Implications of the Russian roundwood export tax for the Russian and global wood products sectors

Abstract

Russia is the world's largest exporter of roundwood, mainly to China, Finland and Japan. The Russian government recently announced an increase in its export tax on softwood roundwood from the present 6.5% of export product value to 80% by January 2009. The effects of this policy on the world forest sector to 2020 were simulated with the Global Forest Products Model. The predicted results were lower Russian roundwood exports and prices, lower global wood supply and higher world roundwood prices. In response, the USA, Germany and New Zealand would increase production and export of roundwood. Major consumers of Russian roundwood would suffer a reduction in production and export of wood products. By 2020 Russian harvests and roundwood exports would be 49 million m3 (19%) and 51 million m3 (50%) lower, respectively. The price of roundwood in Russia would be 16% lower. This would encourage a modest increase in Russian forest product production: 1–3% higher. However, Russian export revenues would be US $3.4 billion (23%) lower as growth in processed exports would fail to offset reduced roundwood export revenue. Value added in all manufacturing sectors would be US $225 million higher in Russia, while it would be US $1.3 billion lower in Finland and US $728 million lower in China. Owing to the tax on exports the Russian forest stock would be 1 billion m3 (0.3%) higher in 2020.