Sanctions on Russia, including the ban on using the SWIFT money transfer system, will severely limit its ability to participate in international trade, but the impacts to its softwood log and lumber trade are likely to be less affected than other industries.
Over half of Russia’s softwood lumber trade and three-quarters of its softwood log trade is with China (graphs below). China has not imposed sanctions on Russia and has payment systems independent from the SWIFT system. Only ocean shipments from St. Petersburg, which account for around 25% of China’s total volume from Russia, are traded with letters of credit based in US dollars. Some contracts have already been changed to Chinese RMB payments, however trade from Northwest Russia is likely to suffer some in the coming months.