Climate change, the corona crisis and difficult market conditions have put Austria’s forest industry in a difficult situation and are making increasingly hard for forest owners to work without losses. A very dry spring was followed by the urgently needed rainfall in summer and autumn, but it has only helped with a somewhat more relaxed bark beetle spread. In addition, the Austrian sawmills cut production in the spring due to the corona crisis. Demand fell accordingly and the more difficult processing conditions and labor shortages caused by the lockdown did the rest.
“On the one hand we are dealing with rising costs for bark beetle control, reforestation, forest hygiene etc. and on the other hand with falling wood prices, which are currently at a historically low level. In addition, the demands of society on the various forest functions are increasing massively. Achieving sustainability is no longer possible under these difficult conditions. Numerous forestry companies will report losses this year with pure forest management,” summarizes Felix Montecuccoli, President of Land & Forst Betriebe Austria.
While at the beginning of 2020 – i.e. before the COVID-19 pandemic – a slight upward trend was discernible (March: € 71.2 / m3), roundwood prices have been falling again since the corona crisis (September: 62,2 € / m3). “We currently have an annual average price (January to September 2020) of € 66.8 / m3. In the 3rd quarter of 2020, the sawlog price index fell below the 100% mark for the first time since 2009. A small ray of hope is that a price increase is forecast for the fourth quarter, the order books of the sawmill industry are full and they have also announced major investments, ”explains Montecuccoli. “
Longer-term forecasts show that softwood lumber will continue to be in great demand worldwide. The problem is that supply bottlenecks are expected at the end of the year. “Domestic wood is available in sufficient quantities, but the bottleneck is the delivery capacity. The current wood deliveries can hardly be covered with the conventionally available freight capacities, ” said Rudolf Freidhager, board member of the Austrian Federal Forests (ÖBf) on the current situation.
The daily freight volume of the Autrian federal forests has almost doubled in the last few weeks, goods stored in wet storage facilities were sold in a very short time. “We are reaching the limits with the available capacities and domestic carriers. Additional freight forwarders were temporarily commissioned in order to be able to cope with the capacities, ”says Freidhager. “Of course – we are in the EU – freight forwarders from neighboring countries can also be commissioned, although we usually work almost exclusively with regional freight forwarders.”
According to media reports, the transport union had voiced allegations of social dumping and tax evasion. Specifically, a Croatian freight carrier has been commissioned to carry out timber transports within Austria. The ÖBf, however, emphasize their strong efforts to ensure the supply in accordance with EU law.
The post Record low wood prices in Austria due to bark beetle and corona crisis appeared first on Timber Industry News.