Romanian wood industry under pressure, with high timber auction prices and booming imports

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After a difficult 2017-2018 harvesting, due to changes in the forestry code in 2017, that negatively influenced the quantities of roundwood on the market, especially of lower quality assortment, thus leading to excessive prices, the wood industry is getting ready for a new harvesting season. 

The hope of the industry is that following the changes done this summer in the Romanian Forest Code, Romsilva, the Romanian Forest agency that manages state owned forests, will modify its roundwood sales rules and increase the volume of roundwood on the market. 

Huge volumes of standing timber not harvested

In the last harvesting season and due to prior changes in the forest code, thinning volumes where not sold in timber auctions but Romsilva, tried to harvest this volume itself to then put it on the market. This change of strategy did not work and as a result most of this thinning volume was not harvested. At the same time and due to the same changes in regulations most of the timber affected by wind storms was also not harvested. Romsilva estimates that the total volume it did not harvest is of 1,4 million m3 but other sources report up to 2 million m3. The absence of this volume in the 2017-2018 season led to much higher prices, especially for lower assortments (firewood/pulpwood). Another consequence of these price rises is that harvesting companies that bought standing timber at higher prices were subsequently not able to sell into the market the volumes they had at a profit, leading here also to volumes of standing timber not harvested. 

Rising imports

 
   

Excessive prices of logs in Romania in the past harvesting season led to record imports of wood products.

Imports of softwood logs were at an average of 150,000 m3 / month, with a peak reached in March of almost 200,000 m3. The origin of the imports started to vary. In March, the top 4 sources of imports were: Ukraine, with 68,000 cubic meters, Slovakia with 40,000 cubic meters, Poland with 38,000 cubic meters, Germany with 16,000 cubic meters, while smaller quantities came from the Czech Republic, Russia, Bulgaria, Austria.

Romanian imports of softwood lumber also increased significantly. During March and April, imports amounted to over 40 000 m3 / month. In March, imports from Ukraine amounted to 21,000 cubic meters, while another 19,000 cubic meters came from Germany, 6,000 cubic meters fromn Austria and smaller volumes from Belarus and the Czech Republic.

As for the hardwood assortments, the lumber imports amounted to more than 10,000 cubic meters/month.

Reduced Wood Panel Production in Romania

The reduced log volume and unsustainable prices recorded in the autumn of 2017 and the spring of 2018 has led to strong reductions in purchasing of the wood panel industry in Romania. Some of the factories have stopped their production & others rely massively on imports of logs. 

Conclusions

The Romanian woodworking industry has responded to the resource crisis and exaggerated prices by increasing imports and reducing its purchasing activity in Romania.  The autumn is coming soon and its not clear how this situation will play out in the next harvesting season. Romsilva could potentially put on the market the volumes it did not harvest in the past season on top of the 1-1,2 million that it should sell as standing timber in this coming season. Such a move could bring back more reasonable prices in the market. 

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