The results of the work of the timber complex in 2022 and the forecast for 2023

Experts from the Russian Forest Association analyzed the results of the Russian timber industry in 2022, assessed the support measures and made a forecast of the conditions necessary for the stabilization or growth of individual segments of the industry.

Preliminary data on the production of timber products in 2022 indicate a decrease in volume indicators for all segments compared to 2021:

sawn timber - 38 million m³ (−11%);
pellets — 2.5 million tons (−18.7%);
plywood — 3.2 million m³ (−27%);
EAF — 7.2 million m³ (−6.3%);
OSB - 1.5 million m³ (−22%);
MDF/HDF/Fibreboard - 3.6 million m³ (-11%);
pulp — 8.1 million tons (−0.9%);
paper and cardboard — 10.1 million tons (−2.5%).

The results of 2022 are the result of unprecedented sanctions pressure, the complete closure of traditional European markets for the sale of finished products, an increase in transportation costs, a restructuring of the logistics market, the departure of many Western partners and an extremely low exchange rate. All this happened against the backdrop of a rollback of the peak levels of prices for 2021 for forest products on the global and domestic markets and during the period of a global economic recession.

Support measures

Federal and regional authorities are providing support to the timber industry, among which are:

indexation of payment rates for forest use, not exceeding the official inflation rate in the country;
reduction of the terms of state expertise of forest development projects for timber harvesting from 30 to 15 days;
extension of validity of forest declarations submitted before 01.05.2022 until 01.05.2024;
postponing the commissioning of FSIS LC by two years;
permission to cut forest plantations without deadlines for joining felling areas in mature and overmature spruce plantations;
extension of the deadlines for fulfilling the obligations of the investor on priority investment projects in the field of forest development, provided for in the period from 09/02/2022 to 09/01/2024, for another 12 months;
compensation of costs for transportation of industrial products: from 07/01/2022, the maximum subsidized value of compensation for costs for the supply of products from all industries has been increased from 11 to 25% of the cost of exported products.

Conditions for stabilization or growth

The need for further support of the timber industry at the federal and regional levels is obvious. Here is a list of measures that can have a significant impact on stabilizing and improving the situation in the forest industry:

Stimulation of domestic demand for timber industry products. A good measure of support could be the decision of the government to extend the program of preferential and family mortgages, because the construction industry is one of the growth drivers of the Russian timber industry. The development of programs to support and subsidize the segment of wooden housing construction will also be a good incentive.
For the pellet segment - development of a program for the conversion of old (inefficient) municipal and regional boiler houses to biofuel, wood chips, pellets, briquettes.
At the interstate level - the continuation of the course towards the elimination of barriers, such as high import duties and import VAT on domestic timber products. This will help Russian exporters expand their sales geography.
For loggers, a good support measure can be the collection of rent for the use of forest plots based on the actual harvesting of timber by tenants, as well as the solution to the issue of canceling the junction deadlines in deciduous plantations, which is especially important when there is no demand for birch pulpwood in the country and it is impossible to work on export.
The logistics sector needs to continue to develop new transport routes that reduce the cost of delivery, focus on the North-South corridor, and possibly accelerate the modernization and expansion of the East Range routes.