On 2nd A public timber auction was held by the Estonian State Forest in February RMK (Riigimetsa Majandamise Keskus). One of the main customers was a subsidiary of the southern Swedish forest owners’ association Södra, Sodra Metsad OÜwhich set a price record for birch wood at 895 SEK* (Swedish crowns) per m3Solid wood under bark free Estonian port. If we subtract 100 SEK we get very close to a comparable roadside price in Sweden which is 375 SEK. In addition, 895 SEK is more than the average Södra price for spruce saw logs in Sweden.
This is a summary of an article below Skogsforum.se signed Torbjorn Johnsen.
The Swedish Forest Owners Association pays more for pulpwood in Estonia than in Sweden
A street price that in Sweden according to the Södra price list for birch fiberboard is SEK 345 per m3 Solid wood under bark or 375 SEK for certified forest owners. That’s still less than half of what Södra is willing to pay on the other side of the Baltic Sea.
We questioned the pricing policy of the Swedish forest industry here at Forestry.com In front. This raises even more questions.
Skogsforum.se has been in contact with foresters in Estonia who confirm that the market for birch pulpwood has exploded in the country. They partly blame (or honor, if you’re a lumber merchant) Södra for this development. On 2nd In February, Södra bought more than 15,000 m3 Birch wood and about 8 300 m3 Softwood for pulp.
The price paid for softwood was lower, about 650 SEK per m3 Solid wood under bark free Estonian port. Deducting freight costs to the port, this price is also well above what Södra offers its members in Sweden. According to our sources, the situation is similar in the other two Baltic countries, Latvia and Lithuania.
Why Sodra?
If a public company were to employ this strategy, importing marginal quantities at high prices to drive down domestic commodity prices, no one would be surprised. But in this case we are talking about a forest owner Association originally founded to help its members get more profitability out of their forests.
Why do they do that? Is it difficult to get birch pulpwood in Sweden? Well, try increasing the price to the above levels and see what happens. Or are they just afraid to show the true value of hardwood for fear that forest owners will abandon spruce (which is the most important wood species in Sweden today)?
Why not from other parts of Sweden?
Another question that arises is why these marginal volumes are bought from other countries when they could be bought (cheaper?) from other parts of Sweden (Södra is only active in the southern parts of Sweden). The right price would bring large quantities of birch pulpwood out of the forest. Are they afraid of clashes with the forest industry outside their own sphere? Is it better to fill the Estonian treasury by buying expensive pulp wood from the RMK? A good deed perhaps, but hardly the purpose of a Swedish forest owners’ association.
Timber auctions – something for Sweden?
The Estonian State Forest holds several timber auctions every year. Some upcoming fellings are sold at an open auction. The rest are sold with long-term contracts, but the auctions are important because they set prices for the long-term contracts. A clever way for the state to keep prices high. Maybe the Swedish state forest Sweaskog should you look at that?
Market prices everywhere – but not in Sweden
We recently wrote about it Sweden has the lowest wood prices. Forest owners also often say that wood prices should be determined by the market. One cannot help but wonder how market-based Swedish prices are when one sees how they are e.g. B. be governed by buying expensive pulpwood on the other side of the Baltic Sea to keep domestic prices low.
A boatload of cheap pulpwood?
Photo: Unsplash.com
*Facts/Sources
Data from the RMK timber auctions are displayed openly. The last auction took place in Tallinn on April 2ndndFebruary 2022. Here Södra bought 15,963 m3 Birch wood and 8 354 m3 Softwood for pulp. Freeport paid Södra €74 per m3Solid wood on bark for the birch pulpwood. To make it comparable with Swedish prices, we converted it to SEK per m3Solid wood under bark by dividing by 0.86 and using the exchange rate €1 = SEK 10.40 (3rdapprox February 2022), which brings us 895 SEK per m3Solid wood under bark.
The corresponding price for softwood was €54/m3Solid wood on bark, which gives us SEK 653 per m using the same calculation3Solid wood under bark.
Please note that the prices are free port, which means that the freight costs to the Estonian port must be deducted. Our estimate is that the freight costs are around 100 SEK per m3Solid wood under bark.
