Huge demand in the USA and China has led to a 30-50 percent increase in raw material prices in Poland. Even unprocessed wood flows from Poland to other countries, and especially to China
In recent months, wood prices have soared, which has hit many important industries in Poland, from construction to the furniture sector, which is important for domestic exports. Worse, the galloping prices do not want to stabilize, Polish industry representatives complain.
Marek Kubiak, president of the Polish Chamber of Commerce of the Wood Industry (PIGPD) and owner of sawmills in Pomerania, claims that prices in Poland are rising at a dizzying pace, because the global factors have been additionally influenced by domestic conditions, such as the exceptional situation in the construction industry, which requires a lot of wood, but also mistakes in distribution of the raw material obtained in the State Forests. For years, the industry has been demanding a more flexible and transparent system of selling raw materials from the State Treasury’s forest resources, managed today by foresters.
”Poland is too small of a player and practically does not count as a direct exporter of wood to the American market, but German, Austrian or Scandinavian raw material tycoons are doing big business in the USA today and transfer this huge wood suction to their neighbors on the Vistula River. When last year’s Covid crisis triggered a construction boom in America, large supplies of raw material were contracted in Western Europe. Today, the demand from across the Atlantic is double-edged in the European Union and, at the same time, is pushing up prices in Poland to absurd levels,” says the president of the PGIH.
This is confirmed by American statistics: the average cost of building a new home in the United States US$ 36.000 dollars, primarily due to the rising cost of lumber. Earlier neglect and lack of rational management of construction timber are being avenged in the United States. After many years of low prices, the supply of raw materials in the US was limited and sawmills closed.
The unexpected boom did not come until last year as the pandemic and lockdowns favored repairs, renovations and the purchase of larger homes. The severely limited supply in the entire wood supply chain meant that wood futures contracts, which currently reached a record price of $ 1,260 for 1,000 so-called timber futures. plank feet, over $ 800 exceeded the average price of the last five years.
Whole trunks go to China
”In my plants in Pomerania, you can clearly see how huge amounts of roundwood are reloaded daily from trucks into containers previously emptied in our ports with Chinese goods. Kubiak does not hesitate to use strong words to describe the completely unrestricted export of unprocessed Polish wood to China. Either rational thinking fails us, or it’s just sabotage. After all, roundwood is not allowed to be exported from itself not only by the entire European West, but even by Belarus and Ukraine, and Russia has already announced the ban next year,” says the head of the PIGPD. ”With us, intermediaries in the sale of untreated wood still have full freedom, although it only weakens us economically, takes bread from native wood-makers and does not protect, and even less does not create jobs” complains Kubiak.
The Polish Chamber of Commerce for the Wood Industry estimates that commercial companies whose activities are limited to organizing purchases in forest districts, transporting raw material to ports and accounting for transactions, ship at least 4 million cubic meters of roundwood annually from the country.
And China’s enormous and fast-paced industry is swallowing everything. There is no limit to pine, spruce and beech trees. Asian buyers in the last year do not take into account the price at all. For a cubic meter of raw spruce, priced at an auction in Poland at PLN 250/m3 (EUR 56/ m3), they pay 350 PLN/m3 (EUR 78/m3) or more without blinking an eye.
Raw material prices weaken the Polish furniture industry
The effects of the increases in prices of wood in Poland are felt more and more acutely by the furniture industry, known as the national export locomotive. Despite the crisis related to the pandemic, lockdowns, closing and reopening borders, huge uncertainty in business, Polish furniture makers have recently defended their second position, after China, among the largest global exporters, over EUR 8.9 billion in 2019 and sixth position in among the leading manufacturers of home appliances.
Michał Strzelecki, director of the Polish Chamber of Commerce of Furniture Manufacturers, sees a serious threat in the uncontrolled growth of wood prices. Although solid wood does not play a major role in domestic furniture, where box and upholstered products are the most important, the current increase in raw material prices can be seen in huge bills paid for chipboards. Furniture board factories raised the prices of their products by as much as 60-100 percent. – Polish economic furniture that is conquering the world is a low-margin product to a large extent. Soaring wood prices will undoubtedly weaken the economic foundations of the business and lower its profitability. And this means cutting expenses on investments, modernization of technology and replacement of machines, adds Michał Strzelecki.
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