Financial instruments in the trade of forest products

Abstract

The development of exchange trading in Russia is an urgent topic in connection with the modern transformation of the market for timber products under the influence of the pressure of sanctions restrictions on Russian producers, the restriction of supplies to Europe. Another important aspect of the relevance of the topic is related to ensuring transparency and reducing the shadow relations of participants in the market. The purpose of the study is to determine the current situation of stock trading and to identify the pricing patterns of spot and futures quotations for timber products. The paper highlights a number of issues of the current situation of exchange trading of timber products in Russia and world exchanges, highlights the specifics of exchange trading of timber products, and identifies the main factors determining the low liquidity of exchange trading. In 2021, the volume of timber trading on the Russian stock exchange amounted to 1% of the total volume of harvesting, which is the minimum trading volume, and therefore does not allow the formation of a relevant market price index. The paper considers the pricing of spot and futures quotations for timber products. The dynamics of bleached softwood pulp futures on the Shanghai Stock Exchange (SHFE), pulp and paper futures on the Norwegian Stock Exchange (NOREXECO) are analyzed. Modern measures and measures for the future up to 2025 aimed at activating exchange trading in LPC products, increasing the liquidity of the futures market for timber products are considered. The study shows the advantages of exchange trading, and possible prospects for the development of exchange trading of timber products in Russia.