Russia this year introduced a major increase in export tariffs on round timber in a bid to boost domestic processing. By next year, the export tariff will amount to 50 EUR per cubic meter, a 100 percent increase compared with last year. Now, figures from the Republic of Karelia — one of the former main timber export regions – show that processing is not flourishing as intended by Moscow, but rather experiences negative growth. According to Regnum, regional First Deputy Minister of Forestry in the Republic of Karelia confirms that timber processing in the region is falling and that the negative growth is expected to increase in the period ahead. While pulp and paper production in the region the first half of the year increased 1,9 percent, the growth has been reduced to only 0,3 percent seen over the last nine months. The situation is worse in timber processing where the decline amounts to 16 percent year-on-year. The drying-up timber exports to Finland might now put the regional industry in crisis. A major part of the industry remains hesitant towards extend operations in Russia. As a matter of fact, a number of companies are strongly against the higher export tariffs imposed by Moscow. Head of the Karelian Union of Forest Industry and Forestry Exporters, Nikolay Bobko, recommends his member companies to address federal authorities with a request to drop the increase in export tariffs, at least on deciduous forest which is hardly used in Russia.
