OREANDA-NEWS. January 05, 2011. Russia earlier announced that it is freezing its timber export duties on their current level; the change took affect at the turn of the year and the freeze will remain in place until Russia joins the WTO. It would have been necessary to implement lower duties much sooner, however, as the Finnish Forest Industries Federation said in a press release.

“It would have been good if the lower duties, which were agreed to in negotiations between the EU and Russia last November, could have taken effect immediately at the beginning of 2011 instead of after about a year because this would have promoted the revival of our forest industry cooperation. Russia has considered forest industry investments important, but these cannot be implemented if export duties and other trade barriers that hamper activities are not removed as quickly as possible. Russia should also focus on the development of its infrastructure and boost confidence in the availability of wood raw material for decades to come,” says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.

Timber export duties will not be removed in their entirety once Russia joins the WTO, but the expectation is that they will not target the timber grades, which are imported by Finland, as heavily as has been the case up to now. The duties levied on hardwood will reduce by about three-thirds and softwood duties will be cut by about half.

The forest industry of Finland has adjusted its operations to reduced Russian timber imports and largely relies on domestic raw materials. How much imports recover depends on the cost of Russian timber as well as on the industry's export developments and the availability and cost of domestic timber. Russian timber imports now only account for around 10% of total consumption

In 2009, Finland imported 6.1 million cubic metres of timber from Russia when measured using the barked volume. This is equivalent to 5.3 million cubic metres of de-barked timber. International trade volumes are measured using the de-barked amount, while Finnish statistics are compiled using the barked volume.

The forest industry of Finland consumed about 52 million cubic metres of wood in 2009. Imports from Russia totalled 5.3 million cubic metres in January-September 2010. Russian timber imports peaked at 17 million cubic metres in 2005 (14.8 million cubic metres using the de-barked volume).

Pulpwood accounted for the majority of Russian exports to Finland, as Russia does not commercially utilise birch pulpwood, for example, to any great extent.