Kristaps Klauss, Executive Director of the Latvian Forest Industry Federation (LKF), explained that the primary cause for the price rise can be traced back to Finland, when strikes began at the end of the year before last. First, employers went on strike, followed by employees.

"As a result, a portion of the timber that should have been produced was partially removed and never produced. Both supply and demand were disrupted at both ends. If we consider it, half of a log goes into planks, while the other half goes into woodchips, sawdust, and bark."

"When this balance was disrupted—meaning the planks were not produced, but at the same time, the chips and sawdust were not consumed—it led to a situation where some products have an extremely high price, while others are difficult to sell. For example, it is currently extremely difficult to sell half of a log, i.e., the chips and sawdust, on the market," Klauss admitted.

Then came the pandemic caused by Covid-19 and the subsequent crisis; both buyers and sellers were frightened. Specifically, timber product buyers stopped purchasing and reduced the volume of products in storage, while manufacturers reduced production capacity, thereby further suppressing production volumes.

"But the Covid-19 crisis, at least in the timber market, turned out to be shallower than expected beforehand. Consumption recovered very quickly, but production was unable to keep up with it."

For example, in the USA, a new record for new house construction was reached last December. The British construction market is also very active and consumes a great deal of timber," said the LKF executive director.

Klauss emphasised that the crisis caused by Covid-19 is not equally severe in all sectors, and therefore not everyone is experiencing financial difficulties during this time. Those whose incomes did not decrease had no opportunity to spend money on services, such as tourism and entertainment. In addition, they gained time to dedicate to home improvements.