Russian log export tax deferred

Russia has announced this week that the planned 80% tax on log exports that had been scheduled to start on January 1, 2009 has been postponed. Prime Minister Vladimir Putin said on Thursday that the global financial crisis, as well as pressure from Scandinavian powers who depend on cheap Russian logs, had convinced the country to delay the tax by nine to 12 months.

Nordic paper makers and the European Union trade chief praised the move, which came ahead of an EU-Russia summit that was to run today, Innovatek reports. The wood duties have been one of the points which have kept Russia-EU trade talks in a stalemate. The European Commission had also previously said the timber duties could hamper Russia’s negotiations to join the World Trade Organization. EU leaders have lauded Russia’s decision to postpone the increase in tariffs.

Other wood producers around the world will find the decision a bitter blow with many expecting the new levy to stem the flow of the huge volume of Russian logs flowing into China - more than 60% of that country’s log imports - and create increased demand for wood and wood products. Following the announcement, some are also worried about  Putin’s lack of a clearly-defined deadline.