Forest industry fears wood shortage will slow paper production

Forest owners downplay industry worries

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Declining sales of timber threaten to stop Finnish paper mills, warns the Finnish Forest Industries Federation.
      The federation’s President and CEO Anne Brunila says that the wood trade is drifting into an “incomprehensible situation”, with industry not getting the raw material that it needs from private forests, where possibilities for felling are constantly left unused.
     
Sales of wood moved ahead when the government decided in July to halve the tax on wood sales until late next year, and to continue a 25 per cent tax break until the end of 2010. The Central Union of Agricultural Producers and Forest Owners (MTK) says that sales of wood was more brisk in August than at any time in ten years.
     
In August wood sales rose to the level sought by industry, but in the past couple of weeks, there has been a decline.
      The forest industry says that sales of wood have declined by one third since late August.
      “The future of the forest industry in Finland will be decided in the coming weeks. Because of the wood shortage, it will not be possible to keep all factories in operation. If wood sales do not rapidly go back to the level where they were in August, the industry will have to adapt its production to the predominant raw material situation”, Brunila says.
     
The industry calculates that at the present rate, it will get no more than 40 million cubic metres of wood from private forests, which is far less than the 60 million that the industry needs to keep going. Anu Islander, a forest expert of the Forest Industries Federation, says that industry uses a total of 75 million cubic metres a year.
      The industry will not speculate as to how many mills might be shut down if not enough wood is brought from private forests onto the market.
      The federation is also careful not to point fingers at anyone, but it states that “certain contradictory messages linked with the wood trade have clearly caused confusion among forest owners, and weakened the functioning of the wood market”.
     
MTK forestry director Antti Sahi denies that there is any wood shortage. He says that August and September cannot be compared with each other.
      “In the two final weeks of August, record amounts of wood were sold. It is quite clear that after such weeks, there is a slower period, when both sellers and buyers reassess the situation”, Sahi says, and points out that at the rate of sales in August, felling for the whole year would have reached more than 100 million cubic metres.
     
Sahi says that the industry cannot give assurances to forest owners in all sales that the trees can be felled during the period of lower taxation. He also says that imported wood is still coming in.
      “This only shows that the industry has such good wood reserves that there is no wood shortage. The industry already has the trees. There is no panic here”, Sahi says.


Previously in HS International Edition:
  High price of wood and other rising costs lead to cuts in forest industry (11.9.2008)
  Government promises quick aid to communities hit by paper industry cutbacks (11.9.2008)
  NEWS ANALYSIS: Weak dollar and false self-incrimination hurt paper industry (11.9.2008)
  Stora Enso pulp mill closed down in Kemijärvi (28.4.2008)

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