TDUK: Impact of trade restrictions on Russia and Belarus

Timber Development UK ruled over a pan-European conference with the top timber and sawmilling associations on March 7th to coordinate action throughout the continent. The sanctions placed on Belarus were unanimously supported at this conference, and it is expected that these penalties would be widened to restrict timber trade with Russia.

It should also be noted that both Russia and Belarus are key suppliers of timber to the European and worldwide markets, with Russia accounting for around 10% of the European softwood market, thus these restrictions will have a significant impact. While neither nation is a major supplier of direct imports into the UK, there is still doubt regarding the number of processed items that the UK imports where the raw ingredients are from Russia. Another point to consider is that timber from Ukraine may soon be labelled as "conflict timber" and prohibited under UK and EU Timber Regulations (UKTR).

According to the TDUK, financial sanctions imposed by multiple governments to exclude many Russian banks from the international SWIFT payment system have effectively shut many businesses out of international trade because payments cannot be made or received; the UK government has requested that British ports refuse entry for Russian-owned or registered vessels; and the EU has imposed trade sanctions on Belarus covering a wide range of commodities, including timber.

It goes on to say that the sanctions are already having an impact on the trade in timber and timber products, and that many of its members have already stated that they are ceasing trade with Belarus and Russia, and that, most recently, PEFC announced that they are reclassifying Russian and Belarussian products as "Conflict Timber" and thus ineligible for certification.

In the face of this humanitarian catastrophe, the industry has banded together to focus on how we can help Ukraine, limit timber loss, and preserve sustainable forest resource management. Alternative sources to substitute Russian imports exist in most situations across the market, although pressure on these alternative sources will be greatly enhanced. As a result, several product categories are expected to be under pressure in the short to medium term. Because the UK does neither import or export Russian logs, this trade brief concentrates on the sawn wood and panel goods industries. We anticipate that the principal impact of these limitations on our UK members will be in the larger impact on the worldwide market.

Although, as stated in this trade note, panel goods and joinery are expected to take the majority of the first effect, with limitation also having an influence on consumer trust and general demand in the industry.

TDUK has issued a trade note to its members outlining the impacts it predicts in the UK, which will be updated as the situation evolves.