Thursday - October 16, 2008
News From The North
In a move that was supposed to increase domestic timber production, Russia has doubled the export tariff on “round timber”, ie tree trunks. But it turns out that Russians have plenty of round timber thank you, and the export tax has dried up foreign purchases. Oops. Government Mentality seems to be a world wide pandemic.
The boost in Russian export tariffs on round timber has not resulted in more domestic processing, as intended by Russian authorities. On the contrary, major parts of the Russian forestry processing industry experiences decline and are threatened by crisis.
Russia this year introduced a major increase in export tariffs on round timber in a bid to boost domestic processing. By next year, the export tariff will amount to 50 EUR per cubic meter, a 100 percent increase compared with last year.Now, figures from the Republic of Karelia—one of the former main timber export regions – show that processing is not flourishing as intended by Moscow, but rather experiences negative growth.
According to Regnum, regional First Deputy Minister of Forestry in the Republic of Karelia confirms that timber processing in the region is falling and that the negative growth is expected to increase in the period ahead.
While pulp and paper production in the region the first half of the year increased 1,9 percent, the growth has been reduced to only 0,3 percent seen over the last nine months. The situation is worse in timber processing where the decline amounts to 16 percent year-on-year. The drying-up timber exports to Finland might now put the regional industry in crisis. A major part of the industry remains hesitant towards extend operations in Russia. As a matter of fact, a number of companies are strongly against the higher export tariffs imposed by Moscow.
Of course, for every border there’s a way to get across it, and for every tariff and law there’s somebody willing to look the other way ...
The World Wildlife Fund says Finland is one of Europe’s biggest importers of illegally felled timber. Most of it comes from Russia.
The WWF says that in 2006, 10.4 million cubic metres of illegal or suspect timber was exported from Russia, and nearly half of this passed through Finnish mills, Yle News reports.Finland is currently in a heated debate with Russia over the latter’s strong increase on export tariffs on round timber. The Finnish pulp industry is highly dependent on the Russian raw materials.
Posted by Drew458
on 10/16/2008 at 07:25 PM
Filed Under: • Miscellaneous •
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