{"id":86988,"date":"2023-11-10T08:40:26","date_gmt":"2023-11-10T08:40:26","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/latvias-sawmill-industry-in-crisis-competitiveness-undermined-by-high-sawlog-prices\/"},"modified":"2025-09-18T17:27:05","modified_gmt":"2025-09-18T17:27:05","slug":"latvias-sawmill-industry-in-crisis-competitiveness-undermined-by-high-sawlog-prices","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/latvias-sawmill-industry-in-crisis-competitiveness-undermined-by-high-sawlog-prices\/","title":{"rendered":"Latvia\u2019s sawmill industry in crisis: competitiveness undermined by high sawlog prices"},"content":{"rendered":"

Latvian manufacturers of softwood lumber encountered a significant drop in product demand and, consequently, in prices in the European and Asian markets, while the sawlogs needed for their production are forced to be purchased from the State Forest Manager of Latvia at high prices, as a result of which competitiveness has been lost and alarm bells are being rung, hoping for the involvement of ministers and the government to normalize the situation.<\/span><\/p>\n

The situation is made even more difficult by the fact that in other competitor countries of Latvian softwood lumber producers, the same raw material - softwood sawlogs - can be purchased at significantly lower prices (even by 40%) than when they are supplied by JSC Latvijas Valsts me\u017ei (LVM) in accordance with the concluded contracts. As a result, Latvian companies try to mix the super-expensive sawlogs from the forests of the Latvian State Forest Managers with the cheaper ones purchased from private forest owners, or to import them from Scandinavia. At the same time, discussions about this problem are held not only in the business organizations of the Latvian sector, but now also at another level, as last week the German-Baltic Chamber of Commerce also discussed this issue.<\/p>\n

Roundwood sales prices are killing Latvian sawmills<\/strong><\/p>\n

The crisis in construction, smaller order volumes and, in particular, a significant drop in prices for sawn products, according to the timber industry, should also be reflected in the changes in the contract prices for the supply of softwood sawlogs previously concluded with the Latvian LVM. \"It is paradoxical that the Latvian state-owned and actually the most important supplier of wood resources in Latvia exists at such roundwood sales prices that are actually killing the sawmills,\" Sampsa Auvinen, chairman of the Council of the European Wood Industry Confederation expressed his surprise atthe meeting. He does not understand why the price monitoring system does not work or why it does not reflect the situation that is happening in the market.<\/p>\n

\"Currently, the sale prices of softwood sawlogs of the Latvian state-owned forest manager are the highest in the world, and they are killing sawmills, rather than promoting the development of this traditional industry for Latvia,\" concludes S. Auvinen. He feels surprised by this situation, because for more than 20 years LVM has demonstrated an understanding of what the market situation is for its wood buyers, and acted accordingly and was a partner (maintained all concluded agreements, delivered a product of appropriate quality, ensured timely deliveries and .etc.) in the best sense of the word for those who buy wood products from this company. \"Perhaps the reason is that the company's management has completely changed, perhaps the cause of the problem is to be found in the (Agriculture) Ministry that oversees it,\" said Sampsa Auvinen . According to him, if there is a political desire to preserve the wood industry in Latvia, then a solution will have to be found at this level as well, which would allow the producers of softwood sawn products working here to regain their competitiveness. \"This situation directly affects Latvia's economy, as Latvia's reputation as a reliable supplier of sawn products is being questioned. Lumber buyers know about the prices of LVM logs and start buying these products from other countries, which they now consider more reliable,\" said S. Auvinens.<\/p>\n

Latvian suppliers are replaced by Scandinavian ones <\/strong><\/p>\n

\"At the moment, it is economically more profitable - it is cheaper to buy lumber in Scandinavia, rather than to produce them ourselves,\" Andris Veide, the chairman of the board of sawn timber trade SIA Lameko Impex, harshly describes the situation. He states that the timber for the production of finished products is purchased from a Swedish manufacturer. \"Isn't it absurd that Latvia, where wood processing is one of the most important sectors of the national economy and which over the years has become one of the world's leading suppliers of sawn softwood products, is no longer able to produce this product from its own raw materials at economically adequate prices,\" Veide said. He points out that this paradoxical situation is currently being successfully used by Scandinavian producers, who also enter Latvia and take away the market from domestic producers.<\/p>\n

Revenue does not cover costs<\/strong><\/p>\n

Voldem\u0101rs Cir\u0161s, the chairman of the board of SIA Smiltene Impex, a softwood sawn production company points out that for Latvian woodworking companies, who have long-term contracts with the state forest manager for the supply of softwood sawlogs, the situation is becoming more and more critical every day, because the sale prices of some timber assortments in the markets have already fallen to the purchase price of roundwood. \"The prices of lumber have been falling for 16 months in a row, because there is a deep stagnation in the construction and timber markets in the world, but the sales prices of sawlogs for LVM's long-term contract partners were finally reduced to the purchase prices at the end of 2021 only in the 4th quarter of this year,\" he said. He reminds that for the first time the slowdown in demand and prices of sawn products was observed at the end of the summer of 2021, while the trend that started in the middle of the summer of 2022 has still not changed its direction. \"It is important that the current stagnation of the softwood lumber market is observed all over the world, while in 2007-2008 in 2010, it was only in Europe, and therefore there were opportunities to sell our products at affordable prices beyond the European borders, but currently there is no such opportunity,\" explains V. Cir\u0161s.<\/p>\n

He points out that it is for this reason that a solution must be found and action must be taken immediately, as the situation for woodworkers has already become critical during these 16 months. \"Already since mid-summer 2022, when softwood lumber prices began to decline on the market, we talked, wrote, discussed and we continue to do so in various formats and levels (individually, through the association), but until now no real action to solve the problem, not from LVM, nor from its shareholder, the Ministry of Agriculture, so we also asked for support from the Baltic-German Chamber of Commerce, of which our company is a member, and the chamber management responded immediately,\" says V. Cir\u0161s. He admits that the current situation is a dead end for producers, which has resulted in entrepreneurs losing competitiveness in external markets and even losing market share or these markets altogether, with significantly lower production volumes, frequent forced downtimes, all of which cause continuous losses for companies, and also with the release of workers, which increases people's uncertainty in the future and also affects the well-being of people living in specific settlements.<\/p>\n

Multiple solutions<\/strong><\/p>\n

V. Cir\u0161s emphasizes that there can be several solutions to get out of the specific situation - dead end: \"The simplest - the indexation of sawlog prices in existing contracts in accordance with the real situation of the lumber market and the continuation of the contracts, the termination of the concluded contracts on the basis of mutual agreement and without sanctions against the initiator of this initiative , and a repeated auction of the released volumes, but as a compromise \u2013 the extension of the deadline for the last year of the concluded contracts for another two years with the allocation of additional logging volumes in state forests to compensate for the reduction of the annual volume, maybe another solution.\"<\/p>","protected":false},"excerpt":{"rendered":"

Latvian manufacturers of softwood lumber encountered a significant drop in product demand and, consequently, in prices in the European and Asian markets, while the sawlogs needed for their production are forced to be purchased from the State Forest Manager of … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":49943,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[4716],"tags":[],"class_list":["post-86988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-trends"],"acf":[],"yoast_head":"\nLatvia\u2019s sawmill industry in crisis: competitiveness undermined by high sawlog prices - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/latvias-sawmill-industry-in-crisis-competitiveness-undermined-by-high-sawlog-prices\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Latvia\u2019s sawmill industry in crisis: competitiveness undermined by high sawlog prices - 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