Belarus Timber Trade – State of the Industry in 2018
According to the Trade and Economy Group of the Embassy of the Republic of Belarus, in 2018 7.2 mln. cub.m of wood were processed in Belarus; production of woodworking sector grew in 2018 by 14.7 %; overseas sales increased by 31.6 %; while sawnwood sales prices remained stable.
Belarusian forests fund
For a number of the key indicators characterizing forest fund (woodiness of the territory, the area of the woods and stock of growing wood in terms of per capita), Belarus is among the top ten forested states of Europe.
Forestry management in Belarus is operated by the Ministry of Forestry of the Republic of Belarus, which is successfully implementing the principles of sustainable multipurpose forest management, at the same time it remains committed to environment protection and renewal of the forest fund. Key indicators of the Belarusian forests management (from 1994 to 2018):
- The total area of forest fund lands increased form 8676,1 thousand hectares in 1994 to 9582,0 thousand hectares in 2018.
- Forested lands increased by 889,2 thousand ha from 7371,7 to 8260,9 thousand ha;
- The area of Belarus under forests reached 39.8 per cent (increased by 4.3%);
- the total stock of standing timber increased by 702,8 million cubic meters and amounted to 1796,0 million m3 (including in Mature and overmature stands – 250,4 million m3 and constituted – 296,0 million m3);
- the stock per 1 ha. of forested land increased by 69 m3 and reached 217 cubic meters per 1 ha.; the stock of mature and overmature plantings increased by 54 m3 and reached 267 m3 per 1 ha.;
- average age of plantings increased from 44 to 56 years.
- Species composition of forests: pine – 50,3%, spruce – 9,2 %, oak – 3,4%, birch – 23,2%, alder – 8,5%, aspen – 2,1%, other species – 3,3%.
- In 2018 Ministry of Forestry of Belarus reforested the territory of 41 thousand ha, planted new forests on the territory of 35 thousand ha.
In 2018, around 7.2 mln.cub.m. of wood were processed in Belarus. The forest industry of Belarus operated under ban on the export of unprocessed round timber. The mills under the Ministry of Forestry of Belarus exported forest products and provided services for more than $ 140 million in 2018, which is 94% compared to 2017. In comparable conditions, excluding sales of roundwood due to the development of woodworking capacities, the growth rate of exports fixed at 174%.
Belarusian timber, woodworking, pulp and paper industry concern Bellesbumprom output
In 2018 the export by the companies of the Belarusian timber, woodworking, pulp and paper industry concern Bellesbumprom increased overseas sales by 31.6% in comparison with 2017. In 2018 Bellesbumprom mills exported over 72% of their output, the export volume amounted to $562 million. Structure of export – furniture – 22.3%, MDF – 17.6%, paper and cardboard – 17.1%, plywood – 14.4% and chipboards – 11.2 %. Geography export of Bellesbumprom companies covers 58 countries.
The largest sales markets were: Russia ($ 185.3 million or 33% of total exports), Poland ($ 108.8 million or 19.3%), Ukraine ($ 48.2 million or 8, 6%), Lithuania ($ 43.5 million 7.7%) and Azerbaijan ($ 18.2 million or 3.2%). Germany is among the top EU buyers ($ 15.4 million or 2.7%).
During press-conference in February 2019 Chairman of Bellesbumprom Yuri Nazarov noticed: “We are still largely dependent on the Russian market. In 2019 we will follow the policy of redirection of our products to the European market. Despite the geographical distance and the high level of development of forestry industry and woodworking industry in the USA and Canada – Bellesbumprom companies have also found their niche on these markets and have started selling wood panels and furniture.”
Bellesbumprom enterprises put persistent efforts into penetrating the markets in Africa, Asia, and North America. In 2018 they started working in China, Egypt, Kenya, and the United Arab Emirates. Deliveries to Bangladesh, India, Thailand, Sri Lanka, and Bahrain rise gradually. Even the possibility of selling wooden houses to Japan is under consideration. A delegation of potential Japanese buyers has recently visited the Domostroenie mill to get familiar with the Belarusian technology to build wooden houses.
One of the top-priority of Belarusian woodworking sector Yuri Nazarov mentioned Development of investment projects in woodworking and furniture production, creating of new mills (including joint ventures with foreign capital – Ivatsevichidrev – furniture production, Shklov – sawmill and woodworking, in the territory of the FEZ “Vitebsk” – for the production of wood pellets).
Main Belarusian export sales figures
Belarusian Universal Commodity Exchange auction sales
In 2018, the amount of export transactions of timber products at the Belarusian Universal Commodity Exchange (BUCE) totaled 347 mln EUR, which is 40% more than in 2017.
Sawn timber and wood chips were the main export commodities. Their cumulative sales via BUCE reached 329 mln EUR
Sawn timber export
The biggest buyers came from the following countries: Lithuania (47 companies accounting for 26.2% of transactions), Germany (13 companies – 24.2%), Latvia (36 companies – 16.4%), Estonia (17 companies – 15.0%), and Czech Republic (3 companies – 2.8%).
Compared to Q4 2017, Q4 2018 saw a boost in exports of sawn timber via the exchange in both monetary terms and in kind – by 21.4% and 27.6%, respectively. Sawn timber sales in 2018 largely exceeded those of 2017 by 31.0% in kind and by 49.2% in monetary terms.
Compared to Q3 2018, Q4 did not see any significant changes in the softwood sawlog prices due to its abundant supply. A slight bump in prices recorded in the middle of the quarter was caused by intensified activity of woodworking companies that failed to stock up on raw materials during the annual exchange auction and had to catch up by increasing their purchases at regular auctions.
Nonetheless, Q4 2018 did see a minor upward movement of prices for sawn timber with 14-19% moisture content (by 3% on average), whereas exchange quotations for timber with natural moisture content dropped by 3.5% compared to Q3 2018. Prices for softwood used in packaging production also fell by an average of 5-8%.
The most active buyers of fuelwood (wood chips, briquettes, and pellets) at exchange auctions came from Estonia (7 companies accounting for 42.0% of the total amount of transactions with this commodity item), Poland (7 companies – 33.4%), Latvia (13 companies – 11.1%), and Lithuania (10 companies – 7.0%).
November 2018 was marked by successful annual exchange auctions for fuel wood chips. Bellesexport (an authorized operator of the Ministry of Forestry of the Republic of Belarus) was the main seller offering 2 434.88 thsd cbm (92% of the total).
Some 26 buyers from 6 countries took part in the auction: Poland, Latvia, Estonia, Lithuania, Austria, and Hungary (in 2017, there were 15 participants from Poland, Latvia, Estonia, Lithuania, and Hungary).
182 transactions worth 53.18 mln EUR were concluded in the course of the auction selling 2 289.78 thsd cbm of wood chips, or 86.5% of the available amount. Due to the competition among buyers, which inflated the initial prices, Belarusian exporters received 1.74 mln EUR of extra revenue.
Fuel wood chips became more expensive as well in December 2018: e.g., when shipped on DAF terms, the price stood at 23.03 EUR/cbm (+14% to Q3 2018).
[Source: Trade and Economy Group of the Embassy of the Republic of Belarus]