Russia contains nearly a fifth of the world’s forest resource, a quarter of it in the Russian Far East (RFE) where Siberian larch, spruce and birch prevail, alongside smaller volumes of high value hardwoods including Mongolian oak, ash, elm, basswood and limewood.
Khabarovsk and Primorsky states form the northern China/RFE border for over 1,000km, extending from the North Korean border in the south/east to the western border of Khabarovsk.
The significant volume of hardwood species available in southern Primorsky and Khabarovsk creates a unique timber resource within Russia’s vast reserves. In southern Primorsky they consist of 50-60% hardwood species.
Four regions – Primorsky state, Khabarovsk state, Amur province and Sakhalin province – represent the main base for production and trade of forest products in the RFE. It is estimated that 40-50% of these forests are inaccessible, but recently announced major foreign investments in forestry and logging will increase the amount of timber accessible.
The accessible annual allowable cut (AAC) in Khabarovsk is estimated at 12-13 million m3 per year although the annual growth rate is estimated at over 30 million m3. During the Soviet Union’s peak harvesting years in the late 1980s, the annual harvest in Khabarovsk reached 12 million m3. By 1994 this had dwindled to 3.5 million m3 but increased slowly to about 4.5 million m3 by 1997. The ruble devaluation of 1998 fuelled a doubling of the annual harvest in the past six years to over 8 million m3 in 2004.
The accessible AAC in Primorsky is estimated at about 6 million m3 per year although the annual growth rate is estimated at 10.7 million m3. During the peak timber harvesting years the annual harvest in Primorsky was about 5 million m3 which decreased to 1.3 million m3 by 1997. Since 1998, the annual harvest has almost tripled to about 3.5 million m3. In 2004, two logging companies accounted for almost 3 million m3 of the annual harvest (85% of total).
Khabarovsk and Primorsky differ from larger timber producing Siberian states due to underlying conditions and forest use. The volume of high-valued, old-growth temperate hardwood species is significant (up to 30% of standing timber) and is unique within Russia.
Primorsky and Khabarovsk export 80-90% of their annual log harvest, with China the major destination as the relatively short hauling distance provides a freight advantage.
While typical logging costs in Primorsky are between US$35-40/m3 delivered to a mill, log export prices for some high quality hardwood species can be as high as US$180-200/m3 delivered to the Chinese border.
As a result of the reliance on log exports, sawn lumber production in both regions is low. Khabarovsk produced only 750,000m3 in 2004 and Primorsky just 500,000m3.
Over half the lumber produced in Primorsky is Mongolian oak, ash, elm and birch hardwood lumber that is exported to China and Japan. The state has a very small value-added industry and its largest valued added company is a Japanese/Russian joint venture company that produces about 150,000m3 per year of sawn lumber and remanufactured products for Japan.
Both the Khabarovsk and Primorsky state governments claim to have policies in place to decrease log exports in favour of domestic log processing. However, neither has made any progress during the past four years despite the total log harvest having almost doubled.
This is due to attractive log export profits compared to marginal domestic log processing profits and exports are likely to continue to grow while they remain more profitable. Any increase in domestic log processing will depend on the speed of improvement in Russian wood processing efficiency, the Russian government’s ability to reduce illegal log exports, and the relative costs of energy and transport.
A major problem for this forest region of Russia is illegal logging and illegal log exports to China. The presence of high valued, large diameter, hardwood logs encourages illegal logging and exports of selected trees. Experts estimate that total illegal logging in these two states is about 20% of the annual harvest but acknowledge that the rate is much higher closer to the Chinese border (estimated at up to 40%). At an average illegal logging rate of 20% for both states, the annual harvest may be more like 14-15 million m3 as compared to the reported harvest in 2004 of about 12 million m3.
