“During the first quarter of 2006 log prices were stable, and in some pine dimensions prices became cheaper,” he said. “The reason was that availability of pine from forests during the period January to March was higher, according to felling permit information.”
Mr Krasavcevs said that, in general, the log supply situation was stable, but he did highlight some changes. “Firstly, there will be higher volumes of hardwood logs. According to the felling plan in state forests, during the next five years the availability of birch and aspen logs will grow.
“Secondly, compared with 2005, the softwood felling volumes from private forest owners will be smaller. There are at least two reasons for this. One is that last year, after the storm, private forest owners increased fellings sharply and now the outcome from those regions is smaller.
“To balance the softwood log supply, this year Latvijas Valsts Mezi (Latvian State Forests) is offering higher log volumes compared with 2005. The situation is the same in Estonia – during last year the state forests helped the market from overcooling by slowing the supply. This year, when in general the supply is smaller, the state forests are helping to balance the situation by increasing supplies.”
Mr Krasavcevs said another reason for the smaller softwood supply is very poor demand for pulpwood from Swedish companies, resulting in weak prices and problems with sales of pulpwood.
“Forest owners usually don’t want to cut forests if they can’t sell part of the logs – and about 20% of fellings is pulpwood, which at present is difficult to sell.”
The import of softwood logs into Latvia is also stable this year, he said. In the period from January to February, Latvia imported 121,000m3 (down 4-5%). Mr Krasavcevs said the decline is due to smaller deliveries from Belarus which are down 49%, to 6,700m3. However, deliveries from Russia have grown 12% to 106,000m3.
Turning to sawnwood export, Mr Krasavcevs said that during the first two months of 2006, sawn timber exports were up 6.7%. But, he said, the bigger volumes are not going to the UK where deliveries declined by 9.9%. In 2005 the UK’s share of timber exports was only 49% compared to 72% in 2004.
This year Latvian companies are concentrating on new markets in Europe – such as Germany and the Netherlands. Deliveries to the Japanese and eastern Mediterranean markets are also growing again.
This, said Mr Krasavcevs, means the diversification of markets and a trend towards higher added value. “This is reinforced by the fact that in the first two months of 2006, the export of planed timber grew by more than 72% compared with 2005,” he added.
