Russia’s forestry sector is bracing for a sharp downturn as sanctions tighten, interest rates remain elevated, and the ruble stays strong, Deputy Industry and Trade Minister Mikhail Yurin warned yesterday. Speaking before a Federation Council committee, Yurin said the industry has entered a “downward trend,” with the worst‑case scenario pointing to a 20 to 30 per cent drop in output in 2026 before adding that production, already falling this year, could continue to decline into 2027 if geopolitical conditions deteriorate further, according to comments reported in the Moscow Times.
It comes as the Economic Development Ministry has identified wood processing as one of the weakest sectors in Russia’s industrial landscape. Output fell 4.3 per cent in the third quarter, and the slump accelerated to 7.8 per cent in October. Yurin cited the Central Bank’s high key rate, harsher sanctions, a persistently strong ruble and shrinking access to export markets due to secondary and tertiary restrictions as the main pressures weighing on the sector.
Russian timber exports have dropped by more than 20 per cent since the war with Ukraine, dropping from $12.5 billion in 2021 to just $9.8 billion last year, whilst logging volumes are expected to hit a four‑year low of 182 million cubic meters.
Thousands of Russian Truckers Face Wipe Out — and It Could Hit Global Timber
The new warning comes after Wood Central revealed that the Russian trucking industry is facing its deepest crisis in decades, with 7,000 or more carriers in liquidation or bankruptcy, and thousands more expected to follow…with the collapse in transport, which threatens millions of cubic metres of lumber traded through Eurasia every year, comes as a 50% hike in transport costs has already led to the closure of dozens of Siberian sawmills.
Earlier this month, Wood Central reported that surging transport costs were inflicting damage on the timber export sector and making deliveries of lumber to “friendly countries” increasingly difficult. According to a Russian-based publication, Lesprom, Russian lumber prices have already increased between 11 and 14 per cent this year, with “transport costs to China (up 16%), Uzbekistan (up 18%), and Japan (7%)” squeezing margins.
- For more information about the impact of the Ukraine war on the global timber supply chain, click here for Wood Central’s report.
