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Poland’s wood industry expects a shortage of wood raw materials mainly caused by the current war in Ukraine. 

The Polish Chamber of Commerce of the Wood Industry (OIGPM) analyzed the situation of the wood market in the face of the war in Ukraine. The shortage of raw materials has been talked about for some time.

European sanctions against Russia and Belarus

European sanctions against trade with Russia and Belarus is expected to cause serious disruptions in supply chains and affect transport costs. According to official statistics, almost 10% of sawn softwood consumed in Europe in 2021 came from Russia, Belarus and Ukraine.

In the hardwood sector, oak products from Ukraine constituted a significant amount. In the case of Poland, the scale of the impact will be significantly greater – Belarus has for many years been the largest exporter to Poland of softwood lumber, and Ukraine of hardwood.

Shortage and rising prices

To ensure that the supply gap is at least partially filled, OIGPM thinks it will be necessary to take decisive measures to ensure the security of supplies of raw materials to sawmills.

In the case of Poland, much will depend on the policy of the government and the Polish State Forests, for example in terms of limiting the export of unprocessed raw material. Many wood-based building materials, such as birch plywood, MDF, pellets and lumber, will be severely affected by the shortage. This will in turn have an impact on product prices, which have already risen significantly during the pandemic, leading to higher costs. Poland’s wood companies are already looking for alternatives to replace certain products. Unfortunately, in order to deal with the current situation, the Polish wood sector will need immediate interventions by the government and European institutions to prevent a critical shortage of materials.

Ukraine

Ukraine has been a very important supplier of oak wood to the European market for many years. For Poland, it is the most important exporter of oak lumber, thanks to which Poland is able to partially compensate for the growing demand and prices of this species of wood. In 2021, Ukraine exported 348,000 m³ of oak wood to Europe. Compared to 2020 (nearly 500,000 m3), it was a 30% decrease. This was due to the growing prices of roundwood in Ukraine and the growing demand of local producers, increasing their production capacity and modernizing their plants. More than 70% of all Ukrainian exports went to Germany, Poland and Austria, which imported a total of 252,000 m³ of oak lumber from Ukraine. Due to the high demand and the limited supply of oak wood, such a shortage on the market cannot be easily replenished.

Ukraine – oak lumber exports to European countries in 2020-2021, in m3
Country 2020 2021 Conversion in%
Germany 154,000 122,000 -20.8
Poland 170,000 89,000 -47.6
Austria 58,000 41,000 -29.3
The remaining 117,000 96,000 -18
Total 499,000 348,000 -30.3

Source: National Tax Administration, Holzkurier

In the case of softwood lumber, export shortages from Ukraine seem to be easier to cover. In 2021, Ukraine exported 1.114 million m³ of softwood to Europe. This is 1.7% more than in the previous year (2020 – 1.096 million m³). The main recipient was Hungary (309,000 m³), ​​followed by Italy (184,000 m³) and Germany (136,000 m³). Poland imported just over 72,000 m3.

Import of pellets from Ukraine is of great importance for Poland. Poland was the largest importer of this product – in 2021 the country imported a total of 121,000 tons from Ukraine, which accounted for nearly 30% of all local exports (412,000 tons). Considering that the pellet production volume fluctuates around 1 million t, it is quite a serious loss.

Ukraine – exports of softwood lumber to Europe in 2020-2021, in m3
Country 2020 2021 Conversion in%
Hungary 323 474 308 814 -4.5
Italy 181 630 183 517 1
Germany 119,000 136 176 14.4
Romania 206 258 104 284 -49.4
Poland 75 245 72 254 -4
The remaining 190 246 308 900 162
Total 1 095 853 1 113 945 1.7

Russia

Export sanctions for the Russian timber sector will have a major impact on the global timber market.

The value of Russian wood product exports from this sector amounted to USD 12.2 billion in 2021. Softwood lumber (US $ 5.8 billion) and paper (US $ 2 billion) had the largest share. An estimated 40% of exports went to China, and the vast majority of the rest to Europe. Over the past five years, Russia has supplied China with 15 to 20 million m3 of softwood lumber annually.

In 2021, nearly 4.5 million m3 of softwood lumber was delivered to Europe, 20% more than in 2020 (3.75 million m3). The main customer for Russian softwood lumber is Estonia (966,000 m3 in 2021), followed by Germany (753,000 m3) and Finland (676,000 m3). Poland is not a big partner of Russia when it comes to the purchase of softwood lumber – in 2021 it was 48,000 m3 – but with an upward trend (30,000 m3 in 2020).

In 2021, Russia exported 2.4 million tons of pellets. The main recipient is Denmark – 81% of Russian exports (1.96 million t in 2021)). Belgium comes second – 381,000 t, and the third – Great Britain – 145,000 t.

Belarus

Sanctions against Belarus will have a much greater impact on the situation on the Polish timber market. Belarus exported 2.57 million m3 of softwood to the European Union. The main sales markets were Latvia (747,000 m3), Lithuania (654,000 m3) and Germany (355,000 m3). Poland imported over 216,000 m3 of softwood lumber, and Belarus has been one of the most important suppliers to the Polish market for many years.

A lot of confusion on the European timber market can be expected in the near future. Companies are already looking for new sources of supply. Taking into account the already existing high demand for wood products during the pandemic, as well as the increasing prices of products and raw materials, OIGPM expects further price increases.

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