Russia might delay timber export duty hikes

Ministers Väyrynen and Nabullina met in Helsinki

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Russia might postpone its planned hikes on export tariffs on raw timber again.
      Russian timber has long been am major source of raw material for Finland’s pulp and paper industry. Russia has seen the introduction of export tariffs on the raw material as a way to create an incentive for developing the country’s own wood processing industry.
     
“Last year we made a decision to delay incases in wood tariffs by a year. Now the Russian government is discussing the question of postponing the increase in the wood tariffs for another year, and that the present tariffs would remain in force”, said Elvira Nabiullina, Russia’s Minister for Econoimc Development in Helsinki on Sunday.
      Nabiullina was in Helsinki for talks with Finalnd’s Minister of Foreign Trade and Development, Paavo Väyrynen (Centre).
     
Nabiullina said that preparations to cancel the tariff hike are already at an advanced stage, and she expects a decision on the matter to be made in a couple of months.
      “We need to consider the broader global market situation, which affects forest industry companies more than the export tariffs on wood”, Nabiullina said.
      Russia hopes to attract investments in its forest sector, from Finland as well.
     
Väyrynen believes that if Russia were to drop the wood tariffs, investments in the country’s forest industry would increase.
      “In Finland, we are under the impression that tariffs have hurt both the Russian and Finnish economy. They also do not advance getting more investments into Russia”, Väyrynen said at a press conference of the two ministers.
      Nabiullina noted that exports of raw timber from Russia have declined significantly this year.
      “Exports of raw timber have come down considerably more than those of sawn timber, for instance. In the first half of this year, exports of raw timber have declined by nearly 50 per cent, whereas exports of sawn timber has gone down by only 30 per cent.”
     
Sore spots of the forest industries of Russia and Finland will be discussed at a prime ministerial level at a forest summit to be held in St. Petersburg in October.
      The situation is most difficult in birch, which has to compete with the fast-growing short-fibre raw material; eucalyptus can be used to produce pulp at half of the price that birch pulp costs. For that reason, it is quite clear that we are not able to pay tariffs for the raw material”, Väyrynen said.
     
Russia had originally planned to raise the tariff on raw wood to EUR 50 per cubic metre from the beginning of the year. In November last year, Prime Minister Vladimir Putin said that the increase would be postponed by 9-12 months.
      Finland imports about 15 million cubic metres of raw timber from Russia each year. In April 2008 Russia raised the export duty on raw timber from EUR 10 to EUR 15 per cubic metre.


Previously in HS International Edition:
  Väyrynen remains hopeful on partial solution to timber tariffs dispute (27.5.2008)
  Commissioner Mandelson: EU cannot pressure Russia into removing wood tariffs (18.2.2008)
  Putin defends wood tariffs during last press conference of presidency (15.2.2008)
  Russian minister says Halonen influenced decision to postpone wood tariff hikes (28.11.2008)
  Putin: Russia to postpone implementation of wood tariffs (13.11.2008)

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