Russia’s Scheduled 80% Log Export Tax will reduce log exports, disrupt global forest product trade flows and create a supply shortage in China, says the International Wood Products Group, Vancouver, Canada.
It says that higher prices and increased demand will create substantial opportunities in logs, lumber, pulp and other products for a variety of exporting countries to China and other Asian countries in a press release dated October 17.
“Russia’s log export tax is set to increase from 25% to 80%, (or minimum 50 euros/m3 or US$400/MBF, Scribner scale) on January 1, 2009, making Russian logs too expensive and creating a supply shortage for Russia’s key customers in Finland, Japan, China, South Korea and the Baltic States.
“As a result of the pending tax, major wood product companies in Finland and the Baltics have already announced permanent capacity closures in pulp and paper, as well as sawmills and plywood mills.
“The strategies of companies in Japan and South Korea are to find suitable replacement species or products. However, our preliminary analysis indicates clearly that China does not yet have any practical strategy and, consequently, will not have enough wood volume to replace Russian logs and to run all of its factories,says IWP.
The impending supply crunch that will develop within China could be similar to the crisis created by the spotted owl in the US Pacific Northwest in the early 1990s.
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