World to Face Major Impact on Timber Business Amid Russia-Ukraine War

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The ongoing war leading to sanctions against Russia to trade and difficulty with financial transactions is set to disturb supply chain and shipments of forest products throughout the world. Russia will be forced to contract its shipments impacting international trade flows of timber based products.

Russia is the largest lumber exporter globally and ranks as the seventh biggest exporter of forest products worldwide. Russia exports forest products were valued at over $12 billion in 2021. Forest products exports from Russia have increased rapidly in past five years, led by softwood lumber and paper products.

Countries like China, who looks in support to Russia aggression in the conflict, may also be affected by limited trade sanctions. This development would impact large producers and exporting country like China, who are dependent on import of timber, logs, wood chips, lumber, pulp, and paper from North America, Europe, Oceania, and Latin America even for their domestic use. These world regions are considering expanded sanctions for Russia and countries that directly or indirectly support Russian attack on Ukraine. Going forward, Russian companies will find it challenging to trade with the world.

The country has huge forest resource and thus it offers potential to increase timber based RUSSIA UKRAINE WAR TO IMPACT TIMBER BUSINESSES ACROSS WORLD AND IN INDIA products for their domestic industry. To meet increased global demand for wood products, the Russian government recently initiated programs to encourage investments in the sector to both expand/modernize existing manufacturing plants and build Greenfield facilities.

However, it is likely that many investment projects in the wood based products manufacturing sector in Russia will come to halt as the growing list of sanctions and financial transaction is getting imposed. Due to sanctions, Russian exports will face issues in supplying lumber to Europe thus impacting lumber, plywood as well decorative veneer prices. The scarcity of pallets and timber products is imminent feel experts and media in international business.

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