Having vast areas of high-quality forests, Russia tries to attract more investments in the forest sector for domestic timber processing in order to fill in regional and federal budgets to have more funds available for forest protection and rehabilitation. Comprising over 70% of total forestlands in Russia, forests of the Russian Far East (RFE) are distributed unevenly across provinces. Larch, pine and spruce are the dominant conifer tree species in this vast region, while substantial amounts of forest area and timber volumes can be attributed to oak and ash species. Forest area and tree species distribution are mainly a result of long-lasting natural and anthropogenic impacts, such as forest fires, pest outbreaks, territory development, land-use change, timber harvesting and forestry activities. Mature conifer stands are the most important source of timber both in Russia and in the RFE. Over decades, a predominance of mature conifer species in forest composition became a key strategic factor of timber industry development including domestic consumption and export, mainly roundwood (logs). During the last few decades, the RFE and Siberia forests have been a significant source of timber for domestic use and export to the Asia-Pacific region, mainly, the People's Republic of China, Japan and the Republic of Korea. Current administrative and legislative reforms, introduction of a new Forest Code of the Russian Federation (2006), governmental decisions on the forest sector including an increase of export tariffs on raw timber, a decrease of import tariffs on wood-processing equipment and some other measures have initiated changes in the forest sector of the RFE. New Russian Forest Code empowered provincial authorities for more practical actions, including initiation of investment projects in major forested provinces of Russia. The article examines major challenges occurring in the Russian forest sector from the following positions: forest resources and impacts on them, timber available for harvesting and availability of forest resources in the RFE to meet growing demands in the future, efforts to increase volumes of wood products of higher value added via the export-import policy, and a reaction of the wood products market to these changes. The conclusion is that the steps undertaken by the Russian Government in order to increase revenue from forest sector are beginning to bring their first results.
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