Russia's government is considering a package of support measures for the forestry sector after a sharp deterioration in profitability left nearly half of the country's logging and wood-processing companies operating at a loss in 2025.<\/p>\n
According to data from the Ministry of Industry and Trade cited by Arkhangelsk regional lawmaker Alexander Dyatlov, around 45% of logging companies and 48% of wood-processing businesses were unprofitable last year. The figures have prompted Moscow to review emergency support measures as rising forest lease costs add to growing market pressures.<\/p>\n
Deputy Prime Minister Dmitry Patrushev has instructed relevant ministries to examine a possible bankruptcy moratorium for forestry companies and proposals to ease the burden of higher forest-plot rents. The measures were discussed during a government meeting on 27 May.<\/p>\n
One option under consideration is a freeze on further rent increases until 2028. Officials are also evaluating whether companies could spread additional lease payments over a three-year period. Industry representatives, however, argue that such a solution would provide only limited relief given the scale of the sector's financial difficulties.<\/p>\n
The industry's problems extend beyond higher lease costs. According to the latest Russian Lumber Industry Insights report, lumber production continues to increase despite weakening sales and declining exports, resulting in growing inventories across the sector. Companies have largely maintained production volumes, but domestic demand has failed to keep pace.<\/p>\n
Russia's economic outlook has weakened considerably in recent months. The government reduced its GDP growth forecast to 0.4% for 2026 and 1.4% for 2027, while the economy contracted by 0.3% in the first quarter. Construction activity has also slowed. The volume of completed construction in April fell 21% from March and was down 4% compared with the same month last year, while housing completions during the first four months of 2026 declined by 24% year-on-year.<\/p>\n
At the same time, Russia's export markets have become more difficult. China's prolonged construction downturn has reduced demand for imported lumber and intensified competition among suppliers. Chinese imports of softwood lumber fell 33% year-on-year in April to 967,000 m\u00b3. Russian shipments to China declined by 34% during the month, while Canadian exports increased by 4%, highlighting the growing competitive pressure facing Russian suppliers.<\/p>\n
Rising logistics costs are adding further strain. Higher transport expenses have reduced export margins and made it more difficult for Russian producers to compete in overseas markets. The combination of weaker domestic demand, falling exports and rising costs has left many companies struggling to maintain profitability.<\/p>\n
The pressure is not evenly distributed across the sector. Ministry data show that 48% of wood-processing companies operated at a loss in 2025, compared with 26% of furniture and panel manufacturers and 19% of pulp and paper producers.<\/p>\n
Nikolai Ivanov, vice-president of Segezha Group, told Kommersant that the industry's proposals received broad support during the government discussions. According to Ivanov, ministries were instructed to assess the possibility of cancelling additional lease charges, freezing higher environmental fees and introducing a bankruptcy moratorium for forestry companies.<\/p>\n
The industry's difficulties are linked in part to changes introduced on 1 January 2024, when reduction coefficients used in calculating forest lease payments were abolished. Companies subsequently faced higher rental charges and additional payments covering both 2024 and 2025.<\/p>\n
Whether substantial support will ultimately be approved remains uncertain. Industry sources quoted by Kommersant said budget constraints could limit the scope of any aid package despite mounting losses across the sector.<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":98937,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-98936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n