June 10, 2009 - The Finnish forest industry’s January-May timber procurements from private forests amounted to just 2.9 million cubic metres, representing only 36% of the amount purchased in the corresponding period of 2008, according to the Finnish Forest Industries Federation (FFIF).

The month-on-month increase was 20% and the total amount procured in May was about 349,000 cubic metres.

Purchases of pine logs were down 56%, spruce logs 52% and birch logs 71% from January-May 2008. Purchases of pine pulpwood were down 71%, spruce pulpwood 62% and birch pulpwood 71% from the corresponding period of 2008.

LOG SHORTAGES AFFECTING SAWMILLING OPERATIONS

In May, sawmills continued to face difficulties in procuring sufficient amounts of logs to feed their production processes even at the present, decreased capacity-utilisation rates. A predominantly-softwood cutting stand that can be harvested this summer is thus in good demand.

"It is in the interest of forest owners and sawmills to keep a steady flow of timber moving in all demand circumstances, but log shortages are causing difficulties for sawmills at present," said senior vice president Antro Saila, who is in charge of competitiveness-related issues at the FFIF.

"The profitability of sawmills was weak in the first quarter and they will not be able to survive these shortages for very long. What is more, Finnish raw material costs remain higher than in the competing countries," Saila said.

Forest owners should, without a doubt, take advantage of the tax relief on timber sales revenues; the relief on offer to timber sales concluded this year is 50%, while sales concluded in 2010 receive a 25% relief.

TIMBER PRICES LARGELY UNCHANGED FROM APRIL

The average stumpage price of pine logs rose by one percent to €42 per cubic metre, while the stumpage price of spruce logs fell by one percent to €43 per cubic metre, when compared to the prices fetched last April. The average stumpage price of birch logs fell by two percent to €37 per cubic metre.

The average stumpage prices of pine and birch pulpwood fell by one to three percent and were €14 and €13, respectively. The average stumpage price of spruce pulpwood was unchanged at €19 per cubic metre.

SOURCE: Finnish Forest Industries Federation