The use of wood will increase, and the volumes of timber harvesting and trade in Finland will clearly increase in the next few years. Gross income from private forests will start to approach the all-time high from 2018 even next year.
At the same time, the revenue from private forests will rise to two billion euros, says the Pellervo Taloustutkimus PTT’s forest sector forecast.
Labor struggles and the global economic downturn caused by the corona pandemic reduced the Finnish forest industry production and the need for wood last year. Wood use in the forest industry fell by just over seven per cent. The turnaround was felt at the end of last year, and the upward trend continues. The use of wood in Finland’s entire forest industry will rise by four per cent this year and by two per cent next year.
This is due to many changes in industrial production capacity. The closure of UPM’s Kaipola mill in Jämsä will reduce the use of spruce wood by about 300,000 cubic meters, but in return, the start of board production in Oulu will increase the use of softwood fiber even more, by about half a million cubic meters. The start-up of Metsä Group’s Rauma sawmill will again increase the use of logs.
“As the demand for wood grows, logging volumes will also increase by five percent this year. In 2022, investments in the forest industry will increase the need for wood, and market fellings will increase by about four percent, ” says Paula Horne, PTT’s research director.
Increased use of imported wood reduces the need for domestic wood. Finland’s timber imports will increase by a couple of percent this year, and imports account for about one-sixth of the forest industry’s use of raw wood. Russia is the largest importing country with a share of about 77 percent. President Putin’s announcement of a ban on timber exports from the beginning of 2022 would hardly have a significant impact on Finland, as the ban would not apply to birch pulpwood and wood chips. They cover 87 percent of the wood imported from Russia.
The timber trade is growing rapidly in the early part of the year
The timber trade has seen wild growth figures at the beginning of the year, for example, in January-February, the vertical trade volumes of logs were 75–93 per cent higher than at the beginning of last year. This shows the magnitude of last year’s collapse, and the trend will level off towards the autumn.
Trade volumes in pulpwood have also clearly increased compared to the beginning of last year, but the development of trade in pine and birch fibers in particular has been more moderate. The volume of vertical sales for the whole year will be just over 11 percent higher than last year. Next year’s trade volumes will continue to rise five percent from this year’s reading, anticipating the start-up of new production facilities.
The average annual price of logs in vertical stores will rise by as much as six percent this year compared to last year. These developments reflect rising export prices for sawn timber and a recovery in demand. Next year, the average annual prices of softwood logs will continue to rise due to the increase in production capacity. The average annual prices of pulpwood will end up almost four percent higher than last year this year, and the price increase will continue at the same level in 2022.
Carrying income rises to two billion euros
The revival of the timber market is reflected in the wallet of the Finnish forest owner. Last year, gross income from private forests fell by about a tenth to EUR 1.75 billion due to a decrease in the volume of felling and trade and a fall in timber prices.
This year, gross cash income will start to rise as the price of wood and increased logging increase. The increase is 14%, ie gross cash income will rise to two billion euros. Next year, private forest incomes will continue to rise by just under nine percent as logging volumes increase and timber prices rise.
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