The situation in the forest sector of the countries in our region is becoming quite dramatic. Not only in Latvia and Estonia, but also in Finland, problems are visible which, although different in each country, are increasing overall. Timber prices in Finland remain surprisingly high. The timber market remains, and will continue to be, tight. Furthermore, the new European Union regulation is causing nervousness among industry participants.
In general, it can be said that the Finnish forest sector is currently faring poorly, as timber prices have still not normalised. Representatives of Finnish banks, who also manage forest funds, point out that in this economic cycle, timber prices have not reacted to the downturn in the usual way. Forest funds have made their first timber purchases for the coming year. The conclusion – timber is still being traded at surprisingly high prices.
As timber imports from Russia were halted in 2022, the situation in the Finnish timber market became noticeably more acute. Previous imports have been partly replaced by local timber and a relatively small volume of timber from Sweden and the Baltic states. Consequently, competition for timber as a raw material is fierce, as more and more wood is also being used for energy purposes. At the company Metsäteollisuus, they point out that as much timber is now being burned annually as was previously consumed by a medium-sized pulp mill. Finnish foresters, naturally, hope that more timber will be diverted to processing.
It should be noted that new mills are being built in Finland, which compete additionally in the raw timber segment, and it is not efficient to transport it to Finland from afar. Representatives of Finnish banks associated with the industry predict that the timber market in the Baltic Sea region will continue to be very tight.
Some experts predict that transport costs for timber will fall next year. The Finnish forest owners' organisation believes that the gloomy forecasts may yet prove incorrect; its representatives emphasise that as the situation in the sector improves, many lucrative opportunities will emerge for forest owners. Forest owners sell timber at auctions and, with the help of forestry organisations, search for the best buyers, securing the most advantageous result for themselves. As for forest owners, their situation is by no means as dramatic. A cold and early winter is also good news for forest owners, as many felling sites can be accessed when the ground is frozen.