Russia will completely ban the export of logs from January 1 of 2022
Russia will completely ban the export of logs from January 1 of 2022. From January 1, 2022, Russia will completely ban the export of unprocessed coniferous forest logs.
The Kremlin has made more than one proposal to ban the export of logs, but for various reasons, it has never been implemented.
Although this proposal, or even the current increase of 60% of tariffs, is a catastrophic blow to the Russian timber industry, the implementation of this measure is ironclad. It is not only the local Russian timber companies that have been hit, but also a large number of Chinese timber mill companies.
Over the years, a large number of Chinese businessmen from Northeast my country, Shandong, and Singapore have set up timber factories in St. Petersburg, Siberia, and the Far East. They have made a lot of money because of cheap labor and abundant forest resources.
And where the ban is about to be implemented, where will they go?
Russia will ban the export of coniferous and valuable hardwood logs from Russia on January 1, 2022, and prepare a legislative and regulatory framework to set strict barriers to uncontrolled exports of unprocessed timber.
In addition, a preferential loan program has been implemented from January 1, 2021 to promote the modernization of the wood processing industry and promote the upgrading of the Russian wood processing industry.
The Speaker of the Council of the Russian Federation, Valentina, proposed a complete ban on the export of logs during the enactment of the new Forest Law at the beginning of last year, but this idea did not receive the support of the Russian government. In November 2017, Russian Minister of Natural Resources Dmitry recommended to stop exporting logs timber to China (China accounts for 70% of Russia’s timber supply).
At present, Russia imposes export duties on logs, and the tax rate has risen to 80% after exceeding the specified quota.
After Russia joined the World Trade Organization (WTO) in 2012, it has implemented an export quota policy. The quota is only used by log processors. Within this framework, tariffs have been reduced to 6.5%. After exceeding the quota, the tax rate will rise to 80% by 2021.
Therefore, according to the data, the amount of timber harvested in ten years has increased by 27%, reaching 212.4 million cubic meters in 2017, while the volume of log exports has dropped three times since 2006, and fell to 19.4 million cubic meters in 2017. China’s exports have fallen from 23 million to 13 million cubic meters.
In the Far East, timber exports are subject to the strictest restrictions. At the beginning of this year, members of the Dalexportles Association (52% of the timber harvested in the Far Eastern Federal District and 80% of timber processing) proposed to suspend the increase in export tariffs because of the massive decline in timber exports. Tariffs increased by nearly 28% in 2019. According to the association, the export tax on logs of conifers in the Far East should be 6.5%.
In Siberia, the Governor of Tomsk Region requested that timber exports to China should not be restricted. Because with the rapid growth of my country’s construction and furniture industries, there is an extremely high demand for wood products. If exports are completely banned, Russia will lose its vast Asian market and transfer to other countries.
There are more than 600 wood processing companies in the Tomsk region, and most of them have the participation of Chinese businessmen. Where will they go?
Wood industry products accounted for 50.2% of Tomsk region’s total exports. Since 2015, the export volume of unprocessed timber has decreased from 51,400 cubic meters to 5,800 cubic meters per year.
The main exporter of products is Uzbekistan, followed by China. This will have a serious impact on companies that still export whole logs.