Russia’s Forestry Industry Expected to Face Steep Production Decline in 2026

Russia’s forestry industry is heading into a severe downturn as sanctions intensify, borrowing costs remain high, and the ruble stays strong, Deputy Industry and Trade Minister Mikhail Yurin told lawmakers on Thursday, The Moscow Times reported (11-27-25).

Speaking before a Federation Council committee, Yurin said the sector has entered a “downward trend,” with a worst-case scenario pointing to a 20–30% drop in production in 2026. Output could continue falling into 2027 if geopolitical pressures deepen, Interfax reported.

The Economic Development Ministry has flagged wood-processing as one of Russia’s weakest industrial segments. Production fell 4.3% in Q3, with losses accelerating to 7.8% in October.

Yurin cited the Central Bank’s high key rate, tightening sanctions, a strong ruble, and reduced access to remaining export markets as major headwinds. He added that Russian timber export values have fallen by more than 20% since before the war, dropping from $12.5 billion in 2021 to $9.8 billion.

Logging volumes are expected to reach a four-year low of 182 million m³ in 2025.

Companies are already showing signs of distress. In September, the Federal Tax Service initiated bankruptcy proceedings against Tobol, the largest timber firm in the Tyumen region. The same month, the Svyezha-Tyumen birch plywood plant—part of the Sveza group—halted production and laid off 323 employees after steep declines in output and capacity use pushed the operation into heavy losses.