Russia is one of the largest exporters of lumber and forestry products worldwide. As a result of invading Ukraine back in February 2022, the prices of lumber have increased and the global forestry product market has been affected globally. This seriously harmed worldwide recovery efforts after nearly two years of pandemic and created a plethora of problems for construction companies in various countries.
But how does this war affect the production and delivery of lumber and forestry products? And what forest-related products are becoming scarce and more expensive? Keep reading to find interesting insights in this article.
Russia Is the Seventh Biggest Exporter of Forest Products
As Russia stretches over vast territories of forested land, it has become an important exporter of lumber and forestry products in the last decades. This is a good thing, but the war is seriously disrupting these exports and making forestry products less available to companies that really need them. This is also what causes a surge in lumber prices and significantly slows down construction industries in various countries.
Exports of Paper Products Could Decrease Significantly
Paper products are vital for companies all over the world. Just in 2021, the paper product exports coming from Russia were valued at nearly $2 billion and this number was expected to increase. As a result of the invasion, it’s expected that these exports take a downward turn as more resources are concentrated on military efforts to occupy Ukrainian territories. Other Russian exports include wood panels and pulp, softwood and hardwood logs as well as wood pellets. All these products were valued at billions of dollars in 2021.
Western Sanctions Might Limit Exports Even Further
The United States and European Union have imposed drastic sanctions on Russia as a result of invading Ukraine. This was necessary to limit the amount of revenue Russian companies receive as some of this revenue could be used to finance the war. In return, it’s expected the Russian government to limit its exports of forestry products to the United States, European Union and other countries.
China and India Could Receive Forest Products from Russia
It is estimated that nearly 60% of Russia’s exports of lumber and forestry products were delivered to the United States and various European countries. As many of these countries have imposed sanctions on Russia, it’s believed that the Russian government might shift gears and redirect these exports to China and other countries that haven’t imposed restrictions yet. This could affect the global forest product market even more and cause serious problems for construction companies in the United States, European Union and other countries.
As you can see, the war in the Eastern part of Europe has significant consequences worldwide and that’s why the prices of lumber and forest products are increasing. One way construction companies might go around this problem is by prioritizing available resources for more important construction projects, at least temporarily. Contact US Framing today to learn more about lumber prices and see how we can help with your construction project.