OREANDA-NEWS. December 29, 2008. The Russian Ministry of Industry and Trade proposes to abandon all export tariffs on round timber. At least, for a few carefully chosen exporters.

After months of fierce debate with Finnish authorities, Russia might eventually choose to abandon export tariffs on round timber. The current tariffs are 15 EUR per cubic meters. However from 1 January 2009, the tariffs are planned increased to 50 EUR per cubic meter.

The planned tariff increase has spurred sharp reactions from Finland where the powerful pulp and paper industry has made itself highly dependent on raw materials from the nearby Russia.

The proposal from the Russian ministry is likely to make Finnish importers satisfied. However, if the ministry proposals are approved by government, it will only be a few chosen exports which are allowed to engage in the lucrative business.

Only 5-6 companies will get the zero-tariff export approval . Those will be the companies which initiate the biggest investment projects in the Russian forest industry.

The tariff increase was originally to help protect the Russian timber processing industry. The new proposals from the Ministry of Industry and Trade must be seen in the light of the rapidly unfolding financial crisis, which have seriously hit the Russian forestry sector. The planned tariff boost threatened with making the situation in the industry even worse.