RBC Daily: “Finland threatens to replace birch-trees with eucalyptus”
Russia will not raise round timber export duties.
Prime Minister Vladimir Putin told the third Russian-Finnish Forest Summit that Moscow would not raise round timber export duties in 2010. The decision not to charge prohibitive export duties is linked with plunging demand for timber. The prime minister said current duties could be retained throughout 2011, unless the global-market situation improved.
The Russian side's statements may influence the stand of Finland, which threatened to oppose Moscow's accession to the World Trade Organization (WTO) in case prohibitive round timber export duties were introduced.
Although Moscow planned to raise round timber export duties from 15 to 50 euros per cubic metre in early 2009, the decision was put off until January 2010 because of the global financial and economic crisis.
The Finnish side harshly criticised restrictive round timber duties and made it clear that Helsinki's stance on Russia's WTO accession depended on the settlement of this issue.
Opening the third Russian-Finnish Forest Summit, Vladimir Putin said the moratorium would be extended for another 12 months, and that current duties might be retained throughout 2011. "We will make the relevant decision later," he added.
The prime minister hopes that foreign investors setting up production facilities in Russia will use this delay effectively, and that they will not ask the government to extend the moratorium each year.
Mr. Putin stressed that Russia had no intention of completely renouncing round timber export duties. "I am warning you that we will take this step anyway," he said, and added that it would now be wrong to modify the relevant strategy with regard to those investors who have started establishing timber processing facilities in Russia.
According to the prime minister, Russia was ready to expand the range of duty-free timber exports. "We believe it is possible to expand the parameters and volumes of timber supplies," he said and reminded the participants about duty-free exports of round birch timber less then 15 cm in diameter.
Finnish Prime Minister Matti Vanhanen said the decision not to raise timber export duties could have a positive influence on the development of the timber sector. He believes Russia and Finland should cooperate on the issue of preserving the potential of northern forests. He said the timber sector had recently started developing actively in Latin America, that eucalyptus trees grew five times faster than birch-trees and were therefore cheaper.
Ilim Group Chairman Zakhar Smushkin is confident that the customs duty issue is important only for border regions in conditions of crisis. "Given the profound recession, the customs issue is by far not the most important one," Smushkin said.
He said timber production in Russia had plunged by 20% during the crisis, and that paper, cardboard and packaging output had declined by 6% and 9%, respectively.
The world is posting similar recession volumes. Jussi Pesonen, CEO of UPM, Europe's leading plywood manufacturer, said paper demand in Europe and North America had plunged by 20% during the crisis. Kari Jordan, President and CEO of Finnish wood-processing group Metsaeliitto, said timber exports to Finland had earned Russia 7 billion euros in the past 15 years.
Andrei Zhukov
