% reduction in lumber production in Russia over the past two years.--TradeArabia News Service