The Facts

We understand that the introduction of new import duties on Russian birch plywood will raise questions. As the timing of the action comes at a time of price rises of virtually all construction materials it is important to keep a clear head. What the EU is doing is preserving European Union interests by protecting an European Industry that, in the long term, would go out of business unless something is done.

The Woodstock Consortium will help you to clear up any misunderstandings and see you through the maze of information, and misinformation, that abound as Russian interests seek to defend their long term attempt to capture EU markets:

The duties will lead to higher prices for European importers, distributors and end-users, as they have no choice but to continue importing from Russia.”

This is not true.

As noted by the European Commission in its Decision, the underlying risks for downstream users and their costs are limited due to the relatively modest level of new duties. Russian commentators publicly agree with this and it is reported that the duties are in a manageable range. The anti-dumping duties are expected to be partly absorbed upstream by Russian exporters and only partly passed downstream to EU users.

As for the lack of alternatives, restoring a level playing field will in fact allow EU producers to increase their capacity and better supply EU markets. In addition to EU supply and to continuing Russian imports, birch plywood can still be imported from other third countries, such as Ukraine and Belarus. Finally, it is exactly the potential  lack of alternative supply that the measures will in the long term redress.

“The duties will significantly reduce exports of Russian birch plywood to the European market.”

No one believes that Russian exporting producers will cease supplying European customers – their best market –  due to this manageable duty. For Russia the proximity and attractiveness of the European market, when compared to other third countries, is a given.

Most tellingly, Russian producers have in recent times continued to announce their intention further to expand production capacity and increase output, both during and after the investigation period. Such additional volumes produced in Russia will inevitably in large part end up in the EU. As the Commission puts it in the Provisional Regulation: “the level of the measures will likely not bring Russian imports to a halt, but rather allow the continued sourcing of birch plywood from Russia at fair prices”.

“Since the imposition of the new duties, prices for birch plywood have gone up”

This is true, but misleading, as they have not gone up due to the duties.

Current and, most likely, temporary price rises are caused by the surge in demand for almost all building materials globally. This includes demand for wood panels, resulting from increased sales in the construction and home improvement sector and the recent pandemic related disruption of supply chains – one need only point to the temporary disruption in the supply of containers.

Logistics prices have increased significantly due to the pandemic.

Source: ECB Economic Bulletin, Issue 3/2021
The lumber price explosion is already abating, with other construction materials soon to follow.

Source: Trading Economics Lumber Data (https://tradingeconomics.com/commodity/lumber)

Today’s developments are a global phenomenon, common to the rise in cost of all construction raw materials and transportation, and by no means unique to the birch plywood industry.

This trend is expected to be temporary, with commodity prices stabilising by the end of the year or soon after. The drop in global lumber prices, for example, signals the beginning of a broader downturn for building commodities. In the meantime, unfair Russian practices will continue to threaten European industry unless they are properly addressed.