Russia's invasion of Ukraine and the Western sanctions that followed could push up the prices of industrial roundwood and timber by more than 3% over the next ten years. The conflict's impact is unlikely to change over the long term. Most wood product prices will return over the next 10-30 years to the level they were at before the invasion.
This is shown by a study carried out in 2024, “The expected impact of the Russian invasion of Ukraine on global forest product markets”, published by the journal Forest Policy and Economics. The study forecast global timber trade under two scenarios – one in which the invasion did not take place, and another examining a situation in which sanctions continue.
“In the short term, which we define as ten years after the end of the invasion, our model predicts price increases of up to 3%, for example for industrial roundwood and timber,” said North Carolina State University Associate Professor of Forest Economics and Policy Rajan Parajuli.
"Russia is one of the largest producers of forest products. It supplied these products to many parts of the world, so the sanctions against Russia are being felt very keenly. Account must also be taken of the situation in Ukraine, where military operations make timber harvesting impossible."
Describing the study's findings, Professor R. Parajuli noted that Russia is well placed to regain most of its share of the global timber market in the coming decades.
“Looking ahead to 2050, the study's model predicts a lower overall level of disruption, because Russian timber markets will recover,” R. Parajuli emphasised
Rajan Parajuli was one of the researchers in a group made up of scientists from both North Carolina State University and the US Forest Service's Forest Products Laboratory. The study set out a baseline assumption that the conflict would end in 2025; on that basis, global markets were forecast to begin returning over the next 10-30 years to the level they were at before the invasion. Despite the lower overall level of negative change forecast in the long term, the researchers did not expect that some smaller product markets would ever return to exactly the state they were in before the sanctions period. Professor R. Parajuli noted that a number of problems may persist for longer still, even after the conflict ends.
"In the study we concluded that products made in Russia and Ukraine, such as wood-based panels, paper and cardboard, may not return to the market. These are not large markets; our study's model predicts that if those countries are unable to produce these products for a few years, producers of the equivalent products in other countries will move into the segment," R. Parajuli emphasised. The study concluded that sanctions will result in higher prices, which the researchers forecast will prompt increased production in other resource-rich countries – the USA and Canada, and also China and other Asian countries that will want to sell while the price is high”.
It should be stressed that a year has passed since the study was published and, with the war continuing, we see no change in the situation. At the beginning of April 2025, the Russian leadership emphasised that Russia's timber production and trade volumes are expected to grow.
As is well known, because of sanctions Russia has lost more than 30% of its export market, and the companies working in its supply chains hope to return to the situation that existed before the sanctions were applied.
Russia's timber industry, once valued at 20 billion US dollars a year, still has very good growth prospects. So claimed the Russian leadership, which at a meeting in mid-April discussed the timber industry. It was stressed that the forestry sector has good prospects and large reserves. During the video conference, three processing plants were brought into operation – a particleboard plant in Kaluga, a decorative laminated paper-plastic plant in the St Petersburg region, and a liquid food packaging plant in Moscow.
This assessment was made against the background that Russian transport companies have already begun to cut their costs for transporting timber. Russian companies are preparing for the possibility that Western countries could return as Russia's partners in the market if a truce is signed with Ukraine. The Russians hope that the sanctions which restricted more than 30% of Russia's wood product export markets will be eased. Last year a considerably smaller volume of Russian roundwood was carried by rail across Eurasia, and Russian timber companies turned to supplying the domestic market.
Where forestry is concerned, Russia is also facing other problems this year. Russia is the world's most forest-rich country, with roughly 20% of all the world's forest area within its territory. According to Russia's minister for civil defence, emergencies and natural disasters, forest fires are at present (in April this year) raging in more than 69 different Russian regions. According to the Aerial Forest Protection Service, more than 680 wildfires have been recorded in the Russian Federation since the start of the year, covering a total area of more than 178,000 hectares. That is considerably more than last year. Fire-fighting is, of course, hampered by a catastrophic shortage of equipment and personnel.
https://www.sciencedirect.com/science/article/abs/pii/S1389934124001552
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