The death of the Russian Timber Industry
The industry has warned of escalating shutdowns and bankruptcies.
The Russian timber sector, once a major global supplier, has seen a sharp decline and near collapse in recent years. This dramatic downturn has been driven by a mix of international sanctions, lost markets, poor infrastructure, and domestic mismanagement.
15 July, 2025 - Russian Timber Industry Workers Warned Authorities About a Mass Shutdown of Production and bankruptcies.
“Enterprises of the timber industry complex in Russia may begin to shut down en masse due to the cessation of exports to Europe and the strengthening of the ruble. This was reported by the Russian Association of Organisations and Enterprises of the Pulp and Paper Industry in a letter to the Ministry of Industry and Trade with a request for intervention.
Currently, the industry, as noted in the document, is going through one of the most stressful periods in modern history - enterprises are becoming unprofitable and losing competitiveness. If negative trends continue in the second half of the year, there is a high probability of surviving timber operation shutdowns.
#Russia is one of the world’s largest #timber exporters, harbouring more than a fifth of the world’s forested areas. In 2021, the country was the European Union’s fifth largest trading partner, exporting more than $3 billion worth of timber to the bloc that year, according to the European Commission.
When Russia invaded Ukraine in February 2022, sanctions swiftly followed, including a total ban on Russian timber imports into the EU from July 2022. While direct trade between Russia and the EU was stymied, new global pathways emerged to traffic illicit wood into the bloc. ICIJ’s Deforestation Inc. partners have identified new routes through #China, #Turkey and other countries, adding to the traders using #Kyrgyzstan and Kazakhstan that were previously reported.
Beefy reported in 2023 on the EU sanctions circumvention (see the link below). Banned Russian timber was still being imported into the EU despite sanctions to curb timber revenue that helps finance Russia’s war in Ukraine.
Paper Trail Media, Der Spiegel, ZDF and others analysed trade data to trace the pathway of banned wood through third countries, including China, Turkey, Kazakhstan and Kyrgyzstan. It appears these routes are now drying up and interest in russian timber has reduced to a trickle.
Western Sanctions and Export Bans
EU and G7 bans on Russian wood imports: After Russia’s invasion of Ukraine in 2022, the EU imposed sanctions that banned most wood imports from Russia, historically one of its biggest markets.
Loss of FSC certification: The Forest Stewardship Council (FSC) suspended operations in Russia, making Russian timber less attractive to global buyers seeking sustainable and certified wood products.
Trade restrictions on technology: Sanctions on logging and processing equipment have severely disrupted production and modernisation efforts in the sector.
Loss of European and North American Markets
Over dependence on Europe: The EU accounted for a significant share of Russian timber exports. The near-total collapse of these trade routes left Russian producers with massive oversupply and no alternative outlets.
Limited access to high-paying customers: Western markets paid premiums for processed wood and sustainable timber—those clients are now gone.
Over-reliance on China, and Even That Is Shrinking
China as a fallback buyer: Russia has tried to shift its timber trade to China, but:
China demands lower prices.
Chinese companies increasingly source from Southeast Asia and Africa instead.
China’s own slowdown in construction has reduced demand.
Loss of bargaining power: Russian firms now depend heavily on fewer, tougher buyers, undermining profitability and strategic leverage
Logistical and Infrastructure Bottlenecks
Poor rail and port capacity: The Trans-Siberian Railway and Far Eastern ports are already overburdened with redirected arms, oil, coal, and grain shipments.
Remote forests, poor roads: Much of Russia’s timber is in remote areas with inadequate infrastructure, raising costs and limiting export potential.
Collapse of Value-Added Processing
Russia’s economy was switched to a war economy by Putin, factories and raw materials are now exclusively procured by the State, or nationalised to refocus all production on war materials and manufacturing
Low processing levels: Russia primarily exported raw logs rather than finished products. With sanctions in place, these lower-value exports are no longer viable.
Outdated technology: Without Western machinery and investment, Russia struggles to scale up modern sawmills or plywood and chipboard production.
Domestic Mismanagement and Corruption
Illegal logging and regulatory failure: Widespread illegal logging and weak enforcement damage long-term sustainability and global reputation. Russia is the epicentre of corruption, and the timber industry is another natural casualty of this decline to rampant corruption.
Kremlin policy failures: Attempts to ban raw log exports (to encourage domestic processing) backfired by causing stockpiles and idled mills instead of boosting local industry.
Workforce and Economic Decline
Job losses in timber towns: Many logging towns in Siberia and the Russian Far East depended heavily on timber. The collapse has left them economically devastated.
Brain drain and capital flight: Skilled labor and investment have fled the country, worsening capacity and innovation.
Environmental and Global Reputation Damage
Deforestation without accountability: Russia has been accused of over-harvesting without reforestation, especially in the boreal forests, eroding its environmental standing.
Loss of international credibility: With no FSC or PEFC certifications, buyers seeking green credentials avoid Russian timber.
In conclusion
Russia’s timber sector is collapsing due to a combination of geopolitical isolation, infrastructure decay, market loss, and policy misfires. Once a top-three global exporter of timber, Russia now faces a situation where unsold logs rot in muddy yards, processing plants shut down, and rural communities are left stranded. The hope of redirecting everything to Asia has proven overly optimistic, leaving the industry in long-term decline.
It’s the death of the timber industry in Russia being played out. Only an end to the illegal invasion of Ukraine might save it now - but it will take decades to get back to where it was in 2021.
References and Sources:
https://x.com/beefeater_fella/status/1689997423706349569?s=61
https://www.globalwoodmarketsinfo.com/russian-forestry-industry-sees-financial-growth-in-2024/
https://re-russia.net/en/analytics/0244/
https://t.me/c/1816090333/5758
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