Latvian Forestry Earnings Up, Despite Drop In Sales Volume

A reduction in the logging of state forests throughout the last 12 months has led to a fall in the availability of Latvian logs, which has caused prices to rise. Traditionally, UK markets have attempted to resist paying inflated amounts, but with supply declining steadily, they have been required to follow other countries in doing so, the Timber Trades Journal reports. In 2012, there was a 12 per cent reduction in the volume sold by Latvian State forests (LVM), but earnings climbed higher as a result of increased prices and improved efficiency. Heavy snowfall was a feature of the harsh recent winter and in December, around 200,000 m3 of the country’s woodland was removed due to the damage caused. However, this led to a €2 million investment from LVM in new acquisitions of private sector forests, resulting in the addition of an extra 1,500 hectares. In the UK, there has been “stronger-than-expected” demand for Latvian plywood, with customers believed to be making preparations ahead of the typical summer mill closures, which have seen production cease until the second week of August. According to the report, inventories are said to be at extremely low levels as large amounts were sold prior to the July closures. UK stocks are also believed to be minimal and Latvian mills have typically extended lead times to between ten and 12 weeks. Prices for plywood produced in the country increased in May and a further rise of as much as five per cent is expected when production restarts. The situation in Sweden is much the same, with a shortage of the sawlogs required by independent mills leading to a surge in prices. Swedish softwood exports to Europe declined by 11 per cent year-on-year in the first four months of 2013, with redwood exports falling by 15 per cent. Meanwhile, trade in Asian markets has risen, with redwood exports to Japan up by 18 per cent and those to China nine per cent higher over the same period. HD FestForest provides forest management in Estonia, Latvia and Lithuania and is a subsidiary company of HedeDanmark. Taylor Scott International