New Zealand’s Timber Export Trade Potentially Disrupted by Russia’s Invasion of Ukraine

Russia’s invasion of Ukraine, and the European Union’s subsequent sanctions, have the potential of disrupting New Zealand’s timber export trade. Amid sanctions, Russia is looking to expand its export of timber to non-sanctioning countries. Two of those non-sanctioning countries, China and Vietnam, are currently significant volume purchasers of New Zealand timber. In 2018, 48% of New Zealand’s forestry exports went to China.

Niagara Sawmilling Group Sales Manager Jamie Barton (Kennington, New Zealand) says that he is keeping a close eye on the trade-relationship between Russia and key export markets in Vietnam and China on the back of European Union trade sanctions against Russia.

Barton notes that Russia was a large exporter of timber products to Europe, and he is mindful that Russia may need to increase supply into markets that Niagara typically exported to such as Vietnam and China in response to sanctions. “Vietnam has strong relationships with Russia and has not placed any sanctions against them,” Barton said.

Margules Groome, an independent forestry consultant, confirmed Barton’s fears in its report on the invasion in March, stating there could be a pivot of Russian exports of logs and timbers from Europe to China. New Zealand and Europe are the two largest suppliers of softwood logs to China, it said, while Russia is the largest supplier of timber.

“The Russia-Ukraine war may contribute to a reversal of some trends in the Chinese log supply, potentially bringing Russia back to the log export market, reorient sawn timber exports from Russia and further boost ocean freight costs,” it said.