OPORA RUSSIA and the Russian Forest Association propose to abolish export duties on raw lumber
OPORA RUSSIA, in a letter addressed to Deputy Prime Minister Victoria Abramchenko, proposed to abolish export duties on raw sawn timber and expand subsidies for the transportation of timber cargo to all seaports of the country. Such measures can support small wood processors amid falling exports. An alternative option involves setting a minimum duty at 1% for three years, followed by a gradual increase to a barrage level.
The tightening of export barriers for wet sawn timber began in July 2021, when the duty rate was 10% for softwood and oak. These measures were aimed at limiting the export of unprocessed and roughly processed wood, curbing the growth of prices for it and reorienting business towards the production of high value-added products within the country.
Andrey Goncharov, First Vice-President of the Russian Forest Association, Chairman of the OPORA RUSSIA commission on the forestry complex at comments to the Vedomosti newspaper: “For lumber of natural moisture accounts for 20–30% of all sawn timber exports from Russia. The proposed measures can help small and medium-sized businesses, especially enterprises in the Far East, where there is a lack of drying capacity..
In addition, OPORA RUSSIA proposes to extend the subsidization of transport costs for the export of forest products to all points of departure, not limited to the territory of the North-Western Federal District (in early April, the President of the Russian Federation instructed to allocate additional funds from the federal budget to compensate for part of the transport costs when transporting timber cargo through the northwestern ports). Experts believe that the expansion of measures to subsidize costs to any ports of the Russian Federation will help reduce the costs of timber processors and increase their competitiveness in the markets.
The experts also drew attention to the fact that the entire volume of exports of the Russian timber industry, which went to Europe, simply will not fit on other export markets. This could lead to reduced purchases of raw lumber from smaller companies, which would negatively impact their business. However, ease of export duties on wet sawn timber could help small scale loggers retain jobs and become more flexible when negotiating prices with contractors.