Elena Feditchkina Tracy, Alexey Lankin
Analysis of Timber Exports
from the Russian Far East in 2015
WWF-Russia
Elena Feditchkina Tracy, Alexey Lankin
Analysis of Timber Exports
from the Russian Far East
in 2015
Vladivostok
2016
Feditchkina Tracy, Elena
Analysis of Timber Exports from the Russian Far East in 2015. / E. Feditchkina Tracy, A. Lankin. —
Vladivostok: WWF-Russia, 2016. — 44 p., color illustrations
This work offers an analysis of timber and wood product exports from the Russian Far East for the year 2015. It
examines the basic parameters of timber exports, export destinations, major export patterns, and target markets. The
analysis also includes ranking the leading wood product importers in the Far East, investigates the export structure and
quality of timber processing and considers the possibility of expanding product variety. Particular attention is given to the
Chinese market, the largest market for timber from the Russian Far East.
© WWF Russia, 2016
The publication is supported by WWF-IKEA
Forest Partnership
This publication is not for sale and is distributed free of charge
Table of Contents
1.Background..................................................................................4
2.Methodology.................................................................................6
3.Results.........................................................................................8
Timber origin.....................................................................................................9
Export routes.....................................................................................................9
Leading importers of wood products from the Russian Far East.................. 10
Wood product exports..................................................................................... 17
4.Target markets........................................................................... 22
China’s timber market.....................................................................................22
Japan’s timber market....................................................................................27
South Korea’s timber market..........................................................................28
5.Export of high value timber........................................................ 29
High value lumber producers.........................................................................33
Export of linden...............................................................................................36
6.Exports of FSC-certified timber.................................................. 39
7.Conclusion................................................................................. 43
Table of Contents
3
1. INTRODUCTION
T
his work builds on earlier research, published in 2015, on timber exports
from the Russian Far East between 2004 and 20141. Current conditions
in the Russian Far East forestry sector are largely determined by its strong
export orientation: insignificant domestic demand encourages the export of
virtually all forestry industry output to neighboring countries in East Asia. This
paper covers the basic timber export parameters as of 2015 as follows: export
destinations, major export patterns, and target markets. Particular attention is
given to the Chinese market, the largest market for timber products from the
Russian Far East. It includes ranking of leading wood product importers in
the Far East and lists their market shares and pricing policies. In addition, it
investigates the Russian Far East timber export structure and issues related to
the quality of timber processing while suggesting the possibility of expanding
timber product variety. The latter could ultimately promote more responsible
forest management and reduce logging pressures in Russian Far East forests.
Similar to previous research, exports of valuable woods, such as Manchurian
ash (Fraxinus mandshurica), Mongolian oak (Quercus mongolica) and Amur,
Manchurian and Take linden (Tilia amurensis, T. mandshurica and T. taquetii),
are analyzed separately, due to their high environmental and social value. In
2015, Mongolian oak supply chains from the Russian Far East attracted the
attention of experts because of the penalty imposed by the U.S. legislature on
Lumber Liquidators, the largest U.S. flooring provider, for importing illegal
timber from the Russian Far East via China. The penalty totaled US $13 million
in fines — the largest penalty ever charged for violating US timber export
regulations. Lack of transparency in the supply chains and persistent problems
with illegal logging of valuable tree species elevated the risks for European and
U.S. importers who work under increasingly stringent legislation demanding
evidence of legal timber origin (the Lacey Act in the U.S., the European Union
Timber Regulation (EUTR), etc.). Today, the lion’s share of products made
of high value timber of Russian Far East origin (99%) are supplied to China,
where they are processed and occasionally forwarded to target markets. The
research shows that less than 1% of Mongolian oak logged in the Russian Far
East is harvested by companies certified by the Forest Stewardship Council
(FSC), which creates additional barriers for diligent western importers. Due
to the lack of certification and insufficient transparency in the supply chains,
products made of high value timber harvested in the Russian Far East will
remain too risky and hence be less competitive beyond China. The demand for
legality and environmental compliance in China is not very high, although the
growing purchasing power of Chinese consumers may eventually increase their
willingness to pay for products produced under higher environmental standards.
In addition, logging rates of linden trees continue to increase each year in
the south of the Russian Far East, causing serious concerns. Calculation of the
roundwood equivalent of linden timber export volumes clearly shows a steep
1
Timber exports from the Russian Far East in 2004-2014 / B.D. Milakovsky, E.A. Fedichkina. — Vladivostok: World Wildlife Fund
(WWF), 2015. — 36 p.
4
Analysis of Timber Exports from the Russian Far East in 2015
increase in linden harvest volumes to levels well above those officially permitted.
The overwhelming majority of linden exports — 99% — go to China.
The share of FSC-certified timber is shown separately in the analysis. In
2015, approximately 28—31% of timber exported from the Russian Far East was
harvested in forest concessions certified by a forest management certificate of
the Forest Stewardship Council (FSC FM). FSC-certified forests cover 17% of
the total forest area in the Far Eastern region, a volume largely accounted for
by the two largest logging companies, RFP Group Holding and the Terneyles
Group. The latter is the region’s leading company in value-added wood product
exports and perhaps the most competitive company of the Russian Far East in
international timber markets.
However, the overall the quality of timber products exported from the
Russian Far East generally remains relatively low and requires further
processing to the end-use stage. In fact, the current export pattern represents
an attempt by regional timber businesses to comply with unprocessed timber
export restrictions. Further development of the value-added wood processing
industry in the Russian Far East can be encouraged not only through government
policies and public investment but also through the promotion of Russian timber
products in overseas markets by making these products more competitive.
Building a positive image in international trade and capital markets while
ensuring the transparency of supply chains is a prerequisite for the sustainable
development of the export-oriented forestry economy of the Russian Far East.
Introduction
5
2. METHODOLOGY
T
he analysis of wood product exports from the Russian Far East is based on
the product codes used in 2015 customs statistics (Table 1).
Table 1: Timber product codes used in customs statistics
FEACN
(Customs Commodity Code)
Description
4401
Fuel wood, wood chip
44032
Coniferous roundwood
44039
Deciduous roundwood
44071
Coniferous sawnwood
44079
Deciduous sawnwood
4408
Veneer
4412
Plywood
Customs data from the Russian Far Eastern Customs Service were used in the
analysis. Because the primary task of the analysis was to explore the impact
of exports on the logging volumes of various tree species in the Russian Far
Eastern forests rather than an evaluation of export revenues, physical (cubic
meters) rather than monetary indicators were used.
To make the results comparable with those of the earlier analysis (Milakovsky
and Fedichkina, 2015), a similar methodology of data classification by groups
(types) of tree species (1) and by degree of wood processing (2) was used as
follows:
(1) Coniferous (larch, fir, spruce, pine)
(2) Valuable hardwoods and valuable deciduous softwood (ash, oak, linden,
and elm)
(3) Ordinary deciduous softwood and other unidentified species (birch,
poplar and aspen)
(4) Fuel wood and wood chips.
The new analysis contains a new category of products, “4.1, fuel wood and
wood chip,” which represents promising timber export products based on a
more comprehensive use of all forest benefits and addressing the challenge of
utilizing full harvest volumes, the residual of processing and low-value smalldiameter wood.
The second classification is based on the degree of processing on a scale of 1
to 3, where:
(1) unprocessed wood (FEACN code 4403)
(2) sawn wood (FEACN code 4407)
(3) processed wood products, such as plywood, veneer, wood particle board
and oriented strand board.
Particular attention is given to exports of Far East linden from Primorsky
Krai, which have shown steep growth in recent years, despite the limited
permitted harvest of linden, which are the major nectar-bearing plants.
6
Analysis of Timber Exports from the Russian Far East in 2015
Table 2. Classification of product types by tree species and degree of processing
Unprocessed wood
Lumber
Processed wood
Coniferous
Tree species
1.1
1.2
1.3
Valuable hardwoods
2.1
2.2
2.3
Valuable softwood
3.1
3.2
3.3
Wood chips
4.1
4.2
4.3
Roundwood equivalents of timber export volumes were calculated to further
compare obtained data with the harvest allotments. Average yield factors used
to calculate the roundwood equivalents were the same as in the earlier research:
0.56 for sawn wood, 0.7 for plywood. Additionally, 1.13 was used as a bark
adjustment factor, as bark is not included in the estimated roundwood volume
of exports.
Methodology
7
3. RESULTS
I
n physical terms, the total volume of wood product exports from the Russian
Far East has declined by approximately 3% compared with the previous year:
from 8,294 thousand m3 to 8,064 thousand m3 (Table 3).
Table 3. Wood product exports from the Russian Far East by product categories, m3
Category
2013
1.1 Coniferous roundwood
1.2 Coniferous sawnwood
1.3 Coniferous plywood and veneer
2.1 Valuable roundwood
2.2 Valuable sawnwood
2.3 Valuable plywood and veneer
3.1 Softwood roundwood
3.2 Softwood sawnwood
3.3 Softwood plywood and veneer
4.1 Fuel wood and wood chip
Total
4,554,837
1,158,365
302,303
321,641
458,518
9,841
661,282
15,355
4,295
232,294
7,718,731
2014
4,899,966
1,010,761
228,554
388,183
444,472
11,742
881,059
15,181
11,677
402,601
8,294,196
2015
4,627,843
1,095,729
271,478
288,038
533,954
16,824
982,946
14,612
23,656
209,356
8,064,436
The 2015 decline largely resulted from a drop in unprocessed timber — the
largest category of exports. In 2014, the export of unprocessed coniferous sawn
wood declined by 5%, while that of unprocessed valuable hardwoods declined by
26%. At the same time, exports of unprocessed timber produced from softwood
deciduous species grew by 12%.
In 2015, the structure of timber exports did not show any substantial change.
Unprocessed timber continued to account for nearly 3/4, or 73%, of exports
(Table 4).
Table 4. Wood product exports from the Russian Far East by product category, %
Category
1.1 Coniferous roundwood
1.2 Coniferous sawnwood
1.3 Coniferous plywood and veneer
2.1 Valuable hardwood
and softwood roundwood
2.2 Valuable sawnwood
2.3 Valuable plywood and veneer
3.1 Softwood deciduous roundwood
3.2 Softwood deciduous sawnwood
3.3 Softwood deciduous plywood
and veneer
4.1 Fuel wood and wood chip
Total
8
2013
2014
2015
59,0
15,0
3,9
4,2
59,1
12,2
2,8
4,7
57,4
13,6
3,4
3,6
5,9
0,1
8,6
0,2
0,1
5,4
0,1
10,6
0,2
0,1
6,6
0,2
12,2
0,2
0,3
3,0
100
4,9
100
2,6
100
Analysis of Timber Exports from the Russian Far East in 2015
At the same time, the shares of coniferous sawnwood, coniferous plywood and
veneer, and valuable hardwoods in total exports slightly increased relative to
2014. Since 2013, the export volumes of plywood and veneer made of valuable
woods, softwood deciduous roundwood, and softwood deciduous plywood
and veneer have increased every year, demonstrating stable demand for these
products. A negative trend over the last three years has characterized exports
of softwood deciduous lumber, although the decline is insignificant in volume.
The increasing share of wood products in exports, primarily of sawnwood
produced from top-quality roundwood, not accompanied by a corresponding
increase in exports of wood processing residuals (wood chips), likely signifies an
increase in the inefficient removal of timber from the Russian Far East forests
(Table 5).
Table 5. Roundwood and ыфцтwood exports from the Russian Far East in terms of equivalent amounts of
raw wood, m3
2013
m
8,906,021
3
2014
increase, %
100
Origin of timber
Export routes
m
9,161,641
3
2015
increase, %
2,9
m
9,283,338
3
increase, %
1,3
More than 99% of wood products exported from the Russian Far East (the
exceptions being some deciduous wood products) are harvested and produced
in three Far Eastern provinces — Khabarovsky Krai, Primorsky Krai, and
Amurskaya Oblast (Table 6).
Distribution of wood product exports by region of the Russian Far East
basically corresponds to the geographical distribution of forest types and tree
species in this territory. Khabarovsky Krai, which is covered by larch forests, dark
coniferous (spruce and fir) forests, and — in the south — deciduous and mixed
Korean pine-broadleaf forests, provides more than 80% of exported coniferous
roundwood, over 73% of coniferous sawnwood, and 26% of coniferous plywood.
Primorsky Krai has most of its stock in dark coniferous and mixed Korean pinebroadleaf forests, contributing more than 81% of high value roundwood exports,
88% of high value sawnwood exports, 48% of high value plywood, and 61% of
softwood deciduous roundwood exports. Available felling-area resources in
Amurskaya Oblast include both coniferous and deciduous forests. Evreyskaya
Autonomous Oblast, rich in secondary deciduous forests, exports deciduous
softwood timber and lumber. Virtually no timber exports come from other
regions of the Russian Far East. Thus, by the mid-2000s, Sakhalinskaya Oblast,
a large exporter in the past, had completely stopped exporting its wood products.
In 2015, more than half of all timber exports (except for coniferous plywood
and fuel wood) were delivered via land through terrestrial checkpoints on the
Russian-Chinese border (Table 7). Maritime transportation played a more
important role in the past: in 1998, 85% of timber exported from the Russian
Far East was delivered by boat, as the majority of timber was sold to Japan. With
the dramatic increase in the share of the Chinese market, export routes changed
accordingly in favor of railroad and other inland modes of delivery.
Export shipments of wood products were mostly conducted via Primorye
seaports (Vladivostok, Vostochny, Plastun, and Olga) and the Khabarovsky
seaports of Vanino, Sovetskaya Gavan, De-Kastri, and Nikolayevsk-na-Amure.
Results
9
Major final destinations included the seaports of Japan, South Korea, and the
southern regions of continental China.
Prices of wood products shipped by sea are higher than of those transported
by land for all types of large-scale exports. The price difference amounts to 6%
for coniferous roundwood, 32% for coniferous sawnwood, 112% for high value
roundwood, 65% for high value sawnwood, 50% for high value plywood, 34%
for softwood deciduous sawnwood, and 85% for softwood deciduous plywood
and fuel wood. Two exceptions to this rule were observed in 2015, for coniferous
plywood and softwood deciduous roundwood. The first exception, however, can
be ignored, as that was a one-time-only trial delivery of 88.7 m3. The second
exception can be explained by the fact that softwood deciduous roundwood
from the Russian Far East is of much poorer quality than deciduous wood from
Canada, the U.S. and tropical countries and thus cannot compete with the latter
in the above markets.
Higher prices per cubic meter in the case of maritime transportation are
explained by target markets willing to pay higher prices for more valuable
commodities — Japan, South Korea, and Southern China — as well as by the
more diversified geography of deliveries due to the possibility of direct supply to
customers in a larger variety of countries. Meanwhile, lower purchasing prices
are typical for the limited and well-established pool of large Chinese importers
at the Northeast China-Russia border pursuing coordinated trading and pricing
policies and hence using their monopoly power to bring prices down.
The factors that hinder further development of maritime exports primarily
include logistical problems: a lack of special timber terminals, double
transfers of cargo whenever timber is to be delivered to a seaport by railroad
or if logging areas are at a substantial distance from the sea (with only road
transport available), a lack of river-sea navigation vessels, and competition with
other types of export cargoes, for example, coal, particularly in the seaports of
Khabarovsky Krai.
Leading importers
of wood products
from the Russian
Far East
10
The following review of the largest importers is broken down by various variables
as follows: types of importers (resellers or processing companies), location,
purchase volumes, market shares, prices, and other. The country of a company’s
official registration is shown in brackets after the company name; however,
this does not necessarily reflect the real geographical direction of exports. For
example, J & J WOOD CO., LTD, a leading importer of coniferous roundwood,
is located in Hong Kong, but in the customs declarations it appears as an
importer to China and South Korea, obviously acting as a reseller. SUMITOMO
CORPORATION (Japan) is an importer to both Japan and China.
Names of importers to the inland regions of continental China traditionally
start with the geographical name of the company’s headquarters location. The
name further indicates the company’s basic activity: for example, trade, imports
and exports; economic and trade; forest; wood; etc. With respect to type of
ownership, all Chinese firms are privately owned (joint-stock companies),
occasionally with the involvement of local or regional administrations. They are
set up either to replace national foreign trade/international business associations
that operated during the period of state foreign trade monopoly (i.e., through the
late 1990s), as is the case with wood import businesses, or to replace national
(provincial, district) integrated logging and lumber enterprises that were later
privatized and incorporated, as is the case with forest management and timber
processing businesses. Therefore, the names of Chinese import businesses are
in some degree indicative of Russian Far East timber flow distribution to China.
Approximately 3/4 of coniferous roundwood and 2/3 of hardwood deciduous
roundwood delivered through overland checkpoints on the Russian-Chinese
Analysis of Timber Exports from the Russian Far East in 2015
Results
11
13,44
5,11
0,83
100
Primorsky
Krai
Amurskaya
Oblast
Evreyskaya
Autonomous
Oblast
Total
100
4,82
2,95
18,86
73,37
100
0
0
74,28
25,72
100
0
0
81,50
18,50
100
0,60
0
88,65
10,75
100
19,71
0
47,78
32,52
53,1
46,8
100
Exports by sea
Total
%
Exports over
land
Customs
100
0,38
10,74
60,66
28,23
73
75
71
$/m3
100
31,6
68,3
%
0,47
%
130
100
%
$/m3
%
$/m3
%
$/m3
%
215
100
2,28
199
412
100
6,24
219
345
100
1,80
255
378
100
9,96
227 97,72 194 93,76 210 98,20 253 90,04
$/m3
156 99,53 215
118
$/m3
83
61
85
$/m3
1.1 Coniferous 1.2 Coniferous 1.3 Coniferous 2.1 High value 2.2 High value 2.3 High value 3.1 Softwood
roundwood
sawnwood
plywood and roundwood
sawnwood
plywood and
deciduous
veneer
veneer
roundwood
Table 7. Timber export customs clearance in the Russian Far East by product categories, %
80,62
Khabarovsky
Krai
Region
1.1 Coniferous 1.2 Coniferous 1.3 Coniferous 2.1 High value 2.2 High value 2.3 High value 3.1 Softwood
roundwood
sawnwood
plywood and round-wood
sawnwood
plywood and
deciduous
veneer
veneer
roundwood
Table 6. Wood products exporting regions in the Russian Far East in 2015 by product categories, %
$/m3
100
12,31
100
0
0
54,68
45,32
%
1,16
%
149
100
221
100
191 34,43 317 98,84
171
$/m3
43
43
23
$/m3
3.3 Softwood 4.1 Fuel wood
deciduous
plywood and
veneer
100
39,45
7,67
39,19
13,69
3.3 Softwood 4.1 Fuel wood
deciduous
plywood and
veneer
87,69 143 65,57
%
3.2 Softwood
deciduous
sawnwood
100
49,57
8,12
40,88
1,43
3.2 Softwood
deciduous
sawnwood
border are sold through timber exchanges and then processed by lumber
enterprises in two border provinces of Northeast China: Heilongjiang and
Jilin. The remaining timber imports from Russia travel beyond these regions.
The large share of local consumption arises from the fact that the forests in the
Russian Far East and the north of Northeast China are very close in forest type
and forest stand species composition. Therefore, it was easy for local Chinese
processing industries to re-orient to timber from the Russian Far East after
Chinese northeastern provinces introduced a logging ban in their natural forests.
Nearly all timber exports from Russia’s southern regions bordering China
were initially shipped by railroad through the Pogranichny/Suifenhe checkpoint
on the Russian-Chinese border. These border districts contain trading and forest
management companies that form the pool of Chinese importers/resellers. These
companies monopolize access to Russian Far East timber and make it difficult for
companies representing other Chinese regions to enter these trade exchanges.
By concentrating in their hands all railroad deliveries of Russian timber through
several checkpoints on the Russian-Chinese border, the northeastern companies
can coordinate pricing policies and determine demand for certain tree species or
wood products supplied from the Russian Far East.
Russian exporters may seek to evade the monopoly power of the near-border
resellers by re-orienting the delivery of their products from land to sea routes,
to the coastal regions of China or, if they directly contact customers, from other
Chinese regions.
Table 8 shows a ranking of coniferous wood product importers. For
coniferous unprocessed lumber from the Russian Far East, the largest market
segment, the market is substantially consolidated: 10 leading importers are
responsible for 42% of total imports. All of these are either located in China or
are intermediaries that import to China. Because nearly half of these products
are delivered by sea (Table 6), the ranking includes importers from the coastal
and inland regions of China (J & J WOOD CO., LTD (Hong Kong), HIGH HOPE
INTERNATIONAL GROUP JIANGSU CHAMPION HOLDINGS LTD (Jiangsu
province), and SUZHOU SENYANG INTERNATIONAL TRADING CO., LTD
(Jiangsu province). The remaining near-border resellers include representatives
of Northeast China and ALIS INTERNATIONAL PTY LTD (offshore). The price
range is not large: between 10—15%.
The coniferous sawnwood market is more consolidated (10 leading importers
are responsible for 64% of the market) and more diverse in terms of destinations.
Importers include KAIMAR LTD., a Czech trading company that delivers wood
products to a number of countries, including European states, and a Japanese
firm, SUMITOMO CORPORATION. The other 7 importers are near-border
resellers, and one is from Jiangsu province. Prices offered by Chinese importers
are much lower than those of KAIMAR LTD. or SUMITOMO CORPORATION.
In 2015, three Japanese companies imported virtually the entire volume of
coniferous plywood from the Russian Far East (97% of the market).
Importers from the Chinese-Russian border regions have an absolute lead
in high value roundwood imports (Table 9). All these market segments are
substantially consolidated, except for unprocessed elm timber. Prices vary in
the range of 10—15%. The leading importers also include timber companies
and wood processing plants: HUANAN HEXIN FOREST INDUSTRY CO., LTD;
SUIFENHE ZHONGXIN MEILAI INTERNATIONAL WOOD INDUSTRY CO.,
LTD; SUIFENHE JUXIN WOOD INDUSTRIAL CO., LTD (oak); SUIFENHE
JUXIN WOOD INDUSTRIAL CO., LTD (ash); SUIFENHE YUANDONG WANDA
WOOD INDUSTRY CO., LTD; SUIFENHE DEBANG WOOD INDUSTRY CO.,
LTD; and SUIFENHE TONGMING WOOD CO., LTD (elm).
12
Analysis of Timber Exports from the Russian Far East in 2015
Table 8. Leading importers of coniferous wood products from the Russian Far East in 2015
No.
Name
Thou. m3
%
$/m3 Thou. US$
316
6,83
76
24084
278
6,02
77
21483
HIGH HOPE INTERNATIONAL GROUP JIANGSU CHAMPION
HOLDINGS LTD (offshore/China)
268
5,79
73
19544
4 RAOHE MAOSEN INTERNATIONAL TRADE CO., LTD (China)
232
5,01
68
15701
5 RAOHE FENGTAI IMPORT EXPORT TRADE CO., LTD (China)
205
4,43
70
14295
SUZHOU SENYANG INTERNATIONAL TRADING CO., LTD
6
(China)
173
3,73
75
12910
7
135
2,93
73
9854
8 ALIS INTERNATIONAL PTY LTD (offshore)
133
2,88
80
10622
9 SUIFENHE DAFU EXPORT IMPORT TRADE CO., LTD (China)
114
2,47
68
7754
10 TONGJIANG ZHONGMAI TRADE CO., LTD (China)
91
1,97
86
78353
74
144083
1.1. Coniferous roundwood
1
J & J WOOD CO., LTD (Hong Kong)
2 SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
3
SUIFENHE QUMEI WOOD CO., LTD (China)
Total for the ten importers
1946
42,06
Total
4627
100,00
164
15,03
96
15786
123
11,24
148
18267
115
10,54
96
11063
75
6,83
155
11576
55
5,00
109
5951
42
3,87
127
5383
SUIFENHE LONGJIANGSHANGLIAN IMPORT EXPORT CO.,
LTD (China)
38
3,46
114
4307
8 SUIFENHE GUANLIN IMPORT EXPORT TRADE CO., LTD (China)
33
3,03
99
3291
SUZHOU SENYANG INTERNATIONAL TRADING CO., LTD
(China)
31
2,82
121
3717
10 RAOHE FENGTAI IMPORT EXPORT TRADE CO., LTD (China)
26
2,38
146
3797
Total for the ten importers
703
64,19
118
83137
Total
1095
198
73,12
209
41416
2 SOJITZ CORPORATION (Japan)
58
21,30
248
14332
3 ITOCHU KENZAI CORP (Japan)
7
2,53
198
1358
Total for the three importers
263
96,95
210
57106
Total
271
1.2. Coniferous lumber
1
SUIFENHE SHENGTAI IMPORT EXPORT TRADE CO., LTD
(China)
2 KAIMAR, LTD. (the Czech Republic)
3
SUIFENHE PENGRUI ECONOMIC AND TRADE CO., LTD
(China)
4 SUMITOMO CORPORATION (Japan)
5
SUIFENHE HONGHAO IMPORT EXPORT TRADE CO., LTD
(China)
6 FUJIN YONGAN SUIBIN CO., LTD (China)
7
9
1.3. Coniferous plywood
1
SUMITOMO CORPORATION (Japan)
Results
13
Table 9. Leading importers of high value roundwood
Thou.
m3
%
$/m3
Thou.
US$
21
12,00
183
3931
2 SUIFENHE SENLINZHIXING TRADE CO., LTD (China)
18
10,12
197
3582
3 SUIFENHE BAILIDA ECONOMIC AND TRADE CO., LTD (China)
17
9,44
177
2995
4 HUANAN HEXIN FOREST INDUSTRY CO., LTD (China)
16
8,90
184
2935
5 SUIFENHE ZIFA TRADE CO., LTD (China)
14
7,67
177
2429
6 SUIFENHE BAOSEN TRADE AND ECONOMIC CO., LTD (China)
13
7,21
194
2511
7
SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
12
6,61
194
2302
8
SUIFENHE ZHONGXIN MEILAI INTERNATIONAL WOOD
INDUSTRY CO., LTD (China)
8
4,86
176
1532
9 SUIFENHE ZHONGHUI IMPORT EXPORT CO., LTD (КНР)
7
4,21
171
1291
10 SUIFENHE JUXIN WOOD INDUSTRIAL CO., LTD (КНР)
5
2,77
195
966
Total for the ten importers
132
73,80
184
24473
Total
179
№
Name
Oak
1
SUIFENHE XINGLILAI TRADE CO., LTD (China)
Ash
1
SUIFENHE XINGLILAI TRADE CO., LTD (China)
21
20,05
183
3960
2
SUIFENHE BAOSEN TRADE AND ECONOMIC` CO., LTD
(China)
12
11,73
201
2547
3 SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
7
7,09
244
1872
4 SUIFENHE BAILIDA ECONOMIC AND TRADE CO., LTD (China)
6
6,23
206
1390
5 SUIFENHE SENLINZHIXING TRADE CO., LTD (China)
4
4,42
193
923
6 SUIFENHE XUANYUAN TRADE CO., LTD (China)
3,6
3,41
181
668
7
3,4
3,16
198
676
8 SUIFENHE JUXIN WOOD INDUSTRIAL CO., LTD (China)
3,4
3,16
213
728
9
SUIFENHE HAIMING ECONOMIC AND TRADE CO., LTD
(China)
3,2
3,03
191
625
10
SUIFENHE AIERGELIN ECONOMIC AND TRADE CO., LTD
(China)
3
2,75
245
732
70,3
65,02
215
23281
SUIFENHE JIUSHUN TRADE CO., LTD (China)
Total for the ten importers
Total
108,2
Linden
1
SUIFENHE LONGJIANGSHANGLIAN IMPORT EXPORT CO.,
LTD (China)
0.15
35,89
186
24
2
SUIFENHE ZHONGXIN MEILAI INTERNATIONAL WOOD
INDUSTRY CO., LTD (China)
0,14
40,47
187
27
0,04
11,04
346
14
Total for the three importers
0,3
87,41
207
65
Total
0,36
3 INTERACT LTD (Japan)
14
Analysis of Timber Exports from the Russian Far East in 2015
Continuation of Table 9
Elm
1
11
9,89
131
1483
2 SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
9,2
8,10
109
1012
3 SUIFENHE SENLINZHIXING TRADE CO., LTD (China)
8,5
7,48
121
1039
5
4,47
146
746
4
DONGNING JIUYUAN TRADING CO., LTD (China)
SUIFENHE YUANDONG WANDA WOOD INDUSTRY CO., LTD
(China)
4
3,66
176
736
6 SUIFENHE HAOHAI ECONOMIC AND TRADE CO., LTD (China)
5 SUIFENHE DEBANG WOOD INDUSTRY CO., LTD (China)
3,8
3,34
137
524
7
SUIFENHE XINGJIA TRADE CO., LTD (China)
3,7
3,29
177
668
8 SUIFENHE TONGMING WOOD CO., LTD (China)
3,6
3,22
281
1037
9 HULIN YUANHUA TRADING CO., LTD (China)
3,6
3,18
100
364
10 SUIFENHE XINGLILAI TRADE CO., LTD (China)
3,3
2,92
162
541
Total for the ten importers
56
49,54
144
8150
Total
114
One the leading importers of oak, ash, and elm is SUIFENHE XINGLILAI TRADE
CO., LTD, part of the Xinzia group, known for its involvement in the Lumber
Liquidators case. The US flooring retailer was convicted, under the US Lacey Act,
of illegal importation of hardwood timber into the US market. The retailer had to
pay $13 million in fines, the largest Lacey Act penalty ever, for purchasing illegally
logged timber imported by Chinese suppliers from the Russian Far East, where
it was illegally harvested in the forest homes of Amur tigers and Amur leopards2.
Leading importers of high value sawnwood include resellers and wood
processing plants from Northeast China (Table 10). Demand for sawnwood
products is smaller than that for unprocessed timber. Therefore, consolidation
of these market segments is generally not significant, with the exception of
linden exports, for which the share of wood processing plants is substantial (5
plants of 10 leading importers). The price range is not wide, with the exception,
again, of linden, for which it may reach 30%. The substantial dispersion in
linden plywood prices results from a large product quality range .
For softwood deciduous species, only unprocessed timber imports are
well-established, whereas other market segments are insignificant, although
deciduous softwood could be among the most promising exports, given the area
covered by secondary forests in the Russian Far East as well as the volumes of
these species in total forest area (Table 12).
Five importers are responsible for more than 98% of fuel wood, wood chip
and wood brick imports (Table 13). In 2015, more than half of these products
were exported to South Korea, 40% to Japan, and the rest to China. KAIMAR
LTD., a Czech trading company (Prague), resold fuel wood pellets produced by
the joint venture, ARKAIM LTD. (Khabarovsky province), to South Korea via the
Vanino municipality. SUMITOMO CORPORATION (Japan) and KWANGWON
LUMBER CO., LTD (South Korea) purchased 100% of wood chips produced by
TERNEYLES. NOOWON CO., LTD (South Korea) imported wood bricks made
by VOSTOK-VB LTD. (Primorsky Krai).
2
See the US Department of Justice, “Lumber Liquidators Inc. Sentenced for Illegal Importation of Hardwood and Related
Environmental Crimes,” August 11, 2016. Available at https://www.justice.gov/opa/pr/lumber-liquidators-inc-sentenced-illegalimportation-hardwood-and-related-environmental
Results
15
Table 10. Leading importers of high value sawnwood
Thou.
m3
%
$/m3
Thou.
US$
SUIFENHE BAOSEN TRADE AND ECONOMIC CO., LTD (China)
16,5
9,726
261
4324
2 SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
15,5
9,148
300
4664
3
SUIFENHE ZHONGXIN MEILAI INTERNATIONAL WOOD
INDUSTRY CO., LTD (China)
10,6
6,257
262
2792
4
MULING CITY GUANGCHENG WOOD PRODUCT CO., LTD
(China)
8,3
4,918
288
2412
5 DALIAN JINDA WOOD PRODUCTS CO., LTD (China)
7,6
4,509
285
2189
6 NINGAN SHENGCHANG WOOD INDUSTRY CO., LTD (China)
6,5
3,838
280
1830
DONGNING SUIYANG WOODLAND YUANTONG WOOD CO.,
LTD (China)
6
3,574
277
1686
8 SUIFENHE BAILIDA ECONOMIC AND TRADE CO., LTD (China)
5,9
3,51
296
1770
9 JIAMUSI HEWANG ECONOMIC AND TRADE CO., LTD (China)
5,3
3,161
288
1552
10 FUSONG JINQIU WOODEN PRODUCT CO. , LTD (China)
4,8
2,862
295
1434
Total for the ten importers
87
51,5
281
24652
Total
170
20,5
19,59
286
5880
10
9,60
286
2881
6
5,81
283
1726
4 SUIFENHE BAILIDA ECONOMIC AND TRADE CO., LTD (China)
5,5
5,27
298
1646
5 HULIN YUANHUA TRADING CO., LTD (China)
4,5
4,36
280
1280
6 DALIAN JINDA WOOD PRODUCTS CO., LTD (China)
4,1
3,91
282
1157
7 SUIFENHE SENLINZHIXING TRADE CO., LTD (China)
3,7
3,53
283
1046
8 SUIFENHE HAOHAI ECONOMIC AND TRADE CO., LTD (China)
2,9
2,78
289
843
9 SUIFENHE JIUSHUN TRADE CO., LTD (China)
2,8
2,76
289
836
SUIFENHE LONGJIANGSHANGLIAN IMPORT AND EXPORT
CO., LTD (China)
2,6
2,49
283
741
Total for the ten importers
63
60,10
Total
104
№
Name
Oak
1
7
Ash
1
SUIFENHE XINGLILAI TRADE CO., LTD (China)
2 SUIFENHE BAOSEN TRADE AND ECONOMIC CO., LTD (China)
3
10
1
2
3
4
5
6
7
16
SUIFENHE YUANDONG WANDA WOOD INDUSTRY CO., LTD
(China)
Linden
SUIFENHE HAOHAI ECONOMIC AND TRADE CO., LTD (China)
JILIN FOREST INDUSTRY YUNLONG WOOD CO., LTD (China)
SHANGZHI CITY LIANGZHU WRITING INSTRUMENT CO., LTD
(China)
SUIFENHE XINGLILAI TRADE CO., LTD (China)
SUIFENHE BAOSEN ECONOMIC AND TRADE CO., LTD (China)
DONGNING GUANGYUAN TRADING CO., LTD (China)
SUIFENHE CITY SENLINZHIXING TRADE CO., LTD (China)
Analysis of Timber Exports from the Russian Far East in 2015
24,5
16,5
16,99
11,50
125
133
3074
2199
14,4
10,04
107
1553
12,7
11,7
10,3
9,4
8,85
8,17
9,07
6,56
153
124
150
135
1958
1466
1550
1272
Continuation of Table 10
8 SHANGZHI WEIMING WOOD CO., LTD (China)
9 DALIAN JINDA WOOD PRODUCTS CO., LTD (China)
10 HAERBIN HONGQI WOODEN STATIONGERY CO., LTD (China)
Total for the ten importers
Total for linden 44,079
Total for linden 44,079 (China)
6
4,2
3,9
114
144
143
4,18
3,74
2,73
79,09
111
136
146
130
671
583
571
14896
m3
%
$/m3
Thou.
US$
857
485
399
1,742
1,808
47,43
26,83
22,11
96,37
299
300
300
299
256
146
120
522
4,201 27,98
3,155 21,01
2,089 13,92
2,031 13,53
1,839 12,25
497
3,31
272
1,81
14,087 93,81
15,015
294
121
217
450
164
246
237
246
1234
382
453
914
301
122
64
3470
79,52
Table 11. Leading importers of high value plywood
№п
1
2
3
1
2
3
4
5
6
7
Ten foreign importers
Oak
FUSONG JINLONG WOODEN GROUP CO., LTD (China)
FUSONG JINQIU WOODEN PRODUCT CO., LTD (China)
FUSONG QIANQIU WOODEN PRODUCT CO., LTD (China)
Total for the three importers
Total
Lined
HAILIN XINGCHENG FOREST CO., LTD (China)
DUNHUA CITY FUSHAN TIMBER INDUSTRY CO., LTD (China)
DALIAN XINGJIA WOOD INDUSTRY CO., LTD (China)
DUNHUA XINGYUAN WOOD INDUSTRY CO., LTD (China)
DUNHUA SHENGHE WOOD INDUSTRY CO., LTD (China)
SUIFENHE XINGLILAI TRADE CO., LTD (China)
MUDANJIANG DAHE WOOD INDUSTRY CO., LTD (China)
Total for leading importers
Total
Wood product exports
In 2007, the government of Russia increased customs duties for roundwood
timber to create new incentives for establishing timber processing factories in
Russia and to further develop domestic manufacturing of high-value products.
In parallel, the government introduced so-called priority investment projects
in forest development. During 2007—2013, the level of overall investment in
wood processing amounted to 18.2 billion rubles in Khabarovsky province and
nearly 10 billion rubles in Primorsky province. In Khabarovsky province, five
investment projects are currently at various stages of implementation. These
projects include building a dry lumber plant by Amur Forest Ltd. in Berezovy,
Solnechny district (commissioned in 2009); a dry lumber and particle board
plant by Arkaim Joint Venture (phase 1, commissioned in 2009); a medium
density fiberboard plant by the Rimbunan Hijau group in Khor, Laso district
(production launched in 2011 but suspended in 2012, due to high raw materials
costs and poor product quality); a center for enhanced wood processing
by the Dallesprom company (part of the RFP Group in Amursk, a plywood
production holding company launched in 2013); and a shaved and curved
lumber production facility by Asia Les Ltd., Berezovy, Solnechny district.
Results
17
In Primorsky Krai, the following three projects have been implemented: a
triple-layer ready-to-use parquet production facility by CJSC Les Export,
Dalnerechensk; sawmills in Terneysky and Olginsky districts; a laminated veneer
lumber plant by Primorsklesprom Ltd. in Chuguevsky district (commissioned in
2014); and a plywood and lumber plant by Terneyles company in Terneysky
district (capacity commissioned in 2009)3.
Table 12. Leading importers of softwood deciduous timber from the Russian Far East in 2015
m3
%
$/m3
Thou.
US$
SUIFENHE SANXIA ECONOMIC AND TRADE CO., LTD (China)
144,645
14,72
82
11859
2 SUIFENHE BAOSEN TRADE AND ECONOMIC CO., LTD (China)
66,598
6,78
86
5725
3 SUIFENHE XINGLILAI TRADE CO., LTD (China)
59,854
6,09
90
5364
№
Name
3.1. Softwood deciduous roundwood
1
4
SUIFENHE SHUNSHENG ECONOMIC AND TRADE CO., LTD
(China)
48,403
4,92
99
4801
5
SUIFENHE HONGHAO ECONOMIC AND TRADE CO., LTD
(China)
34,270
3,49
62
2124
6
SUIFENHE LONGJIANGSHANGLIAN IMPORT EXPORT CO.,
LTD (China)
31,099
3,16
62
1909
7
SUIFENHE BAILIDA ECONOMIC AND TRADE CO., LTD (China)
28,504
2,90
89
2527
25,877
2,63
66
1701
9 SUMITOMO CORP0RATION (Japan)
25,713
2,62
60
1551
10 SUZHOU SENYANG INTERNATIONAL TRADING CO., LTD (China)
25,686
2,61
59
1520
80
39080
150
720
8 SUIFENHE HANHUA WOOD CO.,LTD (China)
Total for the ten importers
490,655 49,92
Total
982,946
3.2. Softwood deciduous lumber
1
4,796
32,83
2 JIAYIN BAISHENGDE WOOD CO., LTD (China)
1,266
8,67
132
167
3 SUIFENHE TONGMING WOOD CO., LTD (China)
1,046
7,16
238
249
4 SUIFENHE HAIXI ECONOMIC AND TRADE CO., LTD (China)
994
6,81
66
66
SUIFENHE XINHENGYUAN GROUP ECONOMIC TRADE CO.,
LTD (China)
986
6,75
112
111
6 HARBIN BEST INTERNATIONAL TRADING CO., LTD (China)
866
5,93
235
204
Total for the ten importers
9,956
68,14
152
1516
Total
14,611
7,370
31,16
171
1263
7,273
30,75
280
2036
5
JIAYIN WANGTONGXIANG FOREST CO.,LTD (China)
3.3. Softwood deciduous plywood
1
XIANGHAI CO., LTD (China)
2 SUMITOMO CORPORATION (Japan)
3
LesPromInform Journal, No. 3 (109), 2015, http://www.lesprominform.ru/jarchive/articles/itemshow/4030
18
Analysis of Timber Exports from the Russian Far East in 2015
Continuation of Table 12
TONGJIANG XIAOLUN ECONOMIC AND TRADE CO., LTD
(China)
1,719
7,27
190
326
4 HUNCHUN LANBAOSHI WOOD INDUSTRY CO., LTD (China)
1,158
4,90
100
116
HUNCHUN SENYUAN INDUSTRY AND TRADE CO., LTD
(China)
845
3,57
98
83
Total for the ten importers
18,367
77,64
208
3824
Total
23,656
3
5
Table 13. Leading importers of fuel wood and wood chips
Name
m3
%
$/m3
Thou. US$
KAIMAR LTD (the Czech Republic)
94,135
45,0
65
6111
2 SUMITOMO CORPORATION (Japan)
84,729
40,5
23
1974
3 KWANGWON LUMBER CO., LTD (South Korea)
21,759
10,4
20
443
4 NOOWON CO., LTD (South Korea)
3,723
1,8
59
219
5 LACORICH CO., LTD (South Korea)
1,759
0,8
88
154
Total for the ten importers
206,107
98,4
43
8902
Total
209,355
100
1
RF Government Regulation No. 1319 of December 2014 was another government
support measure targeting the wood processing industry. This regulation
stipulated that, from 2014 onwards, subsidies were to be provided from out of
the federal funds to wood processing plants in the Far East Federal District for
priority investments in forest development and wood processing enhancement
projects. The plan was to annually provide more than 1.5 billion rubles in
subsidies annually.
At the same time, such relatively large investments in wood processing in
the Far East Federal District and the eventual commissioning of the above
wood processing capacities do not appear to correlate with the rate of growth of
processed products in timber exports. The share of sawn wood in 2015 exports
is larger than in 2014 yet is smaller than in 2013, indicating a lack of a stable
growth trend. In broad terms, the current share of sawn wood and processed
products in total wood exports remains stable, at around one quarter of overall
exports (Table 14).
Table 14. Wood product exports from the Russian Far East by degree of processing (in physical terms, m3)
Year
Roundwood
Lumber
Veneer, plywood
Total
In physical terms
2013
5,537,760 (74,0%)
1,632,238 (21,8%)
316,439 (4,2%)
7,486,437 (100%)
2014
6,169,208 (78,2%)
1,470,414 (18,6%)
251,973 (3,2%)
7,891,595 (100%)
2015
5,898,827 (75,1%)
1,644,295 (20,9%)
311,958 (4,0%)
7,855,080 (100%)
Results
19
Processed wood products exported from the Russian Far East consist of
sawnwood, plywood, and insignificant volumes of veneer, trim, and laminated
veneer lumber. Nearly 82% of coniferous lumber exported from the Russian Far
East in 2015 was manufactured by 12 leading companies in Khabarovsky Krai and
Primorsky Krai and one company in Evreyskaya Authonomous Oblast (Table 15).
A large share of exported lumber is of poor quality and mostly consists of
rough-sawn timber that is neither dried nor shaved or sanded. It also lacks
appropriate packaging. This can be contrasted with top-quality coniferous
lumber exported from Siberia to Japan via Russian Far East seaports.
Table 15. Russian Far East: leading producers of coniferous sawnwood exported in 2015
№
m3
%
OJSC FLORA (Khabarovsky Krai)
211,658
19,32
2 OJSC TERNEYLES (Primorsky Krai)
141,016
12,87
3 AMUR FOREST LTD (Khabarovsky Krai)
133,203
12,16
4 Joint venture ARKAIM LTD (Khabarovsky Krai)
123,130
11,24
5 DV-MAXIMUM LTD (Khabarovsky Krai)
75,266
6,87
6 SIN’-CHUN’ LES LTD (Evreyskaya Autonomous Oblast)
39,817
3,63
7
31,450
2,87
8 OJSC DALLESSTROY (Khabarovsky Krai)
30,744
2,81
9 OJSC GORNORUDNAYA KOMPANIYA AIR (Primorsky Krai)
23,931
2,18
10 OJSC DALLESPROM (Khabarovsky Krai)
23,378
2,13
11 ELITDV LTD (Khabarovsky Krai)
21,954
2,00
12 RIMBUNAN HIJAU DV+MDF LTD (Khabarovsky Krai)
19,676
1,80
1
Name
PJSC KOMSOMOLSKY LPKh (Khabarovsky Krai)
13 LESTRANSKOM-DV LTD (Khabarovsky Krai)
Total for the 13 leading producers
Total exports
17,539
1,60
892,765
81,48
1,095,729
100,00
Sawnwood production requires high-quality sawlogs exported at competitive
prices. By comparing average export prices of sawlogs and rough lumber, one
can see that the difference is very small compared with the volume of sawlogs
needed to produce this lumber; and when it comes to coniferous lumber overland
exports or high value sawnwood overland and maritime exports, prices of raw
materials are higher than for lumber produced therefrom (Table 16).
Table 16. Comparison of average prices for of exported roundwood and sawnwood in terms of the
equivalent amount of raw wood
Export
direction
Average price, $/m3
Coniferous Coniferous Equivalent High value High value Equivalent Deciduous
Deciduous Equivalent
round- sawnwood raw wood
round
round- sawnwood
sawnwood
raw
wood
raw wood
wood
wood
wood
Over land
71
118
127
194
210
346
85
143
152
By sea
75
156
134
412
345
736
61
191
109
On
average
73
130
130
199
219
355
83
149
148
20
Analysis of Timber Exports from the Russian Far East in 2015
Current exports of poor quality sawnwood, which require further processing in
China, are not cost-effective compared with roundwood exports. It is exported
in an attempt by regional timber businesses to comply with new government
tariffs and restrictions on the export of roundwood timber. Other low-grade wood
products in the export mix include wood chips (OJSC Terneyles), biofuel pellets
(Joint Venture Arkaim Ltd.) and wood bricks (Vostok-VB Ltd.). Higher-grade
export products include coniferous plywood (Table 17).
Table 17. Leading producers of coniferous plywood exported from the Russian Far East in 2015
№
m3
%
OJSC TERNEYLES
201,650
74,3
2 AMURSKAYA LK LTD.
69,820
25,7
Total for the two leading producers
271,471
100,0
Total exports
271,477
100
1
Name
The development of high value-added wood processing in the Russian Far East
can be fostered not only through government support and corresponding tariff
policies but also through the promotion of Russian timber products in target
foreign timber markets. The latter is only possible through joint investments
in timber harvesting and value-added wood processing by forestry companies
of the Russian Far East and their partners in East Asian countries. One success
story in the Russian Far East is the cooperation between the Terneyles group
of companies (Primorsky province) and the Sumitomo Corporation (Japan).
Currently, OJSC Terneyles is the region’s leading company in terms of highgrade wood products output and mix.
Results
21
4. TARGET MARKETS
I
n 2015, more than 99% of wood products (in m3) manufactured in the Russian
Far East for export purposes were delivered to three neighboring countries:
China, Japan, and South Korea (Table 18).
China dominates wood exports in seven of ten wood product categories
included in the analysis, particularly in the largest-scale market segments. China’s
share exceeds 80—90%, illustrating the nearly complete reorientation of Russian
Far East exports from Japan and South Korea to the Chinese markets. This
reorientation reflects various factors, principally that Russian Far East forestry
companies have lost out to competitors from other Russian regions (East Siberia)
or other countries (Canada, New Zealand, USA) in the Japanese and South Korean
markets, mainly because of the poor quality of their wood products.
Other exports from the Russian Far East to 19 countries in Europe and the
Asian-Pacific are traditionally irregular and insignificant in volume, cumulatively
amounting to no more than 2—3% of output in individual categories (including
coniferous sawnwood, coniferous and softwood deciduous plywood). The major
reason for this is that the large geographical distance between these target markets
and the timber harvest areas of the Russian Far East makes it difficult to inform
potential buyers, over-complicates the logistics and makes delivery too costly.
In terms of end-use product quality, Russian Far East suppliers are behind
their competitors from other countries in global timber markets. Although they
are competitive in raw wood (unprocessed timber) and pre-fabricated materials
(sawnwood, plywood), they have to ensure large-scale and stable supply or to
become integrated into foreign production chains should they want to be more
successful. Either option is unattractive for Russian Far East companies as long
as China is prepared to purchase the whole range of wood products from the
Russian Far East, albeit in a lower price category.
China’s timber
market
22
Since 2001, continental China has been the leading global net-importer of
unprocessed timber, and since 2005, it has also been the world’s largest netexporter of wood products and furniture. Thus, China appears to be in effect a
gigantic wood processing and furniture making hub.
Chinese roundwood imports grew dramatically in the late 1990s—early 2000s
because of a significant scarcity of raw wood for sawmills, veneer factories and
other enterprises, resulting from industrial felling restrictions introduced by the
country against a background of fast economic growth and increased timber
demand.
High timber consumption growth rates in China are associated with fast
economic growth, improved livelihoods and growing urbanization. These
factors foster the development of plants that manufacture end-use wood
products, including furniture and building and finishing materials. Mediumand high-density fiberboard and particle board production capacities have been
increasing particularly rapidly. Oriented stand board (OSB) has been in great
demand in the recent years (this board is mostly used as a high-quality finishing
material instead of veneer and other glued materials), as have materials used in
door, furniture, and flooring production. In paper and cardboard production,
China is second to the US. Moreover, China’s share in the world market as an
exporter of high value-added wood products, primarily of furniture and board
materials, has increased annually.
Analysis of Timber Exports from the Russian Far East in 2015
Target markets
23
100
0
Other Asian
Pacific
Total
0
0,57
North Korea
Southeast
Asia
3,04
South Korea
0
2,54
Japan
Europe
93,86
China
NEA
neighboring
countries
Main directions
100
0
0
2,98
0,07
14,34
3,67
78,91
100
0,07
2,32
0,34
0
10,94
73,96
12,36
100
0
0
0
0
0,27
2,09
97,64
100
0
0,15
0
0
0,08
0,66
99,11
100
0
0,76
0
0
0
0,47
98,77
100
0
0
0
0,10
1,03
0,00
98,86
1.1 Coniferous 1.2 Coniferous 1.3 Coniferous 2.1 High value 2.2 High value 2.3 High value 3.1 Softwood
roundwood
sawnwood
plywood and roundwood
sawnwood
plywood and
deciduous
veneer
veneer
roundwood
Table 18.Wood product exports from the Russian Far East by main directions and product categories, %
100
0
1,21
0
0
0
1,88
96,90
3.2 Softwood
deciduous
sawnwood
100
1,20
0,17
0,43
0
2,08
30,88
65,24
100
0
0
0
0
58,49
40,48
1,03
3.3 Softwood 4.1 Fuel wood
deciduous
plywood and
veneer
Further development of the wood processing industry and the load of all
production facilities in China will depend on the availability of raw wood fiber
(Fig. 1).
Figure 1. Wood product exports to China, m3
Roundwood coniferous
Roundwood Mongolian oak
Roundwood deciduous
Sawnwood coniferous
Sawnwood Mongolian oak
Sawnwood deciduous
During the last five years, China has been continuously increasing its imports in
all wood product categories except coniferous roundwood (a 9% drop in 2015).
Since 2013, China’s timber imports (in physical terms) have been growing, while in
monetary terms, they show decline driven by falling world timber prices (Fig. 2).
Figure 2. Wood product exports to China: summary of price evolution, $/m3
Roundwood coniferous
Roundwood Mongolian oak
Roundwood deciduous
Sawnwood coniferous
Sawnwood Mongolian oak
Sawnwood deciduous
Therefore, China’s reduced imports of coniferous roundwood may generally
suggest that the global coniferous timber yield is exhausted at current price
levels and production/transportation costs.
In 20154, according to Chinese customs statistics, total roundwood imports
were 44.57 million m3 . Geographically, the largest suppliers of unprocessed
timber to China are as follows: New Zealand (24.2%), Russia (23.8%), USA
(9.2%), Papua New Guinea (7.1%), Australia (6.4%), Canada (5.3%), and Solomon
Islands (5.0%), summing to 81%, and the remaining 35 countries-suppliers are
responsible for less than 19%. Table 19 shows the shares of countries that supply
wood products to China as of 2015 by category.
4
LesPromInform Journal, No. 3 (109), 2015, http://www.lesprominform.ru/jarchive/articles/itemshow/4030
24
Analysis of Timber Exports from the Russian Far East in 2015
Таблица 19. Leading wood product exporters in the Chinese market in 2015
Product category
440320 Coniferous
roundwood
Country share, %
New
Zealand
Russia
USA
Australia
Canada
Ukraine
35.0
30.2
USA
11.9
Russia
8.3
Belgium
7.9
Ukraine
2.8
Germany
38.9
18.0
17.6
7.5
6.1
4.3
440391 Oak
roundwood
France
440399 Other
deciduous roundwood
(excl. tropical)
Russia
Latvia
Estonia
USA
Lithuania
Ukraine
70.0
16.4
2.7
2.4
1.6
1.1
440710 Coniferous
lumber
Russia
Canada
Chili
Finland
USA
Sweden
48.1
Russia
3.9
France
3.5
Canada
3.4
Ukraine
3.0
440791 Oak lumber
USA
31.9
Germany
77.3
14.0
USA
2.6
Latvia
2.5
Lithuania
1.4
Estonia
0.9
Finland
84.0
5.7
4.4
1.8
1.6
0.5
440799 Other
deciduous lumber
Russia
Source: UN Statistics Division /comtrade.un.org/
Since 2007, Russia’s share in total global roundwood exports to China has
dropped nearly three-fold (from 68.4% to 23.8%), taking a backseat to New
Zealand. Nevertheless, in 2015, Russia was still a leading exporter of larch
roundwood (98.7%), ash (99.8%) and other deciduous non-tropical timber
(70.0%) to China. It also maintained its leadership in exports of coniferous
sawnwood (48.1%) and other deciduous non-tropical lumber (84.0%) to the
Chinese market. Russia’s main competitors in the Chinese sawnwood market
are Canada (21.2%), Thailand (11.5%), and the US (10.3%).
In broad terms, Russia remains a leader in timber exports to China in
monetary terms (product code 44), albeit its share has dropped (Table 20).
Table 20. Timber, wood products, and charcoal imports (product code 44)
Country
Million US$
%
Change compared to 2014, %
Russian Federation
3,126
16,8
-1,1
USA
2,219
11,9
-22,6
Canada
1,497
8
-29,3
New Zealand
1,344
7,2
-26,1
Thailand
1,261
6,8
2,6
Indonesia
983
5,3
-8,2
Vietnam
864
4,7
-18,3
Laos
479
2,6
-54
Papua New Guinea
678
3,6
-16,7
Australia
840
4,5
73,4
Other countries
5,331
28,6
-21,8
Total
18,627
100
-18
Target markets
25
If we examine the evolution of Russia’s wood product exports to China, we
observe that following a noticeable drop in unprocessed timber exports after
2007, slight growth has occurred in recent years in coniferous and deciduous
sawnwood (Fig. 3).
Figure 3. Russian wood product exports to China: volume dynamics, m3
Roundwood coniferous
Roundwood Mongolian oak
Roundwood deciduous
Sawnwood coniferous
Sawnwood Mongolian oak
Sawnwood deciduous
Since 2011, in monetary terms, Russian wood product exports (except oak timber)
to China have been declining (Fig. 4).
Figure 4. Russian wood product exports to China: volume dynamics, m3
Roundwood coniferous
Roundwood Mongolian oak
Roundwood deciduous
Sawnwood coniferous
Sawnwood Mongolian oak
Sawnwood deciduous
A concern here is the situation of Russian oak sawnwood in the Chinese market.
The oak lumber price has been rising since 2013 (Fig. 4), while the export
volume has been shrinking (Fig. 3), a situation that will inevitably stimulate
oak harvesting in the Russian Far East, the main region of oak exports to China.
With this in mind, one should expect growth in illegal oak harvesting in Russia.
26
Analysis of Timber Exports from the Russian Far East in 2015
The Chinese market also shows strong prospects for Russian wood products,
including those from the Russian Far East. For example, in 2015, China’s
wood product imports exceeded its exports by nearly two orders of magnitude
(26,624,932 m3 versus 268,799 m3), indicating substantially unmet wood product
demand5. China is a very large veneer and plywood producer and the world’s
second largest consumer of these wood products. Russia is the second largest
plywood exporter to China (7.8%) after Vietnam (87.8%). Russia also provides
15.4% of Chinese total veneer imports.
In 2015, the share of the Russian Far East in Russia’s total wood product exports
to China was 48.3% of coniferous roundwood, 77% of deciduous roundwood, 13.1%
of coniferous sawnwood, and 51.4% of deciduous wood products. High value (oak
and ash) roundwood exports are almost entirely accounted for by the southern
regions of the Russian Far East, as are oak and ash lumber exports (97.5% and
82.3%, respectively).
Japan’s timber market
5
Until 2001, Japan was the largest importer of timber from the Russian Far East
but since then lost out to China, where the market for Russian timber appeared
to be characterized by higher price and quality elasticities. Since 1989, Japan has
been decreasing roundwood imports while also increasing sawnwood imports.
Today, Japan imports more lumber than sawlogs, calculated in roundwood
equivalent (i.e., the roundwood needed to produce a corresponding amount of
lumber). Wooden house construction is Japan’s primary timber consumption
sector. In recent decades, Japan has reduced traditional house construction, with
obvious effects on the demand for timber import.
Japan’s most preferred timber import is coniferous wood. In 2015, Russia
exported to this country 142 thousand m3 of coniferous roundwood, which
equaled 4.5% of Japan’s total coniferous roundwood imports. Russia is fourth in
these imports, after the US (56%), Canada (26%), and New Zealand (13%). In
2015, Russia came third in terms of coniferous sawnwood supply with its 771,029
m3 (13%) after Canada (34%) and Finland (14%).
The Russian Far East’s share in Russia’s coniferous sawnwood exports is 83%
but only 5% in sawnwood because of its poor quality and packaging inferior to
that produced in Siberia, including by Russian-Japanese joint ventures, primarily
TM Baikal and Igirma Tairiku in Irkutskaya Oblast.
Compared to the US and tropical countries, Russia’s share in Japan’s deciduous
roundwood imports is not large: 3,292 m3, or 3.5% (fifth largest); in deciduous
sawnwood, 3,078 m3, or 2.6% (sixth largest); in oak roundwood, 2,264 m3, or
14%; in oak sawnwood, 1,134 m3, or 4% (fifth largest). However, there is some
discrepancy between Russian and Japanese oak supply statistics: the Russian side
shows 2,424 m3 in oak roundwood and 1,314 m3 in oak sawnwood supplied from
the Russian Far East to Japan (Table 22), whereas the Japanese data indicate that
Russia delivered 7% less and 16% less, respectively, of these products. A certain
discrepancy is also observed in deciduous sawnwood imports. According to the
Russian Far East customs, 3,595.3 m3 in ash and linden roundwood and 25.2 m3 in
other deciduous (birch and maple) roundwood were exported to Japan, summing
to 3,620.5 m3, whereas according to the Japanese statistics, the value is 3,292 m3,
i.e., 10% less. The Russian Far East’s deciduous sawnwood allocation was 81%, of
which high value species (ash and linden) amounted to 88%. The discrepancies
may be explained by different methods used in roundwood equivalent calculation
and/or shrinkage allowance (for sawnwood).
UN Comtrade Statistics 2015
Target markets
27
South Korea’s timber
market
28
In relation to Russian Far East timber exports, South Korea’s market is very similar
to that of Japan, except that it is smaller and less meticulous about the quality and
grades of imported timber. This can be explained by the fact that wooden house
construction is not as popular in South Korea as in Japan, and so timber is mostly
processed for diverse industrial and other uses.
South Korea’s 2015 timber import data are not available, so we will instead use
the 2014 data in the analysis.
In 2014, Russia supplied 162,339 m3 of coniferous sawlogs to South Korea, i.e.,
2.5% of the market volume and was the sixth largest supplier after New Zealand
(52%), Canada (21%), the US (17%), Australia (4.4%), and Japan (2.6%).
In coniferous sawnwood supply, Russia comes second, after Chile (24%),
having exported 226,902 m3 (13.2%).
Analysis of Timber Exports from the Russian Far East in 2015
5. EXPORT OF HIGH
VALUE TIMBER
H
igh value timber exports from the Russian Far East are discussed separately
for the high environmental, economic and social value of these tree species,
which primarily include Mongolian oak (Quercus mongolica) and Manchurian
ash (Fraxinus mandshurica) as well as Amur, Manchurian, and Take linden
(Tilia Amurensis, T. Mandshurica, and T. Taquetii). The fruit of Mongolian
oak and Korean pine (Pinus koraiensis) are a source of fodder for many animals
and form the basis of the Ussuri taiga food chain, playing an important role in
Amur tiger conservation. Much of the ash stand is located in floodplain forests,
which provide a habitat for many rare and endangered species. Finally, the three
above linden species are the major nectar-bearing plants of the Russian Far East
and a significant (sometimes even the most important) source of income for the
population of taiga settlements.
China is nearly the only importer of Mongolian oak from the Russian Far
East; this timber is used in China for furniture and flooring production. A small
amount of oak and ash timber is exported to Japan (1—3%). As discussed in the
section describing Chinese importers, similarities in forest types and tree species
composition between the South of the Russian Far East and Northeast China
helped Chinese wood processing companies from the border regions rapidly
adjust to the raw wood supplied by Russia.
In the case of softwood species (birch, aspen, etc.), which have never
been harvested or processed in the Russian Far East but used as firewood at
best, growing demand by Chinese companies has put substantial pressure on
these forest resources. Given a difficult social and economic situation in taiga
settlements and in the south of the Russian Far East in the late 1990s and early
2000s, uncontrolled felling of these tree species has been rather common.
In China, Mongolian oak harvesting stopped in 2014 after logging was
prohibited in natural forests in the Northeast provinces. There is good reason to
assume that the south of the Russian Far East remains the main (and practically
the only) Mongolian oak harvest area, and during recent decades, uncontrolled
illegal logging has done considerable damage to this tree species. According to
WWF estimates of illegal logging (2013) between 1/2 and 2/3 of total Mongolian
oak exports were of illegal origin. At the same time, demand for oak products
(for example, flooring) is widely dispersed geographically, to also include
environmentally sensitive markets, such as those in the US and EU.
To preserve the resource base of this high value species, the Russian government
included, in 2014, Mongolian oak and Manchurian ash in CITES (Convention on
International Trade in Endangered Species of wild fauna and flora), Annex III.
This inclusion does not entail harvest restrictions as such. However, it requires
exporters to provide evidence of the legal origin of timber to ensure transparency.
Additionally, several regulations were implemented to combat the illegal timber
trade: Federal Act No. 415-FZ on the timber trade and its regional equivalent in
Primorsky Krai — Law No. 332-KZ of December 13, 2013, “On the regulation of
interactions in the timber turnover”.
After these new regulations were enforced, high value timber exports somewhat
declined – to 315 thousand m3 for oak (compared with 359 thousand m3 exported
in 2014) and to 231 thousand m3 for ash (compared with 235 thousand m3 in 2014).
Export of high value timber
29
Nevertheless, if calculated in the roundwood equivalent, current oak and ash
exports reveal harvesting volumes a way in excess over permitted harvest amounts,
which implies continuous illegal logging of Mongolian oak and Manchurian ash.
In other words, inclusion of these tree species in CITES has not resolved the illegal
logging problem. Rosprirodnadzor, a government agency responsible for CITES
compliance, is currently developing measures to improve the effectiveness of this
instrument, including filling gaps in current requirements to document evidence
of the legal origin of timber needed to obtain export permits. Not all sellers are
happy with the new requirements on oak and ash exports designed to improve
the transparency of supply chains. Some try to find ways to hide the illegality of
harvested timber and sell it to Chinese customers as if it were from legal sources.
Sanitary and selective logging remains another problem for Korean pinebroadleaf forests. These methods camouflage creaming of the best commercial
trees otherwise prohibited by forest legislation to harvest. Sanitary logging
legalizes logging through a veil of official documents. Yet, the best and
most valuable trees are felled instead of low quality timber while reporting
documentation is deceptive.
In addition, CITES compliance is currently difficult, as the government
body with the control function (Rosprirodnadzor) is not authorized to control
forestry relationships in forest areas, which instead is the responsibility of the
forest management departments of the Primorsky Krai and Khabarovsky Krai
governments and of the prosecution service. As long as there is no interaction
between these agencies and no effective primary accounting of timber (Unified
State Automated Information System), CITES will remain ineffective in preventing
illegal harvesting of high value tree species in the Russian Far East.
Figure 5. Mongolian oak habitat in the Russian Far East
Age groups
>240 years
121—240 years
10—120 years
30
Analysis of Timber Exports from the Russian Far East in 2015
Export of high value timber
31
Total
179,457
0
154,030
Primorsky
Krai
Evreyskaya
Autonomous
Oblast
25,426
Khabarovsky
Krai
Region
179,457
-
Vietnam
Total
-
2,424
South Korea
177,033
China
Japan
108,218
0
80,496
27,722
108,218
-
783
3,510
103,924
(oak sawlog) (ash sawlog)
362
0
362
0
362
-
0,6
85
276
(linden
sawlog)
170,152
402
155,401
14,348
170,152
-
199
1,313
168,639
(oak
lumber)
104,912
117
81,804
22,989
104,912
-
149
2,198
102,564
(ash
lumber)
(linden
lumber)
(elm
lumber)
(oak
plywood)
(linden
plywood)
144,354
2,692
130,873
10,788
144,354
779
-
13
143,562
114,534
0
105,540
8,994
114,534
-
98
-
114,436
1,808
0
1,808
0
1,808
-
-
65
1,742
15,015
3,315
6,229
5,470
15,015
127
-
13
14,874
Importing country 4403911000 4403999501 4403999509 4407919000 4407959900 4407999808 4407999808 4408909505 4408909509
Customs Commodity Code
Table 21. High value timber exports from the Russian Far East in 2015 by importing countries and regions of wood products origin, m3
32
Analysis of Timber Exports from the Russian Far East in 2015
-
0,00
Evreyskaya
Autonomous
Oblast
100,00
85,83
Primorsky
Krai
Total
14,17
Region
Khabarovsky
Krai
100,00
Vietnam
Total
-
1,35
Japan
South Korea
98,65
China
100,00
0,00
74,38
25,62
100,00
-
0,72
3,24
96,03
(oak sawlog) (ash sawlog)
100,00
0,00
100,00
0,00
100,00
-
0,17
23,47
76,37
(linden
sawlog)
100,00
0,24
91,33
8,43
100,00
-
0,12
0,77
99,11
(oak
lumber)
100,00
0,11
77,97
21,91
100,00
-
0,14
2,10
97,76
(ash
lumber)
(linden
lumber)
(elm
lumber)
(oak
plywood)
(linden
plywood)
100,00
1,87
90,66
7,47
100,00
0,54
0,00
-
99,45
100,00
0,00
92,15
7,85
100,00
-
0,09
-
99,91
100,00
0,00
100,00
0,00
100,00
-
-
3,63
96,37
100,00
22,08
41,49
36,43
100,00
0,85
-
0,09
99,06
Importing country 4403911000 4403999501 4403999509 4407919000 4407959900 4407999808 4407999808 4408909505 4408909509
Customs Commodity Code
Table 22. High value timber exports from the Russian Far East in 2015 by importing countries and regions of wood products origin, %
Figure 6. Oak, ash, and Korean pine exports, 2004–2015 (m3)
Korean pine
High value lumber
producers
Manchurian ash
Mongolian oak
In describing high value timber supply chains, it would be appropriate to show the
ranking of the leading producers in the Russian Far East as shown in the customs
clearance documents (Tables 23—25).
Table 23. Leading producers of oak timber producs exported from the Russian Far East in 2015
№
m3
%
18,750
10,45
2 FOREST-STAR LTD. (Primorsky Krai)
13,244
7,38
3 KOREKS LTD. (Primorsky Krai)
10,424
5,81
4 STROYENERGOSERVIS LTD. (Primorsky Krai)
7,881
4,39
5 SOLE PROPRIETOR CHUPRYAKOV S.G. (Primorsky Krai)
6,533
3,64
6 CJSC LES EXPORT (Primorsky Krai)
5,266
2,93
1
7
Name
Leading producers of exported oak roundwood
PRIMORSKY LES LTD. (Primorsky Krai)
VYMPEL-PROF LTD. (Khabarovsky Krai)
5,161
2,88
8 PRIMLESINVEST LTD. (Primorsky Krai)
4,457
2,48
9 SOLE PROPRIETOR KOZHEMYAKO T.V. (Primorsky Krai)
3,089
1,72
10 MITEKS LTD. (Primorsky Krai)
3,067
1,71
Producer unknown
12,280
6,84
Total for the ten0 leading producers
77,876
43,40
Total
179,457
100
Export of high value timber
33
Continuation of Table 23
Leading producers of exported oak sawnwood
1
2
3
4
5
6
7
8
9
10
STROYENERGOSERVIS LTD. (Primorsky Krai)
PRIMORSKY LES LTD. (Primorsky Krai)
SOLE PROPRIETOR KURMANOV A.A. (Primorsky Krai)
LIMONNIKI LTD. (Primorsky Krai)
KHOR-SERVIS LTD. (Khabarovsky Krai)
TORS LTD. (Primorsky Krai)
TANDEM DV (Primorsky Krai)
LESOZAVODSKY LPK LTD. (Primorsky Krai)
TRANS ASIA LTD. (Primorsky Krai)
ARS-DV LTD. (Primorsky Krai)
Total for the ten leading producers
Other
Producer unknown
Total
Leading producers of exported oak plywood
1
2
3
4
5
ARS-DV LTD. (Primorsky Krai)
EVEREST LTD. (Primorsky Krai)
IMPULSE LTD. (Primorsky Krai)
TSENTR EKOLOGICHESKOGO TURISMA LTD. (Primorsky Krai)
TENDEMSTROY LTD. (Primorsky Krai)
Total for the five leading producers
Other
Producer unknown
Total
21,135
11,667
8,915
6,073
4,855
4,080
3,678
3,407
3,333
3,179
70,325
82,408
17,418
170,152
12,42
6,86
5,24
3,57
2,85
2,40
2,16
2,00
1,96
1,87
41,33
48,43
10,24
100
485
352
204
180
139
1,361
158
287
1,808
26,83
19,5
11,33
9,97
7,70
75,32
8,79
15,90
100
Table 24. Leading producers of ash timber products exported from the Russian Far East in 2015
№
1
2
3
4
5
6
7
8
9
10
34
Name
Leading producers of exported ash roundwood
KOREKS LTD. (Primorsky Krai)
PRIMLESINVEST LTD. (Primorsky Krai)
CJSC LES EXPORT (Primorsky Krai)
FOREST-STAR LTD. (Primorsky Krai)
PRIMORSKY LES LTD. (Primorsky Krai)
LESOZAVODSKY LPK LTD. (Primorsky Krai)
AMBER WOOD LTD. (Primorsky Krai)
CJSC ARTEL STARATELEI TERNEYLESSTROY (Primorsky Krai)
VYMPEL-PROF LTD. (Khabarovsky Krai)
PUZL LTD. (Khabarovsky Krai)
Analysis of Timber Exports from the Russian Far East in 2015
m3
%
5,257
5,157
5,122
4,778
4,526
4,088
4,071
3,791
3,709
3,327
4,86
4,77
4,73
4,42
4,18
3,78
3,76
3,50
3,43
3,08
Continuation of Table 24
Total for the ten leading producers
Other
Producer unknown
Total
43,829
57,318
7,069
108,218
40,50
52,97
6,53
100
PRIMORSKY LES LTD. (Primorsky Krai)
DALNERECHENSKLES LTD. (Primorsky Krai)
KOREKS LTD. (Primorsky Krai)
CJSC LES EXPORT (Primorsky Krai)
VITYAZ LTD. (Primorsky Krai)
VYMPEL-PROF LTD. (Khabarovsky Krai)
CJSC PTS HARDWOOD (Primorsky Krai)
OLYMP PLUS LTD. (Primorsky Krai)
LESOZAVODSKY LPK LTD. (Primorsky Krai)
LIMONNIKI LTD. (Primorsky Krai)
Total for the ten leading producers
Other
Producer unknown
Total
11,422
6,723
6,555
4,030
3,981
3,769
3,595
3,528
2,899
2,548
49,055
48,716
7,140
104,912
10,89
6,41
6,25
3,84
3,79
3,59
3,43
3,36
2,76
2,43
46,8
46,44
6,81
100
Leading producers of exported ash sawnwood
1
2
3
4
5
6
7
8
9
10
Table 25. Leading producers of elm sawnwood exported from the Russian Far East in 2015
№
1
2
3
4
5
6
7
8
9
10
Name
PRIMTRUST LTD. (Primorsky Krai)
SORENTA LTD. (Primorsky Krai)
OLYMP PLUS LTD. (Primorsky Krai)
FOREST-STAR LTD. (Primorsky Krai)
REGIONLES LTD. (Khabarovsky Krai)
ALTERNATIVA LTD. (Primorsky Krai)
VECTOR LTD. (Primorsky Krai)
ONYX PLUS LTD. (Primorsky Krai)
OJSC ROSHCHINSKY KLPH (Primorsky Krai)
KOREKS LTD. (Primorsky Krai)
Total for the ten producers
Other
Producer unknown
Total
m3
%
18,333
16,260
10,530
4,515
3,766
3,650
3,594
3,569
3,458
2,679
70,357
38,412
5,765
114,534
16,01
14,20
9,19
3,94
3,29
3,19
3,14
3,12
3,02
2,34
61,42
33,54
5,03
100
Export of high value timber
35
Linden timber exports
As primary nectar-bearing plants, linden trees play important social, economic,
and environmental roles, and therefore, the linden harvest is restricted in
Primorsky Krai, Evreyskaya Autonomous Oblast, and the south of Khabarovsky
Krai. Far East linden varieties, such as Amur linden, Manchurian linden and
Taquetii linden, are of paramount importance in beekeeping. According to the
State Forestry Department, in Primorsky Krai, there are nearly 400 thousand
hectares of stand dominated by linden, accounting for approximately 3% of
the total forested area in Primorye. Until 2007, commercial logging of linden
was prohibited throughout Primorsky Krai and in most of Khabarovsky Krai,
as required by “The logging rules in the Russian Far East forests” (1993). An
additional linden logging ban was formulated directly by Primorsky Krai through
its regional law of 05.12.1999 No. 69-KZ “On valuable and rare, not fellable tree,
bush, and liana species in the territory of Primorsky Krai”. However, after the
new Russia’s Forestry Code was enacted in 2007, these regulations became void,
and linden lost its conservation status. Year after year, linden timber exports
grew rapidly.
In 2015, 137,466 m3 of linden sawnwood were exported from Primorsky Krai,
amounting to 86% of total linden exports from the Russian Far East, or 87%,
if calculated as raw wood (Table 26). That said, the roundwood equivalent of
the exported amount, i.e., the total timber harvest volume needed to sustain
current exports, was 355 thousand m3 in 2014 and 434 thousand m3 in 20156.
By contrast, the total linden harvest in Primorye in 2014 was 162 thousand m3,
as reported by the Primorsky Krai Forestry Department, which is much less
than the 355,386 m3 actually harvested for export. Most likely, the difference
between the official harvest data and actual harvest volumes, calculated based
on linden exports from Primorye, indicates substantial overcutting, i.e., cutting
above the allotted amounts.
Table 26. Linden exports from Primorsky Krai calculated as roundwood equivalent of export volume, 2015
Product category
Roundwood
Export, m3
Bark coefficient
Roundwood
recovery factor
Equivalent harvest
volume conversion
factor
Equivalent harvest
volume, m3
316
1,13
1,00
0,56
499
Lumber
130,874
1
0,56
0,56
417,328
Plywood
6,230
1
0,7
0,56
15,893
Total
137,466
433,720
6
The following lumber recovery factors were used to estimate the liquid equivalents: 0.56 for lumber and 0.7 for plywood. Because
the customs include bark in the total export volume, albeit it is missing from the liquid volume shown in the forest use reports, the
calculations integrate the average share of bark in linden roundwood (1.13). For more detail on the calculation method, see Milakovsky
and Fedichkina (2015), WWF Russia, Vladivostok.
36
Analysis of Timber Exports from the Russian Far East in 2015
Figure 7. Roundwood equivalent of linden timber exported from Primorsky
Krai, m3
roundwood
lumber
plywood
total roundwood
equivalent
An analysis of linden exports from Primorsky Krai shows stable growth in
sawnwood exports (by 30—35% per year) accompanied by a decline in linden
roundwood exports. Calculations of roundwood equivalent of export volumes
reveal steep growth in the linden harvest from 2009 onwards. Several factors
fostering abrupt growth in these high value timber exports can be identified. The
first is the elimination of logging restrictions after the new Forestry Code was
enforced; another is high demand in China for linden timber and a relatively
high export price; and a third factor is a relatively easy harvest of these species
(for their large stem sizes) and the availability of forest tracks (linden stands
are located in areas where other tree species had previously been logged). In
addition, all this occurs against a background of inefficient forest management
and weak government control.
Today, the scale of linden removal from the forests of the Russian Far East
both for export and domestic demand (it is used for cottage and steam bath
construction) is so large that a possible complete prohibition of the linden
harvest and exports has been considered in Primorsky Krai.
Of all linden exporters, only Roshchinsky KLPH holds an FM FSC-certificate.
Its share is less than 1% (2,422 m3) of total linden lumber exports. Geographically,
linden exports are vast and primarily include the northeast provinces of China,
Japan, and Vietnam. In addition to resellers, Chinese importers of linden lumber
from Primorsky Krai include wood processing factories that produce wooden
construction materials, stationery, pencils and other utensils.
Export of high value timber
37
Table 27. Leading producers of linden timber exported from the Russian Far East in 2015
Name
m3
%
Linden roundwood
CJSC LES EXPORT (Primorsky Krai)
146
40,47
2 LPO POZHARSKY LTD. (Primorsky Krai)
1
130
35,89
3 LESOZAVODSKY LPK LTD. (Primorsky Krai)
80
22,28
Total for the 3 producers
357
98,65
Total roundwood
362
100
25,390
17,59
2 OLYMP PLUS LTD. (Primorsky Krai)
22,043
15,27
3 SORENTA LTD. (Primorsky Krai)
18,106
12,54
4 PRIMORSKY LES LTD. (Primorsky Krai)
4,827
3,344
5 DALNIY LTD. (Primorsky Krai)
4,644
3,217
6 ONYX PLUS LTD. (Primorsky Krai)
4,337
3,005
7
1
Linden sawnwood
PRIMTRUST LTD. (Primorsky Krai)
TANDEM DV LTD. (Primorsky Krai)
4,229
2,93
8 LESPROM DV LTD. (Khabarovsky Krai)
3,738
2,59
9 OJSC ROSHCHINSKY KLPH (Primorsky Krai)
2,422
1,678
10 OJSC CHUGUEVSKAYA LPK (Primorsky Krai)
2,219
1,537
Total for the 10 producers
91,959
63,7
Other
41,839
28,98
Producer unknown
10,555
7,312
Total linden lumber
144,354
100
4,407
29,35
2 VYMPEL-PROF LTD. (Khabarovsky Krai)
1,758
11,71
3 GLORIA LTD. (Primorsky Krai)
1,541
10,26
4 CJSC LESOZAVODSKY SHPON (Primorsky Krai)
899
5,99
5 REGION LTD. (Khabarovsky Krai)
893
5,95
6 TRANSEXPORT DV LTD. (Khabarovsky Krai)
862
5,75
7
703
4,69
439
2,93
361
2,41
308
2,05
12,174
81,08
Other
2,840
18,92
Total for linden plywood
15,015
100
1
Linden plywood
NAI LI LES LTD. (Evreyskaya Autonomous Oblast)
PRIMTORGINVEST LTD. (Primorsky Krai)
8 SOLE PROPRIETOR KEPTENE (Primorsky Krai)
9
ZAVOD STROITELNYKH IZDELIY PRIAMURSKY LTD. (Evreyskaya
Autonomous Oblast)
10 SORENTA LTD. (Primorsky Krai)
Total for the 10 leading producers
38
Analysis of Timber Exports from the Russian Far East in 2015
6. EXPORT
OF FSC-CERTIFIED
TIMBER
S
ince the 1990s, new market instruments to ensure sustainable forestry
have been developed globally, including voluntary forest certifications. In
Russia, a marked increase in forest certification by the FSC (Forest Stewardship
Council), an independent agency whose mission is to promote responsible forest
management, has been observed. The FSC promotes management of forests
in ways that are environmentally sound, socially beneficial, and economically
prosperous. Forest certification is most efficient where customer demand for
certified products is high, and this, in turn, depends on purchasing power and
customers’ willingness to pay for products that come from responsible sources.
In Russia, domestic demand for FSC-certified products remains too low
to impact the logging companies. Therefore, the main factor driving FSCcertification in the Russian forestry sector is exposure to international trade and
capital markets, primarily the EU, the US, Canada, Japan, Australia, and New
Zealand. China is not yet an environmentally sensitive market. A low purchase
price and stable timber supply remain the major drivers of wood product
imports in this country.
Nearly 100% reliance on the Chinese market creates even weaker conditions
for the forest certification development in the Russian Far East compared
with other Russian forest regions located closer to the European markets. To
compare with, in 2015 the share of FSC-certified forests in total commercial
forests in the Russian Far East was 17% (or 5.4 mln ha), whereas in the Russia’s
Barentz ecoregion, which exports its products to the European Union, this share
amounted to 41% (Fig. 8).
Figure 8. Comparison of FSC-certification in Russia’s Western and Eastern
regions
FSC-certified Forests Share
of Barents Ecoregion’s Commercial Forests
41 %
59 %
FSC
non-FSC
Export of FSC-certified timber
39
FSC-certified Forests Share
of Amur Ecoregion’s Commercial Forests
17 %
83 %
FSC
non-FSC
Source: FSC Russia, «Certificates holders as of March 24, 2016»
Among the largest harvesting and wood processing companies in the Russian
Far East, the following two companies are FSC-certified: the Terneyles Group
and RFP Group Holding. The Terneyles Group holds three ‘combined’ FM/
CoC certificates (forest management and supply chains) covering a territory of
2,828,849 ha (concessions of OJSC Terneyles, OJSC Amgu, OJSC Roshchinsky
KLPH) and four supply chain (CoC) certificates (for OJSC Terneyles, OJSC
Roshchinsky KLPH, CJSC STS Technowood, CJSC PTS Hardwood). Yet, not all
of the concessions of the RFP Group are FSC-certified. Some of the companies
that are part of RFP Group Holding (OJSC Flora, OJSC Dallesprom, Kenny Ltd.,
Vostoklesinvest Ltd.) have their own ‘combined’ forest management certificates,
covering 2,576,957,83 ha. In addition, the RFP Trading House holds a supply
chain certificate (FSC CoC) and is responsible for the centralized sale of wood
products supplied by harvesting and wood processing companies of RFP
Group Holding. In all, eight forest management certificates have been issued
to the following Russian Far East companies: OJSC Terneyles, OJSC Amgu,
OJSC Roshchinsky KLPH, OJSC Flora, OJSC Dallesprom, Kenny Ltd., and
Vostokinvest Ltd. (Table 28).
FM (forest management) certificates are issued to companies that have
successfully obtained their forest management certification in accordance with
FSC principles and criteria: compliance with the law, social responsibility,
respect for the rights of personnel, and compliance with environmental
requirements including conservation of high value forests (HCVF). In the
context of the Russian Far East, the latter implies conservation of intact forest
landscapes (IFL) defined as intact natural ecosystems nearly free of human
impact and with territories sufficient to sustain biodiversity. Largely due to their
impressive territories, IFL forests help conserve not only individual flora and
fauna species but also entire forest ecosystems, ecosystem complexes, and key
ecosystem functions. In the south of the Russian Far East intact forest landscapes
are largely composed of Korean pine-broadleaf forests. These forests contain
high value CITES-protected tree species, the Mongolian oak and Manchurian
ash, providing habitat for the endangered Amur tiger and the Amur leopard.
Pressure from the industry on these forests has always been more severe than
on boreal forests in the north less accessible for logging.
In many Russian FSC-certified companies that work in regions where the
share of IFL forests in commercial woods is high (eg., Siberia and the Russian
Far East), protection of IFL does not generate much enthusiasm. On average,
only 20% of IFL forests located in the territories of Russian FSC-certified logging
40
Analysis of Timber Exports from the Russian Far East in 2015
companies have special status as protected areas. Therefore, FSC-certified
companies will soon likely have to increase the share of protected old-growth
forests if they wish to retain their certificates. In the Russian Far East, Terneyles
concessions have the largest share of protected IFL forests. In 2013, WWF and
Terneyles signed an agreement on the protection of nearly 600 thousand ha of
high conservation value forests, including IFL forests7.
This problem will be the most pressing issue for companies of the RFP
Group, operating in large territories covered by IFL forests and woodlands. In
the territory of Dallesprom alone (which contributes 8% to total timber exports
from the Russian Far East), up to 700 thousand ha of intact forests are not
protected. At the same time, FSC-certified Russian Far East logging companies
highlight that it is not possible to entirely exclude vast intact forest landscapes
from commercial use without seriously impairing the bottom line of the Russian
Far East forestry sector. Therefore, logging companies suggest reaching a
compromise by identifying and protecting, above all, top-priority (most valuable
in terms of biodiversity) IFL forests. In 2015—2016, in an effort to develop a new
national FSC standard in the Russian Far East, an regional commission was set
up to develop a special methodology for IFL forests zoning in this region. At
the time that this paper was written, the commission members (Terneyles, RFP
Group, WWF-Russia and FSC representatives) were testing this methodology
on Terneyles concessions.
Overall, the share of timber harvested in FSC-certified forest areas in total
timber exports from the Russian Far East is not greater than 30% (varying
between 2.1 and 2.5 mln m3, as estimated based on Tables 28 and 29). That said,
the shares of Mongolian oak, Manchurian ash, and linden harvested in FSCcertified areas in total exports of these woods are not greater than 1% for oak
and linden and approximately 2% for ash (Table 30). Most FSC-certified timber
exports are larch, spruce, birch, aspen, and other coniferous and softwood
deciduous species.
7
http://www.wwf.ru/resources/news/article/11489
Export of FSC-certified timber
41
Table 28. FSC-certified logging companies (FM/CoC – forest management and supply chains)
Name
Share in total timber
exports from the
Russian Far East,
(8,064,436 m3), %
Certified area, ha
Export volume, mln m
Terneyles (Primorsky Krai)
1,990,011.00
0,7
9
Dallesprom (Khabarovsky Krai) — (RFP)
1,681,768.83
0,65
8
Flora (Khabarovsky Krai — (RFP)
476,405.00
0,547
7
Roshchinsky KLPH (Primorsky Krai)
473,251.00
0,08
1
Amgu (Primorsky Krai)
365,587.00
0,05
0.6
Kenny (Amurskaya Oblast) — (RFP)
176,167.00
0,16
2
Vostoklesinvest (Amurskaya Oblast) — (RFP)
139,625.00
0,16
n/a
5,405,806.83
2,3
28
Total certified area
3
Table 29. FSC-certified logging companies (СоС – Supply chains)
Name
Supply volume, mln m3
Share in exports, %
Torgovy dom RFP Ltd.
1,7
21
OJSC Terneyles (Primorsky Krai)
0,7
8
OJSC Roshchinsky KLPH (Primorsky Krai)
0,08
1
PTS Hardwood
0,007
<1
Technoles
0,001
<1
Amurskaya lesopromyshlennaya kompaniya
0,07
1
2,5
31 %
8,064,436
100
Total FSC-certified supply
Total exports
Source: WWF Russia, 2015
Table 30. FSC-certified exports of high value species
Producer
Volume, m3
Share in total exports of this tree species
Exports of oak produced by FSC-certified companies
Roshchinsky KLPH (FM-CоC)
1,071
<1 %
Hardwood (CоC)
2,379
<1 %
Exports of ash produced by FSC-certified companies
Hardwood
3,595
1.7 %
Roshchinsky KLPH
1,067
<1 %
Exports of linden produced by FSC-certified companies
Roshchinsky KLPH (FM-СоС)
RFP (CоC)
42
Analysis of Timber Exports from the Russian Far East in 2015
2,422
<1 %
187
<1 %
7. CONCLUSION
I
n 2015, wood product exports from the Russian Far East consisted primarily
of unprocessed timber. The share of end-use products remained negligible.
The share of sawnwood was also rather insignificant amounting to only 1/5
of total timber exports. Chinese markets received more than 90% of timber
exported from the Russian Far East, which may pose some economic risks for
the export-oriented region. Given that China itself has a very diversified market
of timber suppliers it has more leverage over Russia than vice versa in terms of
shaping timber purchasing/sale prices. This reliance on one purchasing market,
in combination with the underdeveloped value-added processing sector,
supports Russia’s current unsustainable forest management practices based on
the removal of high value export-quality grades from natural forests, including
from high conservation value forests.
In the absence of a transition to more sustainable forest management
patterns, which would imply more diversified trade markets, an increased share
of value-added wood products, reforestation, and forest plantation for export
purposes, the Russian Far East will very soon experience the depletion of its
high conservation value forests and the eventual degradation of intact forest
landscapes.
A pressing concern is the annual increase of logging of high value timber
species in the south of the region. Thus the calculations of linden exports into
roundwood equivalent reveal a steep growth of linden harvest well in excess of
the allotted amounts. There is enough evidence in the discussed export statistics
to suggest that the current logging rates of linden, oak and ash species go well
above the approved volumes, which in turn leads to the degradation of the
forests crucial for sustaining biodiversity and economic sustainability of these
ecosystems. Illegal logging of linden forests remains a serious concern for many
residents living in remote forest communities in Primorsky and Khabarovsky
provinces dependent for their livelihood of bee-keeping and making linden
honey.
The share of FSC-certified timber in high value timber exports (oak, ash and
linden) remains very low constituting less than 1% for oak and linden, and 2%
for ash; whereas the overall share of FSC-certified timber in the total timber
exports from the region is between 28% and 31%. The FSC share will grow if
export markets are eventually diversified, and if more timber is sold to Japan
where consumer demands for certified timber products is highest in East Asia.
Perhaps it is good time to tackle the lack of special timber sea terminals
in the Russian Far East. Timber cargo delivered by maritime routes presents
a more cost effective option as compared to terrestrial routes. In addition,
shipping timber by sea routes implies more diverse destinations enabling, in
turn, a diversification in the current product mix (more demand of the end-use
products) and an increased access to final consumer markets, thus bypassing
resellers in the Northeast China border regions.
Conclusion
43
Elena Feditchkina Tracy
WWF-Russia
Alexey Lankin,
Pacific Institute of Geography, the Russian Academy of Science
Analysis of Timber Exports
from the Russian Far East in 2015
Picture on the cover — A. Khitrov
Layout — Yu. Fomenko
This publication is not for sale and is distributed free of charge
Intact forest landscapes (IFL)
within FSC-certified forest leases
World Wildlife Fund (WWF), Amur Branch
690003, Vladivostok, Verkhneportovaya Str., 18 А, tel./fax: +7(423) 241-48-68, [email protected]