Development of Forest Sector in Northwest Russia and its impact in Finland

 

Subproject 3:

Exports of roundwood and sawnwood from Russia and effects on market competition

 

Kuva: Metla

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Background

International trade of roundwood and forest industry products connects the developing forest sector in Russia to international economy.

 

Russian wood market has become more export orientated over the last decade, partly due to the drastic decrease in national consumption after the collapse of Soviet Union.

 

Increasing exports of the Russian sawnwood industry have crucial effects on the competition in European markets and market shares of e.g. Finnish and Swedish producers.

 

Objectives

Project aims at analyzing determination of exports of roundwood and sawnwood from Russia to its main European markets (Finland/Sweden for roundwood, Germany for sawnwood).

 

As a result:

Better understanding of the functioning of roundwood and sawnwood markets in Northern Europe.

 

Indications of the future competitive situation of the Finnish forest sector, and results also point out for possible ways for finding measures to improve the competitiveness.

 

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Work packages

  1. Specification and estimation of econometric models for Russian roundwood exports (MSc Antti Mutanen and other researchers of the group at FFRI)
  2. Specification and estimation of econometric models for Russian sawnwood exports and analysis of substitution between competitor countries (MSc Antti Mutanen and other researchers of the group at FFRI)
  3. Analysis of the firm level characteristics and differences between Russian and foreign owned forest industry companies operating in Russia (MSc-level study, coordinator Pellervo Economic Research Institute)
  4. Scenarios for the Russian forest industry exports (by Dr. Alexander Moiseyev)

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Results

Better understanding of the functioning of roundwood and sawnwood markets in Northern Europe.

 

  • In 2006, proportional shares of roundwood and sawnwood in the total exports of Russian forest sector were 35 and 25 percents, respectively.
  • Russia has become the second largest exporter of sawnwood in the world.
  • In Europe, about 60 percent of Russian roundwood exports have been allocated to Finland .
  • The share of logs in the total roundwood imports into Finland has increased in the 2000s yet birch pulpwood has remained as the main import assortment.
  • Finnish delivery prices and imported roundwood prices (measured at the border) have not been fully integrated.
  • Import prices (measured at the border) of roundwood from Russia have increased considerably and in some cases have exceeded the Finnish delivery prices.
  • Russian sawnwood has won market shares in the German sawnwood markets, but Finnish sawnwood producers have been market leaders in prices.
  • If the custom tariffs programme for roundwood exports from Russia will become effective, roundwood exports from Russia will collapse, and stumpage prices and loggings will decrease. As a result, Russian sawnwood industry could increase production volumes.
  • Russian wood working enterprises are seeking possibilities to enlarge production for export. This implicates increasing competition in the European markets for wood products.

 

 

Partners

  • FFRI: Dr. Anne Toppinen , Dr. Riitta Hänninen, Dr. Jari Viitanen, MSc. Antti Mutanen
  • Pellervo Economic Research Institute: Lic. Tapio Tilli, Lic. Ritva Toivonen
  • European Forest Institute: Dr. Alexander Moiseyev
  • Skogforsk, Sweden: MSc Sten-Gunnar Skutin

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Publications

  • Toppinen, A., Toivonen, R., Mutanen, A., Viitanen, J., Hänninen, R., Järvinen, E. & Moiseyev, A. 2007. Venäjän raakapuun ja sahatavaran vienti sekä vaikutukset markkinoiden kilpailuun. Julkaisussa: Karjalainen, T., Ollonqvist, P., Saastamoinen, O. & Viitanen, J. (toim.). Kohti edistyvää metsäsektoria Luoteis-Venäjällä - Tutkimushankkeen loppuraportti. Metlan työraportteja/Working Papers of the Finnish Forest Res. Inst. 62: 53-68.

  • Toppinen, A., Toivonen, R., Mutanen, A., Goltsev, V. & Tatti, N. 2007. Sources of Competitive Advantage in Woodworking Firms in Northwest Russia . International Journal of Emerging Markets 2: 383-394.

  • Turpeinen, E. 2007. Roundwood Procurement Channels and Prospects of the Logging Enterprises in Leningrad Region. Master's Thesis. University of Helsinki , Faculty of Agriculture and Forestry, Department of Forest Economics, Forest Products Marketing. 81 p. + appendix.

  • Hänninen, R., Viitanen, J. & Toppinen, A. 2006. Raakapuun tuonnin selvä lasku vaikeuttaisi teollisuuden puuhuoltoa. Metsäntutkimus 4: 33.

  • Toppinen, A., Mutanen, A., Viitanen, J. & Karjalainen, T. 2006. Venäjän metsäsektori muutoksessa. Paperi ja puu - Paper and Timber 88(7): 390-392.

  • Toppinen Anne, Toivonen Ritva, Järvinen Erno, Goltsev Vadim, Tatti Natalia & Mutanen Antti. 2006. Business environment and strategies of wood industry companies in Leningrad and Vologda regions - results from a pilot study. Working Papers of the Finnish Forest Research Institute 41. 47 p.

  • Mutanen, A. 2006. Estimating Substitution in Sawnwood Imports into Germany. Journal of Forest Economics 12: 31-50. (pdf) Hänninen, R., Mutanen, A., Toppinen, A. & Viitanen, J. 2005. Vienti Venäjältä lisää sahatavarn ylitarjontaa Länsi-Euroopassa. Metsäntutkimus 4: 27.
  • Mutanen, A., Viitanen, J., Toppinen, A., Hänninen, R. & Holopainen, P. 2005. Forest resources, production and exports of roundwood and sawnwood from Russia. Working Papers of the Finnish Forest Research Institute 9. 34 p.
  • Hänninen, R., Mutanen, A., Toppinen, A. & Viitanen, J. 2005. Vienti Venäjältä lisää sahatavaran ylitarjontaa Länsi-Euroopassa. Metsäntutkimus 4/2005. s. 27. (pdf)

 

Contact information

jari.viitanen @ metla.fi

 

Funding

 

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   Updated:   15.11.2007/REsk Metla : Project 3384 : Subproject 3   Comments Metla's homepage
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