Export revenue from forest sector products reached 1.70 billion euros in the first half of 2026, almost the same as in the corresponding period of 2025. The reason is market stagnation.

This is the picture given by information compiled by the Ministry of Agriculture from Central Statistical Bureau data. In the first half of 2026 higher export revenue came from energy wood, in particular from exports of wood pellets, veneer, plywood and charcoal, while revenue from exports of sawn timber, particle board and furniture was lower. Total export revenue from the sector’s products fell by about 26 million euros, and imports of forest sector products also fell, from 529.73 million euros last year to 522.62 million euros this year.

“On the whole, export revenue from forest sector products has stayed at the same level for the past three years, even though there are shifts in the range of goods being exported,” says Kristaps Klauss, Vice-President of the Latvian Forest Industry Federation, assessing the overall situation, and noting that in recent years the geopolitical situation has changed, and that its side effects have had a substantial impact not only on the level of demand but also on potential buyers’ ability to purchase the goods and buildings they want.

“Timber processing and further processing volumes for companies operating in Latvia are stable, and their growth depends on the situation in foreign sales markets,” says K. Klauss. He stresses that exports of wood products, their volumes, prices and revenue are directly linked to the construction sector in Europe and worldwide, which is not showing significant growth.

There will be further corrections

In several wood product categories the revenue figure may turn out to be higher still, because “after a while” there will be corrections. At present the data in the section “other wood products (including unclassified)” shows 128.71 million euros, which compared with the corresponding period of 2025 (when it was barely 38.28 million euros) has grown by more than 300%, and this will “move across” to the appropriate sections. After a while the unclassified wood products will add to export revenue from sawn timber, plywood and carpentry and joinery products, and to the total quantity sold abroad. This view rests on past experience, in which the overall figures hold and in fact undergo no significant change, whereas changes do occur once the so-called unclassified wood products are broken down.

Energy gives the forest sector breathing space

2026 began with the coldest weather of recent years, which correspondingly drove up demand and with it the price of energy resources, including energy wood. Frost held for more than seven weeks in Latvia and elsewhere at the start of the year, and this is reflected in export volumes of energy wood and in the money received for it. In the first half of 2026 exports of energy wood “brought” 298.7 million euros to Latvia, 9.6% more than in the corresponding period of 2025, when it was 272.6 million euros. The biggest jump is precisely in exports of wood pellets, which grew from 707.3 thousand tonnes in 2025 to 900.4 thousand tonnes in the first half of this year. The money received for pellet exports accordingly grew from 135 million euros in the first half of last year to 176 million euros in the same period this year, that is by 30.5%. Since the end of February the Strait of Hormuz has been closed, through which crude oil and liquefied natural gas were also delivered from the Persian Gulf states to Europe, and this situation kept, and still keeps, demand for energy wood high.

“The greatest impact on the wood pellet market came precisely from the cold January and February; in January the volume of wood pellet exports was almost three times greater than in the same period last year, that is, this January 223 thousand tonnes were delivered abroad, whereas last year it was only 84 thousand tonnes,” explains K. Klauss. He notes that the large industrial pellet producers in Latvia began 2026 with reasonably large stocks in their warehouses, but these were used up comparatively quickly: by March export volumes had already returned to the level of 130 thousand tonnes.

“The industrial pellet segment differs from the premium pellet market, because it runs on long-term supply contracts which are fulfilled regardless of cold or warm winters and of disruption to natural gas supply chains. At the same time pragmatism prevails in the energy wood sector, and preparations are currently under way for a plan B: what if there is suddenly a winter as cold as the last one, and the Strait of Hormuz is open one moment and closed the next, and there are questions about the availability of natural gas, all the more so when Europe’s gas storage facilities are at their lowest fill level in 17 years,” K. Klauss answers when asked about the situation of industrial pellet consumers. He notes that a quite different picture can be seen in the premium wood pellet segment, whose consumers are households.

“The cold weather, combined with the frenzy in Estonia, Latvia, Lithuania, Poland and elsewhere in Europe, substantially increased demand for premium pellets, but their producers’ capacity is what it is. As a result their warehouses are empty, and what is produced is snapped up within a few hours,” K. Klauss says, illustrating the nuances of the market for pellets used by households. He notes that the frenzy is slowly beginning to subside, and that the smaller producers of this product, working at maximum capacity, will be able to fill existing orders only over the coming weeks, in time for the start of the heating season.

“Households, of course, do not like the fact that the price of premium pellets has risen by an average of 100 euros a tonne, but the product is available, and it has to be borne in mind that production costs have risen too,” says K. Klauss. He draws attention to the fact that imports of wood pellets have grown from 83.1 thousand tonnes to 86.8 thousand tonnes, which is very significant, because consumption of premium pellets in Latvia averages around 200,000 tonnes a year.

“Total pellet production volumes substantially exceed domestic consumption; for the most part it is industrial pellets that are produced, intended for generating heat and electricity, and these do not reach private homes, because they are not packed in small packages but transported in bulk,” explains K. Klauss.

Less roundwood is being exported

The Vice-President of the Latvian Forest Industry Federation takes a positive view of the fall of more than 20% in export volumes of large-dimension timber, that is, sawlogs.

“Unfortunately a fairly large volume, albeit of third-grade sawlogs, is still exported to China, because processors in that country can pay a higher price than most packaging manufacturers in Latvia, and at the same time this is the reason for the fall in export volumes of sawn timber,” explains K. Klauss, acknowledging that export volumes of pulpwood have also fallen, which in turn means that the total volume of timber harvested in Latvia in 2026 will be smaller still than it was in 2025. It should be recalled that export volumes of roundwood will be affected by the decision taken in the Latvian parliament at the end of 2025 to apply the natural resources tax to unprocessed timber. From 2027, unprocessed timber sold outside the EU will be subject to 75 euros per m³, and a year later, from 2028, to 115 euros per m³, which in essence means a complete ban on exporting it.

Exports and imports of forest sector products (million euros)*

* January to June
Source: Forest Department of the Ministry of Agriculture, from Central Statistical Bureau data

Exports of forest sector products* (thousand m³) in the first half-year

* with the largest share
Source: Ministry of Agriculture

Imports of forest sector products* (thousand m³) in the first half-year

* with the largest share
Source: Ministry of Agriculture

Exports of forest sector products* (million euros) in the first half-year

* with the largest share
Source: Ministry of Agriculture