Released on: May 9, 2008, 12:42 am

Press Release Author: Hakan Ekstrom

Industry: Marketing

Press Release Summary: Russian export taxes for softwood logs increased from 20% to
25% of log value (minimum €15/m3) as April 1, 2008. This timber tariff has gone up
from 6.5% two years ago, and is planned to reach 80% in January 2009.


Press Release Body: Seattle, USA, May 09, 2008 -- Russian domestic log prices fell
sharply in the 1Q 2008 from their peak in the 4Q of last year, according to the
market report Wood Resource Quarterly. Pine sawlog prices declined 22%, softwood
pulpwood prices were down 20% and hardwood pulpwood costs fell just over 15%. The
major reasons for the price declines were an improved log supply thanks to favorable
logging conditions and a substantial reduction in log exports.

Russian export taxes for softwood logs increased from 20% to 25% of log value
(minimum €15/m3) as April 1, 2008. This timber tariff has gone up from 6.5% two
years ago, and is planned to reach 80% in January 2009. Sawmills in Finland, China
and Japan are most directly impacted by the higher costs of Russian softwood logs as
they have relied on imports from their neighbor for many years. Imports of softwood
logs to Europe increased from just over 4 million m3 in 1997, peaked at 10 million
m3 in 2005 and were down to 6 million m3 in 2007. Finland, the largest importer of
logs in Europe, imported 37% less softwood logs from Russia in 2007 as compared to
2006. Although softwood log exports to China were down in the 1Q/08 compared to the
same quarter last year, China has increased its reliance of Russian logs from a mere
530,000 m3 in 1997 to a record of 23 million m3 in 2007.

Although right now, importers of Russian logs are being most impacted by the log tax
hikes, many forest companies in other parts of Europe and North America will be
indirectly effected as the currently Russian-supplied pulp and lumber manufacturers
will search for wood raw-material elsewhere.

Many forest companies in Europe, particularly in the Nordic countries and the Baltic
States are now adjusting their wood raw-material supply strategies, near-term and
long-term, as the costs of logs from Russia are likely to increase further. As of
January 2009, Russian softwood log taxes will increase to a minimum of €50/m3, and
if the new tax is actually implemented, the last shipments of softwood logs will be
leaving Russia in late December this year.

Global pulpwood and sawlog market updates are included in the 50-page publication
Wood Resource Quarterly. The report, established in 1988, also includes regular
updates of pulp, lumber and biomass markets, has readers in over 20 countries.
Press release distribution by PressReleasePoint (http://www.pressreleasepoint.com)

Contact Information:

Hakan Ekstrom
Wood Resources International
Seattle, USA
+44222656
info@wri-ltd.com
http://www.woodprices.com

Web Site: http://www.woodprices.com

Contact Details: Wood Resources International
Seattle, USA
+44222656
info@wri-ltd.com
http://www.woodprices.com