End of tax deduction for first thinning livens up timber sales in Finland
The Finnish forest industry managed to purchase a total of 5.3 million m3 of wood from privately owned domestic forests in August.
The industry’s wood supply situation remains dire even though the August purchase amount increased almost threefold from July. The aggregate purchase volume for January-August, 17.4 million m3, is still substantially less than normal. If the forest industry’s raw material needs are to be satisfied with domestic wood, annual procurements from private forests must at least triple.
The industry is still in need of large amounts of pulpwood in particular. The forest industry’s January-August pine pulpwood purchases were 24% and birch pulpwood purchases 39% higher than normal. Spruce pulpwood purchases stood at around 75% of the normal five-year average.
Birch log purchases came to around 90% of the normal level, but purchases of pine and spruce logs were down by almost 50%. Weak demand for sawn timber on the global markets and the high price of wood continue to slow down log sales.
The tax-free status granted to income from first-thinning operations finished at the end of August and this livened up timber sales, especially during the last week of August.
Price of wood remains high
Stumpage prices remained largely unchanged from July. The average stumpage price of pine and spruce logs was €58 per cubic metre and the average price of birch logs was €49/m3.
Average pine and birch pulpwood stumpage prices were €16-17/m3 and the stumpage price of spruce pulpwood was €22/m3.
Prices remain considerably higher than in 2006, the last normal year for timber sales. Softwood logs are 17-21%, birch logs 14%, pine and birch pulpwood 25-27% and spruce pulpwood 3% dearer than in August 2006.
One third of roundwood sales are purchases for delivery
The market situation for delivery sales, i.e. timber harvested by forest owners themselves, remains good. Over one third of all procurements were purchases for delivery in January-August, when they accounted for only 14% of all sales in the corresponding period of 2007.