According to the Associated Press, Russian Prime Minister Vladimir Putin has agreed to postpone implementation of the Russian export duty of 80% on roundwood logs. The announcement, which was made during a meeting with Finnish Prime Minister Matti Vanhanen, indicated that the rise in duty would be postponed for a nine to 12 month period. The heightened duty was expected to jump from 25% to 80% at the start of January 2009, but will remain set at 25% until further information is released. Japan Lumber Reports has noted that even though the duty will be maintained at 25%, it is still high enough to induce a shift in the Japanese plywood and lumber industry to new sources of raw materials or shut down since costs are still too high and prices are not expected to drop in the near future.
In the UK, the weakness of sterling combined with particularly gloomy economic data has meant that forward buying has been particularly weak. One UK based agent involved in the trade for 40 years comments ‘I have seen four recessions during this period, in the early 70s, 80s, 90s and now this one. But I’ve never known a change as rapid as this... Now the UK hardwood trade, at least with respect to forward sales, has essentially shut down for Christmas, the earliest shutdown I have ever known’. UK Importers are still carrying heavy stocks in standard commercial items. One large importer is reported to be off-loading sapele and white oak – the two most popular hardwood species in the UK — at well below replacement cost in order to generate cash flow. Other importers have generally not joined in the fire sale, but under such circumstances, there is very little interest in forward buying.