Russian share of the global timber market may fall further

MOSCOW (Scrap Monster) : Despite the government announcing ambitious plans to raise the timber output in the Far East by nearly 30% and boost timber processing by more than double, industry analysts believe that the Russian share of the global timber market may further fall by 2016.

The Russian government aims to boost the timber output by the Far East by more than 45% from the current 11.7 million cu.m to 17.3 million cu.m by 2016. Also, timber processing is expected to rise from 4.86 million cu.m. in 2012 to 11.9 million cu.m in 2016.

On the other hand, experts see the Russian timber exports to drop further. The Russian share of the global timber market is only around 4 to 5%. Russia's share of the Japanese, South Korean and Chinese markets has fallen from 59 per cent in 2007 to 26 per cent in 2012. The The domestic demand in the Far East is also witnessing a slow down.

Meantime, the prices of raw timber continued its fall during the first quarter of 2013. The average prices of raw timber during Q1 2013 were 89.4 dollars per cu.m. The rise in tariffs on timber exports by Russia may also contribute to drop in exports from the country. The new tariffs have effectively made exports of raw timber from Russia almost uneconomical.