- The volume of exports of companies in the Latvian wood industry sector could decrease in general this year, as well as profits. However, opportunities could arise from non-traditional markets for Latvia, such as the United States, where the demand for lumber is currently on a rising trend.
Kristaps Klauss, Executive Director of the Latvian Wood Industry Federation, is likely to see a decline in the Latvian wood industry exports this year.
He acknowledged that at the beginning of the Covid-19 coronavirus pandemic, in mid-March and early April, the industry faced a worse-than-realistic scenario, namely, the sale was expected to stop, there were no orders, but perhaps the most favorable scenario has been fulfilled.
Klaus explained that orders for the Latvian wood processing companies are now longer for a longer period of time, including many companies with orders two or three months ahead. Similarly, while construction in the United Kingdom was initially expected to resume only in June, activity resumed in May and there is currently a relatively large deficit in certain product segments.
Also, according to Klaus, there are opportunities for good sales of Latvian wood industry products in the US market, thus reducing competition in the European market, where Latvian wood processing companies operate.
“This year, due to many coincidences, the United States has record prices for softwood lumber and the market is extremely active,” he said.
He predicted that this year the volume of exports of companies in the Latvian wood industry sector could decrease in general, as well as there will be no significant profit for companies in the sector – at best, companies will have a small profit.
Mr Klaus said the industry would be affected by frozen future plans in the short and medium term.
He also added that the biggest challenge for the Latvian wood industry in the coming months could be the second wave of the Covid-19 pandemic, and that at the end of the year there will be additional challenges related to bracket. “From the point of view of the sale of wood products, there is no huge difference whether the United Kingdom withdrew from the European Union (EU) with or without an agreement. There are no significant differences in import duties in the United Kingdom.
The Latvian Timber Industry Federation was founded in August 2000, uniting separate forest industry associations to work together on the development and competitiveness of the forestry, timber and furniture industries in Latvia.
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